Webis Holdings plc
Global Gaming Group
Annual Report and Consolidated Financial Statements for the year ended 31 May 2023
AIM Stock Code: WEB
Webis Holdings plc
Contents
Our Performance
2
3
6
Group at a Glance
Chairperson’s Statement
Group Gaming Licences
Our Governance
7
8
10
14
15
16
The Board of Directors
Directors’ Report
Corporate Governance Statement
Audit, Risk and Compliance Committee Report
Statement of Directors’ Responsibilities
Report of the Remuneration Committee
Our Financials
18
24
25
26
27
28
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Statements of Financial Position
Statements of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Shareholder Information
54
57
Notice of Meeting and Proxy Form
Company Information
1
Webis Holdings plc
Group at a Glance
Webis Holdings plc (the “Company”) and its subsidiary
companies (together the “Group”) operates two primary
segments: -
WatchandWager.com Ltd and WatchandWager.com LLC
– Advanced Deposit Wagering (“ADW”)
WatchandWager.com LLC
– Cal Expo Harness Racetrack
WatchandWager.com Ltd is regulated in the Isle of Man
and operates a totalisator wagering hub through its United
States Tote supplier, which enables it to conduct its ADW
business by passing wagers directly into global racetrack
betting pools in real time.
WatchandWager.com LLC has its operational base in
Lexington, Kentucky, with its head office in Larkspur,
California, and provides pari-mutuel wagering, or pool-
betting, services through a number of distribution channels to
a global client base. The company holds United States pari-
mutuel licences for its ADW business in the USA, including a
multi-jurisdictional licence issued by the States of North
Dakota, and individual licences for the States of California,
Maryland, Colorado, Minnesota, New York, Washington and
Kentucky. The business provides wagering opportunities
predominantly on horse and greyhound racing and has
contracted with a significant number of prestigious racetrack
partners within the United States, Hong Kong, France,
Canada, United Kingdom, Ireland, and Australia amongst
others. It provides wagering facilities to customers through its
interactive website, watchandwager.com, as well as offering
a business-to-business wagering product.
WatchandWager.com LLC also operates Cal Expo Harness
Racetrack in Sacramento, California, under a licence issued
by the California Horse Racing Board. This ‘bricks and
mortar’ presence in the largest State economy in the USA
continues to provide leverage for our related global pari-
mutuel operations.
As part of the requirements for the Isle of Man licence, client
funds for the Isle of Man licensed companies are held in fully
protected segregated client accounts within an Isle of Man
regulated bank.
2
Webis Holdings plc
Chairperson’s Statement
Introduction
in
the 2022/23
interim report,
As previously reported
released on 24 February 2023, it has been a difficult year of
trading for our principal subsidiary, WatchandWager.com
LLC in the USA. Despite that, we remain confident of the
way the business is taking shape, and our strategy for the
future. I comment more on the financial results and our plans
and aims for the business below.
Funding Update
As per the RNS dated 15th September 2023, a convertible
loan note, providing new funding of GBP 750,000, was
agreed, and signed with Galloway Limited (a related party),
with the option for this to be converted into shares in the
Company. The Board consider this to be beneficial to the
Company.
Strategy
the
investment
from our main
The strategy behind
shareholder is to support our B2C sector, which as reported
below has been performing well. We can see growth
opportunities in this sector. Increased investment and an
upturn
in performance can only benefit our market
capitalisation for the benefit of all shareholders.
The plan for the investment is to focus spend on software
improvements and marketing of our core website
www.watchandwager.com and the mobile product. At time of
writing, we plan to roll out the software work in the first two
months of the calendar year. We then aim to roll out our B2C
marketing campaign starting in March 2024. The marketing
will be primarily focused on social media activity and will
focus on key US states and wagering products that derive
the highest margin for us. We will be setting key performance
indicators for the implementation team and will ensure the
programs are very agile. We will keep shareholders informed
as to progress.
Following the planned enhancements to our on-line offering,
we believe that the opportunity to collaborate with those
established sportsbook operators who lack a content rich
and stable ADW platform will increase, and this will be one
area which we will actively pursue during 2024.
Year End Results Review
The Group amounts wagered for the year ended 31 May
2023 were US$ 113.4 million (2022: US$ 120.1 million).
Gross Profit reported was US $ 4.6 million (2022: US$ 5.1
million).
Operating costs were slightly reduced from last year at US$
5.5 million (2022: US$ 5.6 million), primarily from a reduced
number of race days at Cal Expo racetrack, due to severe
weather conditions at the racetrack and its surrounding
areas.
This resulted in a loss on the year of US$ 0.745 million, a
downturn on the 2022 loss of US$ 0.374 million.
Shareholder equity stands at US$ 0.6 million (2022: US$ 1.3
million). Total cash stands at US$ 3.3 million (2022: US$ 4.1
million), which includes ring-fenced funds held as protection
against our player liability as required under USA and Isle of
Man gambling legislation.
Approach to Risk and Corporate Governance
As part of the adoption of the Quoted Companies Alliance
Corporate Governance code in 2018, the Board completed
an assessment of the risks inherent in the business and
defined and adopted a statement of risk appetite, being the
amount and type of risk, it is prepared to seek, accept, or
tolerate in pursuit of value. This being: -
“The Group’s general risk appetite is a moderate, balanced
one that allows it to maintain appropriate growth, profitability
and scalability, whilst ensuring full regulatory compliance.”
The Group’s primary risk drivers include: -
Strategic
Reputational
Credit
Operational
Market
Liquidity, Capital, and Funding
Regulatory and Compliance
Conduct
Our risk appetite is classified under an “impact” matrix
defined as Zero, Low, Medium, and High. Appropriate steps
are implemented to ensure the prudential control monitoring
of risks to the Group and the Audit, Risk and Compliance
Committee oversees this essential requirement. Further
details of the Corporate Governance Statement will be found
on pages 10 to 13 of this report and should be read in
conjunction with my report.
The Board refined
incorporates the risk and compliance framework.
the Group’s business plan which
Performance by Sector
WatchandWager
Business-to-Consumer
www.watchandwager.com/mobile
We have been pleased with the performance in this sector
which is wagering through our main website and mobile
product over the financial year. The product has held up well
against extreme competition from all the big players in the
market. We are very confident of the scalability of our
software, as per our strategy.
We have effectively “pivoted” the business in the past two
years, for this sector to contribute 70% of our revenues, with
B2B only 30% (excluding our retail operations at Cal Expo).
We consider this to be a healthier business mix, when
previously we were vulnerable to the volatile B2B market.
3
Webis Holdings plc
Chairperson’s Statement continued
Business-to-Consumer
As stated, whilst some of the software improvements have
already commenced, we are in advanced planning for the
main activity programme to start early in the New Year. It is
very important that we achieve our targets in this sector, to
not only achieve profitability, but also make the Company
more attractive in merger or acquisition opportunities.
Business-to-Business
As previously stated in February, we see this sector as a
very mature market, where the bigger are getting bigger and
margins are tightening. Simply put, the profits from the costs
of sales against the margin derived are decreasing. That
said, we will continue to service our key clients to the best of
our ability, and we have seen steady levels of performance
from those clients. We will continue to service this sector and
maximise revenue as best as possible but only with a strict
attention to regulatory compliance.
Cal Expo
It has been a difficult season at our racetrack at Cal Expo
Sacramento, primarily due
to unprecedented weather
conditions. This resulted in us losing seven race meetings
due to Health and Safety concerns. This had a negative
impact on financial performance as our operating costs
increased as we tried to maintain track conditions whilst at
the same time, we were not receiving any direct wagering
income. That said, we managed the situation well with no
Health and Safety issues. We remain confident for the new
season, which started 17 November and will run until 3 May
2024, with 47 live race meets planned.
Key risk factors
During the period we have updated our Risk Assessment
procedures and will continue to do so. The Board conducts
regular risk assessments on a micro and macro level.
Licenses
During the period reported, all our licenses have been
renewed successfully in the Isle of Man and the USA. We
consider our licensed presence in all jurisdictions to be a key
asset to the Company and we fully expect all our license
renewals subsequent to the period to be approved before the
calendar year end 2023.
Content
WatchandWager continues to offer the widest range of
content to its global customers of any licensed advance
deposit wagering Company in the world. As well as our
licenses, we consider this offering to be a key unique selling
proposition for the Company. All of our content agreements
both domestic USA and international are up to date into
2024, and, in a number of cases, beyond.
Compliance
There were no compliance issues across the entire operation
during the period reported.
Health & Safety
There were no Health and Safety issues across the entire
operation during the period reported.
Outlook
We are more satisfied by the performance of our main
subsidiary in the new financial year. Our performance has
been stronger on key USA and global
international
racetracks. Our handle has also been strong on the UK
content, and particularly the World Pool initiative hosted by
the Hong Kong Jockey Club and the UK Tote. We look to
increase that level of activity in the next year.
Board Appointments
Following the extremely sad news of the death of Sir James
Mellon in July of this year, we are actively seeking to recruit
additional Directors to the Board. Sir James brought a
rigorous commitment to all aspect of the business and his
absence is sorely missed.
Other Developments
As reported, we are still working on the Arizona Downs
project, namely, to run a racing operation at the track with a
similar model to Cal Expo. This has been difficult due to the
lack of progress with the Landlord and the Regulatory
Commission, largely out of our control. If these issues are
not resolved by the end of the calendar year 2023, we will
most probably abandon the project. This will have very little
impact on our operating costs.
USA Expanded Gaming
Shareholders will have noted the failure of two draft
Californian sports betting bills in November 2022. As
previously stated, these were extremely poorly constructed
draft legislation, in fact the failure of both bills to pass is of
benefit to the Company. We continue to possess key
licensed assets in California, both land-based at Cal Expo
and with our ADW license.
Acquisitions and Mergers
The announcement of the financial support of our principal
shareholder is important to the Company. This combined
with our license assets, makes us a very attractive partner in
all potential partnerships, mergers, and acquisitions within
the USA. We will keep shareholders fully informed of any
meaningful developments in this area as soon as possible.
4
Webis Holdings plc
Chairperson’s Statement continued
Summary
Finally, I would like to thank all our shareholders and
customers for their continued loyalty. In addition, I would like
to thank all our staff and team for their work and commitment
over the year.
Denham Eke
Non-executive Chairperson
29 November 2023
5
Webis Holdings plc
Group Gaming Licences
Webis Holdings plc
Isle of Man Gambling Supervision Commission
WatchandWager.com Ltd
Isle of Man Gambling Supervision Commission
WatchandWager.com LLC - Advanced Deposit Wagering
Multi-jurisdictional
California Horse Racing Board
North Dakota Racing Commission
State by State
California Horse Racing Board
Colorado Division of Racing Events
Kentucky Horse Racing Commission
The Maryland Jockey Club
Minnesota Racing Commission
New York State Gaming Commission
North Dakota Racing Commission
Washington Horse Racing Commission
WatchandWager.com LLC - Cal Expo Harness Racing
California Horse Racing Board
6
Webis Holdings plc
The Board of Directors
Denham Eke, aged 72
Non-executive Chairperson
career
Denham Eke began his
in
stockbroking before moving into corporate
planning for a major UK insurance broker.
He is a Director of many years’ standing of
both public and private companies involved
in the mining, leisure, manufacturing, and
financial services sectors.
Denham Eke was appointed Non-executive
Chairperson in April 2003.
Ed Comins, aged 54
Managing Director
the
Tote
Ed Comins has 30+ years’ experience in the
betting and gaming industry with Coral,
Ladbroke Casinos,
and
GameAccount. At the Tote he had overall
responsibility for developing Totepool’s pari-
mutuel business as General Manager of
Tote Direct and Development Director for
Totepool. He was Commercial Director for
GameAccount, a provider of online skill
games, where he managed betting partner
relationships with key sportsbooks.
Ed Comins joined the Board in May 2010.
Richard Roberts, aged 59
Non-executive Director
Richard Roberts has served in executive and
board positions over the past 25 years in the
online gaming and betting industries, leading
US digital operations in iGaming, ADW and
fantasy sports markets.
In his current
the President of Digital
position, he
Gaming
and
Entertainment.
for Mohegan Gaming
is
Richard Roberts joined the Board in April
2021.
Katie Errock, aged 36
Non-executive Director
in
experience
Ms Errock, currently Company Secretary for
the Group and its subsidiary companies, has
extensive
compliance,
regulation, and corporate governance. She is
an associate of the Chartered Institute for
Securities and Investment and is President
of the Isle of Man chapter. Ms Errock is also
the Company Secretary for a number of
other companies controlled by Burnbrae
Group Limited, an entity wholly owned by
Webis’ principal shareholder, Jim Mellon.
Katie Errock joined the Board in August
2022.
7
Webis Holdings plc
Directors’ Report
The Directors present their annual report and the audited
consolidated financial statements for the year ended 31 May
2023.
Principal activities
The Group operates:
•
•
a pari-mutuel service to individual and business
customers; and
a racetrack under a licence issued in California,
USA.
Business review
The Group operates on a worldwide basis and provides
online and offline facilities in respect of a wide variety of pari-
mutuel events.
A more detailed review of the business, its results and future
developments is in the Chairperson’s Statement on pages 3
to 5.
Proposed dividend
The Directors do not propose the payment of a dividend
(2022: US$ Nil).
Policy and practice on payment of creditors
It is the policy of the Group to agree appropriate terms and
conditions for its transactions with suppliers by means of
standard written terms to individually negotiated contracts.
The Group seeks to ensure that payments are always made
in accordance with these terms and conditions.
Directors’ interests
At the year-end there were 18 days (2022: 23 days) of
purchases in trade creditors.
Financial risks
Details relating to financial risk management are shown in
note 21 to the financial statements.
Directors and Directors’ interests
The Directors who held office during the year and to date
were as follows:
Denham Eke
Non-executive Chairperson
Ed Comins
Managing Director
Sir James Mellon
Non-executive Director (until 5 July
2023)
Richard Roberts
Non-executive Director
Katie Errock
Non-executive Director
The Directors who held office at the end of the year had the
following interests in the ordinary shares of the Company
and options to purchase such shares arising from incentive
schemes:
Ordinary shares
Options
Interest
at end of
year
2023
Interest at
start of
year
2022
Interest
at end of
year
2023
Interest at
start of
year
2022
Denham Eke 1
Ed Comins
Sir James Mellon
Richard Roberts
Katie Errock
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
14,000,000
14,000,000
1 Denham Eke is Managing Director of Burnbrae Limited which holds 248,204,442 ordinary shares representing 63.10% of the
issued capital of the Company.
Further details of the options issued to the executive Directors are contained in the Report of the Remuneration Committee on
pages 16 and 17.
—
—
—
8
Webis Holdings plc
Directors’ Report continued
Substantial interests
On 15 September 2023, the following interests in 3% or more of the Company’s ordinary share capital had been reported:
Burnbrae Limited
Annual General Meeting
Shareholders will be asked to approve at the Annual General
Meeting certain resolutions as special business. Some of
these resolutions have become routine business at the
Annual General Meetings of most public companies,
including your Company, and relate to the renewal of the
authority for the Directors to allot relevant securities and the
renewal of the powers for the Directors to allot equity
securities for cash.
Employees
The Group is committed to a policy of equal opportunity in
matters
training, and career
development of employees, and is opposed to any form of
less favourable treatment afforded on the grounds of
disability, sex, race, or religion.
to employment,
relating
Number of
ordinary
shares
%
63.10
248,204,442
Political and charitable contributions
The Group made no political contributions during the year.
As part of the obligations of the pari-mutuel business in the
United States, the Group made charitable contributions of
US$ 29,985 during the year (2022: US$ 37,892).
Auditors
KPMG Audit LLC, being eligible, have expressed their
willingness to continue in office in accordance with Section
12(2) of the Isle of Man Companies Act 1982.
On behalf of the Board
recognises
The Group
importance of ensuring
the
employees are kept informed of the Group’s performance,
activities, and future plans.
Denham Eke
Non-executive Chairperson
29 November 2023
9
Webis Holdings plc
Corporate Governance Statement
Corporate Governance Report
The Board of Webis Holdings plc (the “Board”) is committed
to best practice in corporate governance throughout Webis
Holdings plc and all subsidiary companies (together the
“Group”). The Directors have agreed to comply with the
provisions of
the Quoted Companies Alliance (“QCA”)
Corporate Governance Code for Small and Mid-Size Quoted
Companies (2018) to the extent which is appropriate to its
nature and scale of operations. This report illustrates how the
Group complies with those principles.
QCA Principle 1: Establish a strategy and business
model which promotes long-term value for shareholders
The strategy and business operations of the Group are set
out in the Chairperson’s Statement on pages 3 to 5.
The Group’s strategy and business model and amendments
thereto, are developed by the Managing Director and his
senior management team and approved by the Board. The
management
is
responsible for implementing the strategy and managing the
business at an operational level.
the Managing Director,
led by
team,
The Group’s overall strategic objective is to develop a
profitable, sustainable advance deposit wagering (“ADW”)
platform that benefits from a wide and diverse client base,
both business and retail. The Group operates through two
principal operating subsidiaries: WatchandWager.com Ltd
and WatchandWager.com LLC.
WatchandWager.com Ltd is regulated in the Isle of Man and
operates a totalisator wagering hub through its United States
Tote supplier, which enables it to conduct its ADW business
by passing wagers directly into global racetrack betting pools
in real time.
its operational base
WatchandWager.com LLC has
in
Lexington, Kentucky, with its head office in Larkspur,
California, and provides pari-mutuel, or pool-betting,
wagering services through a number of distribution channels
to a global client base. The Company holds United States
pari-mutuel licences for its ADW business in the US, issued
by North Dakota, California, Kentucky, Minnesota, New York,
Washington, Maryland and Colorado. The business provides
wagering opportunities predominantly on horse and
greyhound racing and has contracted with a significant
number of prestigious racetrack partners within the United
States, Hong Kong, France, Canada, United Kingdom,
Ireland, and Australia amongst others. It provides wagering
facilities
website,
watchandwager.com, as well as offering a business-to-
business wagering product.
customers
through
its
to
WatchandWager.com LLC also operates Cal Expo Harness
Racetrack in Sacramento, California, under a licence issued
by the California Horse Racing Board. This ‘bricks and
mortar’ presence in the largest State economy in the US
continues to provide leverage for our related global pari-
mutuel operations.
The Group also plans to develop a licensed US-based
sportsbook offering following the US Supreme Court ruling
which paved the way to legalizing wagering on sports in the
United States, subject to individual State legislation. This will
probably be developed in partnership with one or more major
operators and suppliers in the sector. The Group considers
this market to be a significant growth area for our US
operations. Significantly, there are a number of California
draft Sports Betting Bills being currently debated, which
specify that only existing land-based operators in the State
will be eligible for license applications, in our case through
the Cal Expo, Sacramento, CA racetrack facility. In the
United States, WatchandWager.com LLC holds ADW
licenses not only for California, but also for North Dakota
(providing regulated access to a total of 24 states), together
with the previously mentioned individual State licenses.
The Group operates in an inherently high risk and heavily
regulated sector, and this is reflected in the principal risks
and uncertainties.
In executing the Group’s strategy and operational plans,
management will typically confront a range of day-to-day
challenges associated with these key risks and uncertainties
and will seek to deploy the identified mitigation steps to
manage these risks as they manifest themselves.
QCA Principle 2: Seek
shareholder needs and expectations
to understand and meet
The Group via the Managing Director seeks to maintain a
regular dialogue with both existing and potential new
shareholders in order to communicate the Group’s strategy
and progress and to understand the needs and expectations
of shareholders.
Beyond the Annual General Meeting, the Managing Director
and, where appropriate, other members of the senior
management team or Board will meet with investors and
analysts to provide them with updates on the Group’s
business and to obtain feedback regarding the market’s
expectations of the Group.
The Group’s investor relations activities encompass dialogue
with both institutional and private investors. From time to
time, the Company attends private investor events, providing
an opportunity
to meet with
representatives from the Group in a more informal setting.
investors
those
for
QCA Principle 3: Take into account wider stakeholder
and social responsibilities and their implications for
long-term success
The Group is aware of its corporate social responsibilities
and the need to maintain effective working relationships
across a range of stakeholder groups. These include the
Group’s employees, clients, partners, suppliers, regulatory
authorities, and horseracing colleagues involved in the
Group’s track facility at Cal Expo. The Group’s operations
and working methodologies take account of the need to
balance the needs of all of these stakeholder groups while
maintaining focus on the Board’s primary responsibility to
promote the success of the Group for the benefit of its
members as a whole. The Group endeavours to take
account of feedback received from stakeholders, making
amendments to working arrangements and operational plans
where appropriate and where such amendments are
consistent with the Group’s longer-term strategy.
The Group takes due account of any impact that its activities
may have on the environment and seeks to minimise this
impact wherever possible. Through the various procedures
and systems, it operates, the Group ensures full compliance
with Health and Safety and environmental legislation relevant
to its activities.
10
Webis Holdings plc
Corporate Governance Statement continued
QCA Principle 4: Embed effective risk management,
considering both opportunities and threats, throughout
the organisation
is
for
responsible
the systems of
The Board
risk
management and internal control and for reviewing their
effectiveness. The internal controls are designed to manage
rather than eliminate risk and provide reasonable but not
absolute assurance against material misstatement or loss.
Through
the Group Audit, Risk and
Compliance Committee, the effectiveness of these internal
controls is reviewed annually.
the activities of
A comprehensive budgeting process is completed once a
year and is reviewed and approved by the Board. The
Group’s results, compared with the budget, are reported to
the Board on a monthly basis.
The Group maintains appropriate insurance cover in respect
of actions taken against the Directors because of their roles,
as well as against material loss or claims against the Group.
The insured values and type of cover are comprehensively
reviewed on a periodic basis.
The senior management team meets at least monthly to
consider new risks and opportunities presented to the Group,
making recommendations to the Board and/or Group Audit,
Risk and Compliance Committee as appropriate.
QCA Principle 5: Maintain
functioning, balanced team led by the chair
the board as a well-
The Group’s Board currently comprises three Non-executive
Directors and one Executive Director.
All of the Directors are subject to election by shareholders at
the first Annual General Meeting after their appointment to
the Board and will continue to seek re-election at least once
every three years.
The Board is responsible to the shareholders for the proper
management of the Group and meets at least four times a
year to set the overall direction and strategy of the Group, to
review operational and financial performance and to advise
on management appointments. All key operational decisions
are subject to Board approval.
Non-executive Director, Richard Roberts, is considered to be
independent. The other Non-executive Directors are not
considered to be independent given their connection to the
Company’s controlling shareholder. The QCA Code suggests
that a board should have at least two independent Non-
executive Directors. The Board considers that the current
composition and structure of the Board of Directors have
been appropriate to maintain effective oversight of the
Group’s activities to date. However, the Board is aware that
further oversight
independent Non-executive
Directors could be beneficial to the governance environment.
This process is under review and is pending the further
development of business opportunities in the US in order to
be able to determine the exact need and requirements.
through
Non-executive Directors receive their fees in the form of a
basic cash emolument. The Executive Director receives a
basic cash salary and also holds options over the Group’s
shares. The number and terms are set out on pages 16 and
17.
the
The option grant concerned is not deemed to be significant
individual Executive Director. The current
for
remuneration structure for the Board’s Executive and Non-
executive Directors is deemed to be proportionate.
QCA Principle 6: Ensure that between them the Directors
have the necessary up-to-date experience, skills and
capabilities
The Board considers that all of the Executive and Non-
executive Directors are of sufficient competence and calibre
to add strength and objectivity to its activities and bring
considerable experience in the operational and financial
development of gambling and horseracing companies.
The Directors’ biographies are set out on page 7.
The Board regularly reviews the composition of the Board to
ensure that it has the necessary breadth and depth of skills
to support the ongoing development of the Group. Whilst
there is no Finance Director on the Board, the overview of
the finance function is the responsibility of a non-Board
Financial Controller.
in conjunction with
The Chairperson,
the Company
Secretary, ensures that the Directors’ knowledge is kept up
to date on key issues and developments pertaining to the
Group, its operational environment and to the Directors’
responsibilities as members of the Board. During the course
of the year, Directors received updates from the Company
Secretary and various external advisers on a number of
corporate governance matters.
Directors’ service contracts or appointment letters make
provision
in
furtherance of his or her duties and responsibilities, normally
via the Company Secretary.
to seek personal advice
for a Director
QCA Principle 7: Evaluate board performance based on
clear and relevant objectives, seeking continuous
improvement
Internal evaluation of the Board, the Committees and
individual Directors is undertaken on an annual basis in the
form of peer appraisal and discussions to determine their
effectiveness and performance as well as the Directors'
continued independence.
The results and recommendations that come out of the
appraisals for the Directors shall identify the key corporate
and financial targets that are relevant to each Director and
their personal targets in terms of career development and
training. Progress against previous targets is also assessed
where relevant.
The Board may utilise the results of the evaluation process
when considering the adequacy of the composition of the
Board and for succession planning.
11
Webis Holdings plc
Corporate Governance Statement continued
QCA Principle 8: Promote a corporate culture that is
based on ethical values and behaviours
The Board seeks to maintain the highest standards of
integrity and probity in the conduct of the Group’s operations.
These values are enshrined in the written policies and
working practices adopted by all employees in the Group. An
open culture is encouraged within the Group, with regular
communications
to staff regarding progress and staff
feedback regularly sought. The Executive Management
regularly monitors the Group’s cultural environment and
seeks to address any concerns that may arise, escalating
these to Board level as necessary.
The Group is committed to providing a safe environment for
its staff and all other parties for which the Group has a legal
or moral responsibility in this area. The Group’s Health and
Safety policies and procedures are enshrined in the Group’s
documented quality systems, which encompass all aspects
of the Group’s day-to-day operations.
QCA Principle 9: Maintain governance structures and
processes that are fit for purpose and support good
decision- making by the board
framework which enables risk
The Role of the Board
The Board is collectively responsible for the long-term
success of the organisation. Its principal function is to
determine the strategy and policies of the Group within an
effective control
to be
assessed and managed.
The Board ensures that the necessary financial and human
resources are in place for the Group to meet its objectives
and that business and management performances are
reviewed. Furthermore, the Board ensures that the Group
operates within its constitution, relevant legislation and
regulation and that proper accounting records and effective
systems of business control are established, maintained,
documented, and audited.
There are at least four formal Board meetings each year. All
Board members have the benefit, at the Group’s expense, of
liability insurance in respect of their responsibilities as
Directors and have access to independent legal or other
professional advice if required. The Board has a formal
schedule of matters which are reserved for its consideration
and it has established three committees to consider specific
issues in greater detail, being the Group Audit, Risk and
Compliance, Remuneration and Nomination Committees.
The Terms of Reference for each of these Committees are
published on the Group’s website.
The Chairperson
The Chairperson is responsible for leading the Board,
ensuring its effectiveness in all aspects of its role, promoting
a culture of openness of debate, and communicating with the
Group’s members on behalf of the Board. The Chairperson
sets the direction of the Board and promotes a culture of
openness and debate by facilitating the effective contribution
of Non-executive Directors and ensuring constructive
relations between Executive and Non-executive Directors.
that Directors receive
The Chairperson also ensures
accurate, timely and clear information. In doing so, this
fosters a positive corporate governance culture throughout
the Group.
The Managing Director
The Managing Director is responsible for managing the
Group’s business and operations within the parameters set
by the Board.
the business. Their key
Non-executive Directors
The Non-executive Directors are responsible for bringing
independent judgement to the discussions held by the
Board, using their breadth of experience, and understanding
of
to
constructively challenge and contribute
to strategic
proposals, and to monitor performance, resources, and
standards of conduct, compliance, and control, whilst
providing support to executive management in developing
the Group.
responsibilities are
The Board has established a Group Audit, Risk and
Compliance Committee
“Committee”), a
Remuneration Committee and a Nominations Committee
with formally delegated duties and responsibilities. Richard
Roberts chairs both the ARCC and the Remuneration
Committee.
(“ARCC” or
in
information disclosed
Group Audit, Risk and Compliance Committee
The ARCC meets at least two times each year and
comprises two Non-executive Directors, currently Richard
Roberts (Chairperson) and Denham Eke. The external
auditors attend by invitation. Its role is to be responsible for
reviewing the integrity of the financial statements and the
balance of
the accompanying
Directors’ Report, to review the effectiveness of internal
controls and risk management systems and recommend to
the Board (for approval by the members) the appointment or
re-appointment of the external auditor. The ARCC reviews
and monitors the external auditor’s objectivity, competence,
effectiveness, and independence, ensuring that if it or its
associates are invited to undertake non-audit work it will not
compromise auditor objectivity and independence.
Further information can be found within the Group Audit,
Risk and Compliance Report contained within this Annual
Report.
Remuneration Committee
The Remuneration Committee meets at least twice a year
and comprises two Non-executive Directors. It is chaired by
Richard Roberts and is responsible for determining the
the Company
remuneration of
the management.
Secretary, and other members of
Committee members do not
in discussions
concerning their own remuneration.
the Executive Director,
take part
Further information can be found within the Remuneration
Report contained within this Annual Report.
Nomination Committee
The Nomination Committee is comprised of the whole Board.
It is chaired by the Chairperson of the Board and is
responsible for making recommendations to the Board on
matters relating to the composition of the Board, including
Executive and Non-executive Director succession planning,
the appointment of new Directors and the election and re-
election of Directors. The Nomination Committee only meets
as matters arise.
12
Webis Holdings plc
QCA Principle 10: Communicate how the Company is
governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders
The Group places a high priority on regular communications
with its various stakeholder groups and aims to ensure that
all communications concerning the Group’s activities are
clear, fair, and accurate. The Group’s website is regularly
updated, and users can register
to be alerted when
announcements or details of presentations and events are
posted onto the website.
Notices of General Meetings of the Company can be found
here: http://www.webisholdingsplc.com/latest-news/.
The results of voting on all resolutions in general meetings
are posted to the Group’s website, including any actions to
be taken as a result of resolutions for which votes against
have been received from at least 20 per cent of independent
shareholders.
Approval
This report was approved by the Board of Directors on 29
November 2023 and signed on its behalf by:
Denham Eke
Non-executive Chairperson
29 November 2023
Corporate Governance Statement continued
the assessment of
Appointments to the Board
The principal purpose of the Nomination Committee is to
the balance of skills,
undertake
experience, independence, and knowledge on the Board
against the requirements of the business, with a view to
determining whether any shortages exist. Having completed
the assessment, the Committee makes recommendations to
the Board accordingly. Appointments to the Board are made
on merit, with due regard to the benefits of diversity. Within
this context, the paramount objective is the selection of the
best candidate, irrespective of background, and it is the view
of the Board that establishing quotas or targets for the
diversity of the Board is not appropriate.
All Director appointments must be approved by
the
Company’s Nominated Adviser, as required under the AIM
Rules, before they are appointed to the Board.
Prior to appointment, Non-executive Directors are required to
demonstrate that they are able to allocate sufficient time to
undertake their duties.
Re-election
The Group’s Rules require that all Directors are submitted for
election at the AGM following their first appointment to the
Board. Thereafter all Directors will submit themselves for re-
election at least once every three years, irrespective of
performance.
Board and committee attendance
The number of formal scheduled Board and committee
meetings held and attended by Directors during the year was
as follows: -
Board Audit Remuneration Nomination
Denham
Eke
Sir
James
Mellon
Ed
Comins
Richard
Roberts
Katie
Errock
7/8
1/2
7/8
2/2
8/8
1/2
8/8
0/2
6/6
1/2
2/2
2/2
-
-
-
1/1
1/1
1/1
1/1
-
13
Webis Holdings plc
Audit, Risk and Compliance Committee Report
The Directors have agreed to comply with the provisions of
the Quoted Companies Alliance Corporate Governance
Code for Small and Mid-Size Quoted Companies (2018) to
the extent which is appropriate to its nature and scale of
operations.
This report illustrates how the Group complies with those
principles in relation to its Group Audit, Risk and Compliance
Committee.
Membership
The Committee comprises of two Non-executive Directors
and the members are Richard Roberts (Chairperson) and
Denham Eke. The composition of the Committee has been
reviewed during the year and the Board is satisfied that the
Committee members have
financial
experience and the expertise to resource and fulfil its
responsibilities effectively, including those relating to risk and
controls.
relevant
recent
Meetings
The Committee meets two times a year, including the review
of the interim and full year results. Other Directors and
representatives
the external auditors attend by
invitation.
from
Duties
The Committee carries out the duties below for the Company
and the Group as a whole, as appropriate:
▪ Monitors the integrity of the financial statements of the
Company, including annual and half-yearly reports,
interim management statements, and any other formal
financial performance,
announcement
to
reviewing significant
issues and
judgements which they contain.
financial reporting
relating
▪ Reviews and challenges
the consistency of
the
information presented within the financial statements,
compliance with stock exchange or other
legal
requirements, accounting policies and the methods used
to account for significant or unusual transactions.
▪ Keeps under review the effectiveness of the Group’s
internal controls and risk management systems.
▪ Reviews the Group’s arrangements for its employees to
raise, in confidence, possible wrongdoing in financial
reporting or other matters, the procedures for detecting
fraud, prevention of bribery and adequacy and
effectiveness of the Group’s anti-money laundering
systems and control.
▪ KPMG Audit LLC was appointed as auditor in 2002 and
the Committee oversees the relationship with them
including regular meetings to discuss their remit and
review the findings and any issues with the annual audit.
It also reviews their terms of appointment, meets them
once a year independent of management and considers
and makes recommendations to the Board, to be put to
the Company for approval at the Annual General
Meeting, in relation to the appointment, re-appointment
and removal of the Company’s external auditor. There
are no contractual restrictions in place in respect of the
auditor choice.
The Committee is governed by a Terms of Reference
and
on
www.webisholdingsplc.com - the Company’s website.
available
copy
this
of
is
a
▪
2023 Annual Report
During the year the Committee held two meetings and can
confirm that it has received sufficient, reliable, and timely
information from management and the external auditors to
enable it to fulfil its responsibilities.
The Committee has satisfied
there are no
relationships between the auditor and the Group which could
adversely affect the auditor’s independence and objectivity
and regular meetings have been held with them at both the
planning stage prior to the audit and after the audit at the
reporting stage.
itself
that
All internal control and risk issues that have been brought to
the attention of the Committee by the external auditors have
been considered and the committee confirms that it is
satisfied that management has addressed the issues or has
plans to do so.
The Group has a number of policies and procedures in place
as part of its internal controls and these are subject to
continuous review and as a minimum are reviewed by the
Committee on an annual basis.
the external auditor
The Committee has reviewed and discussed together with
management and
the Company’s
financial statements for the year ended 31 May 2023 and
reports from the external auditor on the planning for and
outcome of their reviews and audit. The key accounting
issues and judgements considered relating to the Group’s
financial statements and disclosures were as follows:
▪ Revenue recognition – the Committee considered the
conditions of revenue recognition, including that of being
recognised on an accrual basis. The Committee agreed
that the current method of revenue recognition is
appropriate for the market that the Group operates
within, and that revenue satisfied the necessary criteria
to be recognised. Disclosures are included in note 1;
▪ Going concern – the Committee reviewed the going
concern position of the Group, taking into account the
12-month cash flow forecasts and the continued support
of the principal shareholder. The Committee is satisfied
that preparing the financial statements on a going
concern basis is appropriate. Disclosures are included in
note 1;
▪ Cash balances – the Committee reviewed the cash
position to ensure that it is able to meet its ongoing
requirements and also has sufficient cash reserves to
cover the relevant player liabilities. The Committee is
satisfied that there are sufficient cash balances to meet
its ongoing expenses and cover the player balances in
full if required. Disclosures are included in note 12.
Richard Roberts
Independent Non-executive Director
29 November 2023
14
Webis Holdings plc
Statement of Directors’ Responsibilities in Respect of the Annual Report and the Financial
Statements
The Directors are responsible for preparing the Annual
Report and the Group and Parent Company financial
statements
law and
in accordance with applicable
regulations.
Company law requires the Directors to prepare Group and
Parent Company financial statements for each financial year.
Under the AIM Rules of the London Stock Exchange, they
are required to prepare the Group financial statements in
accordance with UK Adopted – International Accounting
Standards post Brexit and applicable law and they have
elected to prepare the Parent Company financial statements
on the same basis.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and
Parent Company and of their profit or loss for that period. In
preparing each of the Group and Parent Company financial
statements, the Directors are required to:
•
select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable,
relevant, and reliable;
•
•
•
state whether they have been prepared in accordance
with UK Adopted – International Accounting Standards;
assess the Group and Parent Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern; and
use the going concern basis of accounting unless they
either intend to liquidate the Group or the Parent
Company or to cease operations or have no realistic
alternative but to do so.
responsible
The Directors are
for keeping adequate
accounting records that are sufficient to show and explain
the Parent Company’s
transactions and disclose with
reasonable accuracy at any time the financial position of the
Parent Company and enable them to ensure that its financial
statements comply with the Companies Acts 1931-2004.
They are responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and detect
fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Directors’ Report that complies
with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the Isle of Man
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Signed on behalf of the Board.
Denham Eke
Non-executive Chairperson
29 November 2023
15
Webis Holdings plc
Report of the Remuneration Committee
Directors’ Remuneration Report
Isle of Man registered company
is no
As an
requirement to produce a Directors’ Remuneration Report.
However, the Board follows best practice and therefore has
prepared such a report.
there
The Directors have agreed to comply with the provisions of
the Quoted Companies Alliance Corporate Governance
Code for Small and Mid-Size Quoted Companies (2018) to
the extent which is appropriate to its nature and scale of
operations.
This report illustrates how the Group complies with those
principles in relation to Directors’ remuneration.
The Level and Components of Executive Director
Remuneration
The Group’s Remuneration Policy reflects the Group’s
business strategy and objectives as well as sustained and
long-term value creation for shareholders. In addition, the
policy aims to be fair and provide equality of opportunity,
ensuring that: -
▪
▪
▪
▪
the Group is able to attract, develop and retain high-
performing and motivated employees in the competitive
local and wider US markets;
employees are offered a competitive remuneration
package to encourage enhanced performance and are,
in a fair and responsible manner, rewarded for their
individual contribution to the success of the Group;
it reflects our culture and values; and
there is full transparency of the Group’s Remuneration
Policy.
In line with the Board’s approach, which reflects that adopted
the Group’s
within other comparable organisations,
Remuneration Policy provides
the
Executive Director through salary and other benefits.
the reward of
for
Executive Director’s Emoluments
The remuneration for the Executive Director reflects their
to
responsibilities.
participate in an annual bonus scheme when
is
considered appropriate, private healthcare and share option
incentives.
It comprises basic salary, eligibility
this
Annual bonus scheme payments are not pensionable and
are not contracted.
As with staff generally, whose salaries are subject to annual
reviews, the basic salary payable to the Executive Director is
reviewed each year with reference to jobs carrying similar
in comparable e-gaming organisations,
responsibilities
Emoluments — salaries, bonuses, and taxable benefits
— fees
market conditions generally and
competition in view of the Group’s geographical position.
local employment
It is anticipated that an annual bonus scheme will operate
when Group profitability and cash flow allow. Bonuses for the
Executive Director are calculated with reference to the profit
before tax as disclosed in the audited accounts of the Group,
together with an assessment by the Committee of the
Director’s performance against agreed personal targets.
Bonus payments are not pensionable.
The Committee believes that share ownership by executives
strengthens the link between their personal interests and
those of shareholders. Options are granted to executives
periodically at the discretion of the Remuneration Committee.
The grant of share options
fixed
performance criteria. This is deemed to be appropriate as it
allows the Committee to consider the performance of the
Group and the contribution of the individual executives and,
as with annual bonus payments, illustrates the relative
importance placed on performance-related remuneration.
is not subject
to
The Group does not intend to contribute to the personal
pension plans of Directors in the forthcoming year.
Executive Directors’ Contractual Terms
The service contract of the Executive Director provides for a
notice period of six months.
Non-executive Directors’ Remuneration
Non-executive Directors do not receive any benefits other
than their fees and travelling expenses for which they are
reimbursed. The level of fees payable to Non-executive
Directors is assessed using benchmarks from a group of
comparable e-gaming organisations.
The Procedure for Determining Remuneration
is
responsible
two Non-
The Remuneration Committee, comprising
executive Directors,
the
remuneration of the Executive Director and is chaired by
Richard Roberts. Committee members do not take part in
discussions concerning their own remuneration. The basic
Non-executive Director fee is set by the Group Chairperson.
The Chairperson of the Committee reports at the Board
meeting following a Committee meeting.
for setting
It is the view of the Committee that Directors’ remuneration
awarded across the Group for the year has been in
accordance with the Group’s stated Remuneration Policy
and, on behalf of the Committee I recommend that you
this Group report. An analysis of Directors’
endorse
emoluments is as follows:
2023
US$000
2022
US$000
368
105
473
345
96
441
16
Webis Holdings plc
Report of the Remuneration Committee continued
Directors’ Emoluments
Basic
salary
US$000
Fees
US$000
Bonus
US$000
Termination
payments
US$000
Benefits
US$000
2023
Total
US$000
2022
Total
US$000
Executive
Ed Comins
Non-executive
Denham Eke*
Sir James Mellon
Richard Roberts
Katie Errock*
341
—
—
—
—
—
24
18
48
15
Aggregate emoluments
341
105
* Paid to Burnbrae Limited.
Details of the options outstanding at 31 May 2023 are as follows:
—
—
—
—
—
—
—
—
—
—
—
—
27
—
—
—
—
27
368
345
24
18
48
15
27
21
48
—
473
441
Name of Director
31 May
2022
Granted /
(lapsed) in
year
31 May
2023
Exercise
price
Date
from which
exercisable
Expiry
date
Ed Comins - 2016 Share Option Plan
14,000,000
— 14,000,000
1p 3 March 2019 3 March 2026
14,000,000
— 14,000,000
The market price of the shares at 31 May 2023 was 1.40 pence. The range during the year was 3.20 pence to 1.20 pence.
Approval
The report was approved by the Board of Directors and signed on behalf of the Board.
Richard Roberts
Independent Non-executive Director
29 November 2023
17
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc
1. Our opinion is unmodified
We have audited the financial statements of Webis Holdings plc (the “Company”) and its subsidiaries (together, the "Group"), which
comprise the consolidated and Company statement of financial position as at 30 May 2023, the consolidated statements of
comprehensive income, changes in equity and cash flows and Company statement of changes in equity for the year then ended,
and notes, comprising significant accounting policies and other explanatory information.
In our opinion,
•
•
•
•
The financial statements give a true and fair view of the state of the Group's and of the Company's affairs as at 31 May
2023 and of the Group's loss for the year then ended;
The Group financial statements have been properly prepared in accordance with UK-Adopted International Accounting
Standards;
The Parent Company statement of financial position and statement of changes in equity and related notes (“Parent
Company financial statements”) have been properly prepared in accordance with UK-adopted International Accounting
Standards; and
The Group and Parent Company financial statements have been prepared in accordance with the requirements of the
Companies Acts 1931 to 2004.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company and
Group in accordance with, UK ethical requirements including the FRC Ethical Standard as required by the Crown Dependencies'
Audit Rules and Guidance. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our
opinion.
2. Key audit matters: our assessment of the risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In arriving at our audit opinion
above, the other key audit matters, unchanged from 2022, were as follows:
The risk
Our response
(Group key
Revenue recognition - occurrence
Our audit procedures included:
Revenue
audit matter)
recognition
of
Consolidated
Comprehensive Income: Revenue US$
50,020,000 (2022: US$ 53,612,000)
Statement
Refer to the Audit, Risk and Compliance
Committee Report on page 14, note 1.2
(Accounting Policy for Revenue) and
note
Segments)
(Operating
disclosures.
2
The Group enters into high volumes of
revenue-generating transactions each day
which are processed on complex
IT
systems. There is a risk that a system
may not be configured correctly from the
outset such that winning and losing bets
or commissions are calculated incorrectly,
that the systems do not interface correctly
from the customer facing systems through
to the financial information systems and
that unauthorised changes may be made
to any of these systems, which may result
in the misstatement of revenue.
There is also the risk that revenue is
materially misstated in order to boost the
Group’s earnings position and
future
outlook may be induced by a number of
factors. This may include the Company’s
Outsourcing controls:
• We evaluated the control environment
of
the service organisations by
obtaining and inspecting the latest
System and Organisation Controls
(SOC) reports upon whose system
infrastructure and applications are
relied on by the Group.
• We tested the operating effectiveness
of controls by obtaining and inspecting
SOC
service
from
reports
organisations.
the
• We also
tested
the operating
effectiveness of controls which are
performed at the user entity level.
18
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc continued
2. Key audit matters: our assessment of the risks of material misstatement continued
The risk
Our response
AIM listed status – hence an effort to
maintain a high share price and the need
to meet both internal goals and external
market expectations.
the
Considering
factors above we
identified the occurrence of revenue as a
significant risk due to fraud and error.
• We
the
assessed
objectivity,
competence and the nature of work
performed by the Independent Service
Auditor who provides
the SOC
reports.
Tests of details:
• We agreed
total
revenues and
payouts recorded by the Group to the
reports extracted from the third-party
service organisation’s system, which
we obtained directly from the third-
party service organisation.
• We tested 100 per cent of the other
directly related expenses by tracing
amounts
supplier
invoices.
recorded
to
• We recalculated net gaming revenue
subtracting total payouts and other
directly
from
revenue.
expenses
related
year met
• We have performed cut-off test to
ensure that revenue recorded during
the
for
recognition during the year and that
revenue earned post year end has not
been recorded incorrectly in the year
under audit.
criteria
the
• We inspected post year end journals
for reversals of revenue.
• We
compared
company
exchange rates used in translating
revenue to market rates.
foreign
Assessing adequacy of disclosures
• We assessed the adequacy of the
Group’s disclosures
in respect of
revenue recognition in the financial
statements for compliance with UK-
International Accounting
Adopted
Standards.
19
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc continued
2. Key audit matters: our assessment of the risks of material misstatement continued
The risk
Our response
Going Concern
Company key audit matter)
(Group
and
Disclosure quality
to
Refer
the Audit, Risk and
Compliance Committee Report on
page 14 and basis of preparation note
1.1
The financial statements explain how the
Board has formed a judgement that it is
appropriate to adopt the going concern
basis of preparation for the Group and
Company.
That judgement is based on an evaluation
of the inherent risks to the Group and
Company’s business model and how those
the Group and
risks might affect
Company’s financial resources or ability to
continue operations over a period of at
least a year from the date of approval of
the financial statements.
The risks most likely to adversely affect the
Group and Company’s available financial
resources over this period were:
•
•
the ability to continue to generate
positive cash flows; and
the ability of a related entity to provide
funding to the Group and Company.
The risk for our audit was whether or not
those risks were such that they amounted
to a material uncertainty that may have
cast significant doubt about the ability to
continue as a going concern. Had they
been such, then that fact would have been
required to be disclosed.
We considered whether these risks could
plausibly affect the liquidity in the going
concern period by assessing the Directors’
sensitivities over
level of available
the
financial resources indicated by the Group
and Company’s financial forecasts taking
account of severe, but plausible, adverse
effects that could arise from these risks
individually and collectively.
Our procedures also included:
Historical comparisons:
• We assessed the reasonableness of
the budgets by comparing them to
the
actual
historical
previous
forecasts.
results and considering
accuracy
of
Sensitivity analysis:
• We considered sensitivities over the
level of available financial resources
indicated by the Group and Company’s
financial forecasts and actual audited
information at year-end considering
plausible but not unrealistic adverse
effects that could arise from these risks
individually and collectively.
Key dependency assessment:
• We inspected a letter received by the
Directors indicating the related entity’s
intention to provide financial support.
• We held discussions and reviewed the
financial position of the related entity to
ensure they had adequate financial
resources to provide this support over
the period of the Group and Company’s
going
and
assessed the business reasons why
the related entity may or may not
choose to provide this support.
assessment,
concern
Assessing adequacy of disclosures
• We considered whether
the going
concern disclosure in note 1.1 to the
financial statements gives a full and
accurate description of the Directors’
assessment of going concern, including
the identified risks, dependencies, and
related sensitivities.
20
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc continued
3. Our application of materiality and an overview of the scope of our audit
Materiality for the consolidated financial statements as a whole was set at US$ 42,000, determined with reference to a benchmark
of Group net gaming revenue of US$ 4,616,846, of which it represents approximately 0.9% (2022: 0.9%). Materiality for the
Company financial statements was set at US$ 14,820 (2022: US$ 36,000), determined with reference to a benchmark of Company
total assets of US$ 1,975,242 (2022: US$ 2,093,759) of which it represents approximately 35.2% (2022: 85.7%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in
individual account balances add up to a material amount across the financial statements as a whole. Performance materiality for
the Group was set at 75% (2022: 75%) of materiality for the financial statements as a whole, which equates to US$ 31,500 (2022:
US$ 33,000) for the Group and US$ 11,100 (2022: US$ 27,000) for the Company. We applied this percentage in our determination
of performance materiality because we did not identify any factors indicating an elevated level of risk.
We reported to the Audit Committee any corrected or uncorrected identified misstatements exceeding US$ 2,100 for the Group
(2022: US$ 2,200) and US$ 700 for the Company (2022: US$ 1,800), in addition to other identified misstatements that warranted
reporting on qualitative grounds.
Our audit of the Group was undertaken to the materiality level specified above, which has informed our identification of significant
risks of material misstatement and the associated audit procedures performed in those areas as detailed above.
The group team performed the audit of the Group as if it was a single aggregated set of financial information. The audit was
performed using the materiality level set out above and covered 100% of total Group revenue, total Group profit before tax, and
total Group assets and liabilities.
4. Going concern
The Directors have prepared the consolidated financial statements on the going concern basis as they do not intend to liquidate the
Group or the Company or to cease their operations, and as they have concluded that the Group and the Company's financial
position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast
significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the consolidated
financial statements (the “going concern period").
An explanation of how we evaluated management’s assessment of going concern is set out in the related key audit matter in the
key audit matters section of this report.
Our conclusions based on this work:
• we consider that the Directors' use of the going concern basis of accounting in the preparation of the consolidated
financial statements is appropriate;
• we have not identified, and concur with the Directors' assessment that there is not, a material uncertainty related to events
or conditions that, individually or collectively, may cast significant doubt on the Group and the Company's ability to
continue as a going concern for the going concern period; and
• we have nothing material to add or draw attention to in relation to the Directors' statement in the notes to the consolidated
financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast
significant doubt over the Group and the Company's use of that basis for the going concern period, and that statement is
materially consistent with the consolidated financial statements and our audit knowledge. See the Key Audit Matter with
respect to going concern for additional detail.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the
Group and the Company will continue in operation.
5. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
•
•
•
enquiring of management as to the Group’s and Company’s policies and procedures to prevent and detect fraud as well
as enquiring whether management have knowledge of any actual, suspected, or alleged fraud;
reading minutes of meetings of those charged with governance; and
using analytical procedures to identify any unusual or unexpected relationships.
21
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc continued
5. Fraud and breaches of laws and regulations – ability to detect continued
Identifying and responding to risks of material misstatement due to fraud continued
As required by auditing standards, and taking into account possible incentives or pressures to misstate performance and our overall
knowledge of the control environment, we perform procedures to address the risk of management override of controls and the risk
of fraudulent revenue recognition, and the risk that management may be in a position to make inappropriate accounting entries. We
did not identify any additional fraud risks.
We performed procedures including:
•
•
•
identifying journal entries and other adjustments to test based on risk criteria and comparing any identified entries to
supporting documentation;
incorporating an element of unpredictability in our audit procedures; and
those set out in the revenue recognition key audit matter.
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements
from our sector experience and through discussion with management (as required by auditing standards), and from inspection of
the Group’s regulatory and legal correspondence, if any, and discussed with management the policies and procedures regarding
compliance with laws and regulations. As the Group is regulated, our assessment of risks involved gaining an understanding of the
control environment including the entity’s procedures for complying with regulatory requirements.
The Group and Company are subject to laws and regulations that directly affect the financial statements including financial
reporting legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of
our procedures on the related financial statement items.
The Group and Company are subject to other laws and regulations where the consequences of non-compliance could have a
material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or
impacts on the Group and the Company’s ability to operate. We identified Gaming regulation as being the area most likely to have
such an effect, recognising the regulated nature of the Group’s and Company’s activities and its legal form. Auditing standards limit
the required audit procedures to identify non-compliance with these laws and regulations to enquiry of management and inspection
of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident
from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify
it.
In addition, as with any audit, there remains a higher risk of non-detection of fraud, as this may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material
misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance
with all laws and regulations.
6. Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual
report but does not include the consolidated financial statements and our auditor's report thereon. Our opinion on the consolidated
financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as
explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
22
Webis Holdings plc
Independent Auditor’s Report to the Members of Webis Holdings plc continued
7. Matters on which we are required to report by exception
Under the Companies Acts 1931 to 2004, we are required to report to you if, in our opinion:
•
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches
not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of Directors’ remuneration specified by law are not made; or
•
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
8. Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 15, the Directors are responsible for: the preparation of the consolidated
financial statements including being satisfied that they give a true and fair view; such internal control as they determine is
necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to
fraud or error; assessing the Group and Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Company
or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a
high level of assurance but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial
statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
9. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with section 15 of the Companies Act 1982. Our
audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.
Fahd Kherati
For and on behalf of KPMG Audit LLC
Chartered Accountants
Isle of Man
30 November 2023
23
Webis Holdings plc
Consolidated Statement of Comprehensive Income
For the year ended 31 May 2023
Amounts wagered
Revenue
Cost of sales
Betting duty paid
Gross profit
Operating costs
Loss allowance on trade receivables
Other gains
Government grant
Other income
Operating loss
Finance costs
Loss before income tax
Income tax expense
Loss for the year
Total comprehensive loss for the year
Basic earnings per share for loss attributable to the equity holders of the Company
during the year (cents)
Diluted earnings per share for loss attributable to the equity holders of the
Company during the year (cents)
The notes on pages 28 to 53 form part of these financial statements.
Note
2023
US$000
2022
US$000
113,371
120,140
1.2
1.2
21
15
3
4
6
7
7
50,020
53,612
(45,303)
(48,462)
(100)
(101)
4,617
5,049
(5,488)
(5,604)
(2)
34
—
247
(592)
(153)
(745)
—
(745)
(745)
11
20
(48)
324
(248)
(126)
(374)
—
(374)
(374)
(0.19)
(0.10)
(0.18)
(0.09)
24
Webis Holdings plc
Statements of Financial Position
As at 31 May 2023
Note
31.05.23
Group
US$000
31.05.23
Company
US$000
31.05.22
Group
US$000
31.05.22
Company
US$000
Non-current assets
Intangible assets
Property, equipment, and motor vehicles
Investments
Bonds and deposits
Total non-current assets
Current assets
Bonds and deposits
Cash, cash equivalents and restricted cash
Trade and other receivables
Total current assets
Total assets
Equity
Called up share capital
Share option reserve
Retained losses
Total equity
Current liabilities
Trade and other payables
Loans, borrowings, and lease liabilities
Total current liabilities
Non-current liabilities
Loans, borrowings, and lease liabilities
Total non-current liabilities
Total liabilities
Total equity and liabilities
8
9
10
11
11
12
13
17
17
14
16
16
19
661
—
100
780
883
3,285
1,378
5,546
6,326
6,334
42
—
1
3
—
4
—
1,227
745
1,972
1,976
11
724
—
100
835
883
4,139
1,190
6,212
7,047
—
3
3
—
6
—
1,266
821
2,087
2,093
6,334
6,334
6,334
42
42
42
(5,803)
(5,828)
(5,058)
(5,711)
573
548
1,318
665
3,712
462
4,174
1,579
1,579
5,753
6,326
78
350
428
1,000
1,000
1,428
1,976
3,640
109
3,749
1,980
1,980
5,729
7,047
78
—
78
1,350
1,350
1,428
2,093
The notes on pages 28 to 53 form part of these financial statements.
The financial statements were approved by the Board of Directors on 29 November 2023.
Denham Eke
Non-executive Chairperson
25
Webis Holdings plc
Statements of Changes in Equity
For the year ended 31 May 2023
Group
Called up
share capital
US$000
Share option
reserve
US$000
Retained
earnings
US$000
Total
equity
US$000
Balance as at 31 May 2021
6,334
42
(4,684)
1,692
Total comprehensive loss for the year:
Loss for the year
Balance as at 31 May 2022
Total comprehensive profit for the year:
Loss for the year
Balance as at 31 May 2023
—
6,334
—
6,334
—
42
—
42
(374)
(5,058)
(745)
(5,803)
(374)
1,318
(745)
573
Company
Called up
share capital
US$000
Share option
reserve
US$000
Retained
earnings
US$000
Total
equity
US$000
Balance as at 31 May 2021
6,334
42
(5,516)
860
Total comprehensive loss for the year:
Loss for the year
Balance as at 31 May 2022
Total comprehensive profit for the year:
Loss for the year
Balance as at 31 May 2023
—
6,334
—
6,334
—
42
—
42
(195)
(5,711)
(117)
(5,828)
(195)
665
(117)
548
The notes on pages 28 to 53 form part of these financial statements.
26
Webis Holdings plc
Consolidated Statement of Cash Flows
For the year ended 31 May 2023
Cash flows from operating activities
Loss before income tax
Adjustments for:
- Depreciation of property, equipment, and motor vehicles
- Amortisation of intangible assets
- Rent concessions received
- Loan interest paid
- Re-recognition of PPP loan
- (Increase) / decrease in movement of restricted cash
- Increase in lease liabilities
- Other foreign exchange movements
Changes in working capital:
- (Increase) / decrease in receivables
- Increase / (decrease) in payables
Net cash used in operating activities
Cash flows from investing activities
Purchase of intangible assets
Purchase of property, equipment, and motor vehicles
Net cash used in investing activities
Cash flows from financing activities
Loan interest paid
Payment of lease liabilities - principal
Payment of lease liabilities - interest
Rent concessions received
Repayment of loans and borrowings
Net cash used in financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gains / (losses) on cash and cash equivalents
Cash and cash equivalents at end of year
The notes on pages 28 to 53 form part of these financial statements.
Note
2023
US$000
2022
US$000
(745)
(374)
9
8
19
15
8
9
19
19
19
16
137
5
(18)
101
—
(60)
59
(47)
128
7
(2)
101
48
768
25
(66)
(188)
706
72
(1,355)
(684)
(14)
(13)
(13)
(26)
(6)
—
(6)
(101)
(101)
(89)
(59)
18
(20)
(251)
(961)
(92)
(25)
2
(6)
(222)
(242)
3,062
3,238
47
66
12
2,148
3,062
27
Webis Holdings plc
Notes to the Financial Statements
For the year ended 31 May 2023
1 Reporting entity
Webis Holdings plc (the “Company”) is a company domiciled in the Isle of Man. The address of the Company’s registered office
is Viking House, Nelson Street, Douglas, Isle of Man, IM1 2AH. The Webis Holdings plc consolidated financial statements as at
and for the year ended 31 May 2023 consolidate those of the Company and its subsidiaries (together referred to as the
“Group”). The Group’s primary activities are the provision of pari-mutuel wagering services, through its Isle of Man and USA
based subsidiaries and the hosting of harness racing, through its USA based subsidiary.
1.1 Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in accordance with UK Adopted – International Accounting
Standards. They were authorised for issue by the Board on 29/11/2023.
The Group has consistently applied the accounting policies as set out in note 1.2 to all periods presented in these financial
statements.
Functional and presentational currency
These financial statements are presented in US Dollars which is the Company’s functional and presentational currency.
Financial information presented in US Dollars has been rounded to the nearest thousand, unless otherwise indicated. All
continued operations of the Group have US Dollars as their functional currency.
Other information presented
In line with the Isle of Man Companies Acts 1931-2004, the Company also presents Parent Company Statements of Financial
Position, the Parent Company Statement of Changes in Equity and related disclosures. The Company applies the requirements
of UK Adopted International Accounting Standards, as indicated in the relevant accounting policies below, when preparing the
Company statement of financial position and related notes.
(b) Basis of measurement
The Group consolidated financial statements are prepared under the historical cost convention except where assets and
liabilities are required to be stated at their fair value.
(c) Use of estimates and judgement
The preparation of the Group financial statements in conformity with UK Adopted – International Accounting Standards requires
management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of
assets and liabilities, income, and expenses. Although these estimates are based on management’s best knowledge and
experience of current events and expected economic conditions, actual results may differ from these estimates.
The Directors consider the only critical estimate area to be as follows:
• Note 21 – the measurement of Expected Credit Loss (“ECL”) allowance for trade and other receivables and assessment of
specific impairment allowances where receivables are past due.
Going concern
The Group and Parent Company financial statements have been prepared on a going concern basis.
As indicated in the statement of comprehensive income, the Group has incurred a net loss in the current year of US$ 745,000
(2022: loss of US$ 374,000) and due to that, net assets reduced from US$ 1,318,000 to US$ 573,000. WatchandWager.com
Ltd generated a profit of US$ 99,000, while WatchandWager.com LLC incurred a loss of US$ 727,000.
Based on forecasts prepared by the Directors, the Group and the Company will sustain losses to November 2024 and is
dependent on continued financial support from Galloway Limited in order to continue its operations and implement growth
strategies. To this end, in September 2023, Galloway Limited has agreed a new convertible loan of GBP 750,000, which will
assist in investing the Group’s business-to-customer sector, including a programme of software developments of its main
website www.watchandwager.com and marketing the mobile product.
The Directors have also announced that the Group and the Company will seek to further invest in key marketing techniques,
especially player recruitment and retention with special focus on online marketing techniques.
This aligns with the Group and the Company’s ongoing strategies, which are pursued in order to help achieve and maintain its
goal of profitability and maintaining adequate liquidity in order to continue its operations, with these strategies including:
•
•
broadening the Group’s client base and the continued expansion of its business to customer base;
continuing to renew and acquire further US state regulated gaming licenses and continuing to develop and expand the
Cal Expo racetrack operation; and
28
Webis Holdings plc
Notes to the Financial Statements continued
1.1 Basis of preparation continued
Going concern continued
•
taking advantage of the anticipated regulatory change in the State of California’s adoption of sports betting legislation
which will further open up opportunities for the Group.
Whilst the Directors continue to assess all strategic options in relation to the strategies noted in the previous paragraph, the
Directors recognize that the ultimate success of strategies adopted is difficult to predict as they require additional liquidity to
pursue the required investment, including bonds to be placed with the relevant authorities to allow for betting on those tracks
and excess cost to be paid to service providers to add more servers to allow for increased number of users. The Directors have
prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements which indicate
that, taking account of reasonably possible downsides, and with consideration of the additional financial support received from
Galloway Limited in September 2023, the Group and the Company are projected to have sufficient funds. Projections are
inherently uncertain (also considering the history of losses) and, in that regard, Galloway Limited has committed to extend
funding in case the Group and the Company face any difficulty in meeting their liabilities as they fall due for that period.
The Group and the Company have, in previous years, received financial support from Galloway Limited (related entity) and
Galloway Limited has expressed its willingness to continue to make funds available as and when needed by the Group and the
Company. The loans from Galloway Limited stand at US$ 1,350,000 as at 31 May 2023, with additional funding of GBP 750,000
agreed in September 2023.
As with any company placing reliance on other parties for financial support, the Directors acknowledge that there can be no
certainty that this support will continue, although, at the date of approval of these financial statements, they have no reason to
believe that it will not do so.
Based on these indications and factors, the Directors believe that it remains appropriate to prepare the financial statements on
a going concern basis.
1.2 Summary of significant accounting policies
During the current year the Group adopted all the new and revised IFRSs that are relevant to its operation and are effective for
accounting periods beginning on 1 June 2022. No adoptions had a material effect on the accounting policies of the Group.
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented unless otherwise stated.
Basis of consolidation
The consolidated financial statements incorporate the results of the Group. Subsidiaries are consolidated from the date of
acquisition, being the date on which the Group obtains control, and continue until the date that such control ceases. Control
exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to
obtain benefits from its activities.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree
and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs
are expensed as incurred.
Inter-company transactions, balances, and unrealised gains on transactions between the Group companies are eliminated.
Unrealised losses are also eliminated. When necessary amounts reported by subsidiaries have been adjusted to conform with
the Group’s accounting policies.
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). As the primary activities of the Group and the
primary transactional currency of the Group’s customers are carried out in US Dollars, the consolidated financial statements
have been presented in US Dollars, which is the Company’s presentational and functional currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash
29
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Foreign currency translation continued
(b) Transactions and balances continued
flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings are presented
in the income statement within ‘Finance income’ or ‘Finance costs’. All other foreign exchange gains and losses are presented
in the income statement within ‘Other (losses)/gains’.
Revenue from contracts with customers
The Group generates revenue primarily from the provision of wagering services and the hosting of races on which guests are
entitled to participate in the related wagering services. Revenue is measured at fair value based on the consideration specified
in a contract with a customer. The Group recognises revenue when it discharges services to a customer. Revenue has been
disaggregated by geographical locations which are consistent with the operating segments (note 2).
Hosting fees (Racetrack operations) are recognised when the customers participate in the Group’s pari-mutuel pools and the
race audio visual signals are transmitted. Hosting fees are recorded on a gross receipts basis.
Wagering revenue from the Group’s activities as the race host is recognised when a race on which wagers are placed is
completed. The wagering commission from the Group’s commingling of its wagering pools with a host’s pool is recognised
when the race on which those wagers are placed is completed. The Group acts as a principal when it allows customers to place
wagers in the races it hosts and as an agent when it allows customers to place wagers in other entities’ races. Where the Group
acts as a principal, the entire wager is recognised as revenue and where it is an agent the wagering commission the Group
retains is recognised as revenue.
Settlement terms for revenue where the Group acts as a host is usually 7 days for on and off-track wagering and 30 days from
month end for ADW wagering. Where the Group acts as an agent, settlement terms are typically 30 days from month end.
Transactions fees (ADW operations) are recognised when the Group facilitates customers’ deposit transactions into their betting
accounts. The Group recognises revenue for transaction services net of related winnings.
Cost of sales
The Group recognises cost of sales related to the Racetrack operations in which it is the race host. The cost of sales includes
direct costs such as purses, hub fees, import fees, pay-outs, and other statutory distributions.
Government grants
The Group initially recognises government grants, that compensate for expenses incurred, as deferred income at fair value if
there is a reasonable assurance that they will be received. They are then recognised in profit or loss on a systematic basis in
the periods in which the expenses are recognised.
Segmental reporting
Segmental reporting is based on the business areas in accordance with the Group’s internal reporting structure, which allows
the individual operating segments to be identified by the disparate nature of the principal activity they undertake. The Group
determines and presents segments based on the information that internally is provided to the Board and Managing Director, the
Group’s chief operating decision maker.
An operating segment is a component of the Group and engages in business activities from which it may earn revenues and
incur expenses. An operating segment’s operating results are reviewed regularly by the Board and Managing Director to make
decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial
information is available.
Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the
extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to
the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate
of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using
tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
30
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Current and deferred income tax continued
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from
the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or
loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting
date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is
settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries except for
deferred income tax liability, where the timing of the reversal of the temporary difference is controlled by the Group and it is
probable that the temporary difference will not reverse in the foreseeable future. Only where there is an agreement in place that
gives the Group the ability to control the reversal of the temporary difference is the liability not recognised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to
the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available
against which the temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes, assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances
on a net basis.
Intangible assets — goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group’s
interest in net fair value of the net identifiable assets, liabilities, and contingent liabilities of the acquiree and the fair value of the
non-controlling interest in the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating
units (“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units
to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal
management purposes. Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a
potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use
and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently
reversed.
Intangible assets — other
(a) Trademarks and licences
Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in a business
combination are recognised at fair value at the acquisition date. Trademarks and licences have a finite useful life and are
carried at cost less accumulated amortisation and any accumulated impairment. Amortisation is calculated using the straight-
line method to allocate the cost of trademarks and licences over their estimated useful lives of three years. Renewal costs are
expensed in the year they relate to.
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. These costs are amortised over their estimated useful lives of three years.
(b) Website design and development costs
Costs associated with maintaining websites are recognised as an expense as incurred. Development costs that are directly
attributable to the design and testing of identifiable and unique websites controlled by the Group are recognised as intangible
assets when the following criteria are met:
• it is technically feasible to complete the website so that it will be available for use;
• management intends to complete the website and use it;
• there is an ability to use the website;
• it can be demonstrated how the website will generate probable future economic benefits;
• adequate technical, financial, and other resources to complete the development and to use the website are available; and
• the expenditure attributable to the website during its development can be reliably measured.
31
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Intangible assets — other continued
Directly attributable costs that are capitalised as part of the website include the website employee costs and an appropriate
portion of relevant overheads.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period.
Website development costs recognised as assets are amortised over their estimated useful lives, which do not exceed three
years.
Property, equipment, and motor vehicles
Items of property, equipment and motor vehicles are stated at historical cost less accumulated depreciation (see below) and
impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the item
can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the financial position date. An asset’s
carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount. Depreciation is calculated using the straight-line method to allocate the cost of property,
equipment, and motor vehicles over their estimated useful lives.
The estimated useful lives of property, equipment and motor vehicles for current and comparative periods are as follows:
Motor vehicles
3 years
Plant and equipment
5 years Fixtures and fittings
3-5 years
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
‘Other gains/(losses) – net’ in the income statement.
Investment in subsidiary
A subsidiary is an entity controlled by the entity. The Company controls an investee when the Company is exposed or has rights
to variable returns from its involvement with the investee and can affect the return through its power over the investee. Control
exists when the Company has the power to govern the financial and operating policies of an entity to obtain benefits from its
activities. In assessing control, potential voting rights that are currently exercisable are considered.
Investment in subsidiaries are initially recognized at cost. At subsequent reporting dates, the recoverable amounts are
estimated to determine the extent of impairment losses, if any, and carrying amounts of investments are adjusted accordingly.
Impairment losses are recognized as an expense. Where impairment losses subsequently reverse, the carrying amounts of the
investments are increased to the revised recoverable amounts but limited to the extent of initial cost of investments. A reversal
of impairment loss is recognized in the profit or loss.
Share-based payment expense
The Group and the Company operate an equity-settled, share-based compensation plan, under which the entity receives
services from employees as consideration for equity instruments (options) of the Group and the Company. The fair value of the
employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be
expensed is determined by reference to the fair value of the options granted:
• including any market performance conditions (for example, an entity’s share price); and
• excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth
targets and remaining an employee of the entity over a specified time-period).
Non-market performance and service conditions are included in assumptions about the number of options that are expected to
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied.
At the end of each reporting period, the Group revises its estimates of the number of options that are expected to vest based on
the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement,
with a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares. The proceeds received net of any directly attributable
transaction costs are credited to share capital (nominal value) and share premium.
32
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Equity
Share capital is determined using the nominal value of shares that have been issued.
Equity settled share-based employee remuneration is credited to the share option reserve until related stock options are
exercised. On exercise or lapse, amounts recognised in the share option reserve are taken to share capital.
Retained earnings include all current and prior period results as determined in the income statement and any other gains or
losses recognised in the Statement of Changes in Equity.
Financial instruments
Recognition and measurement
Non-derivative financial instruments include trade and other receivables, cash and cash equivalents, bonds and deposits,
borrowings and trade and other payables.
Financial assets and financial liabilities are recognised on the Group and the Company’s balance sheet when the Group and/or
the Company become party to the contractual terms of the instrument. Transaction costs are included in the initial measurement
of financial instruments, except financial instruments classified as at fair value through profit or loss. The subsequent
measurement of financial instruments is dealt with below.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
Cash and cash equivalents
Cash and cash equivalents are defined as cash in bank and in hand as well as bank deposits, money held for processors and
cash balances held on trust for the customers entitled to them. Cash equivalents are held for the purpose of meeting short-term
cash commitments rather than for investment or other purposes. These are subsequently measured at amortized cost as stated
under “Impairment of financial assets” below.
Bonds and deposits
Bonds and deposits are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
Borrowings
Interest-bearing borrowings and overdrafts are recorded at the proceeds received net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct issue costs are charged on an accrual basis using the
effective interest method and are added to the carrying amount of the instrument.
Trade and other payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method.
Impairment of financial assets
The Group and the Company use an impairment model that applies to financial assets measured at amortised cost and contract
assets and is detailed below. Financial assets at amortised cost include trade receivables, cash and cash equivalents, bonds
and deposits.
Performing financial assets
Stage 1 (0-30 Days)
From initial recognition of a financial asset to the date on which an asset has experienced a significant increase in credit risk
relative to its initial recognition, a stage 1 loss allowance is recognised equal to the credit losses expected to result from its
default occurring over the next 12 months (‘12-month ECL’).
Stage 2 (31-90 Days)
Following a significant increase in credit risk relative to the initial recognition of the financial asset, a stage 2 loss allowance is
recognised equal to the credit losses expected from all possible default events over the remaining lifetime of the asset (‘Lifetime
ECL’). The assessment of whether there has been a significant increase in credit risk requires considerable judgment, based on
the lifetime probability of default (‘PD’). Any financial asset that had been outstanding for greater than 30 days would be
assessed on an individual basis to determine if it qualified as a significant increase in credit risk. Stage 1 and 2 allowances are
held against performing loans; the main difference between stage 1 and stage 2 allowances is the time horizon. Stage 1
allowances are estimated using the PD with a maximum period of 12 months, while stage 2 allowances are estimated using the
PD over the remaining lifetime of the asset.
33
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Financial instruments continued
Impairment of financial assets continued
Impaired financial assets
Stage 3 (After 90 Days)
When a financial asset is considered to be credit-impaired, the allowance for credit losses (‘ACL’) continues to represent lifetime
expected credit losses, however, interest income is calculated based on the amortised cost of the asset, net of the loss
allowance, rather than its gross carrying amount.
The Group applies the ECL model to two main types of financial assets that are measured at amortised cost:
Trade receivables, to which the simplified approach (provision matrix) prescribed by IFRS 9 is applied. This approach requires
the recognition of a Lifetime ECL allowance on day one. In the normal course of operations, trade receivables could be
considered to be in default after 90 days.
Other financial assets at amortised cost, to which the general three stage model (described above) is applied, whereby a 12-
month ECL is recognised initially and the balance is monitored for significant increases in credit risk which triggers the
recognition of a Lifetime ECL allowance.
ECLs are a probability-weighted estimate of credit losses. ECLs for financial assets that are not credit-impaired at the reporting
date are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due in accordance with
the contract and the cash flows that the Company expects to receive). ECLs for financial assets that are credit-impaired at the
reporting date are measured as the difference between the gross carrying amount and the present value of estimated future
cash flows. ECLs are discounted at the effective interest rate of the financial asset which is 0% for all financial assets at
amortised cost. The maximum period considered when estimating ECLs is the maximum contractual period over which the
Group is exposed to credit risk. The measurement of ECLs considers information about past events and current conditions, as
well as supportable information about future events and economic conditions. The Group reviews its impairment methodology
for estimating the ECLs, taking into account forward-looking information in determining the appropriate level of allowance. In
addition, it identifies indicators and set up procedures for monitoring for significant increases in credit risk.
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
i. As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement/modification date. The right-of-use
asset is initially measured at cost, and subsequently at cost less accumulated depreciation and impairment loss and adjusted for
certain remeasurements of the lease liability.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of
the lease term.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted at the Group’s applicable incremental borrowing rate (if the rate implicit in the lease cannot be determined). The
Group has measured the incremental borrowing as equal to external borrowing rates. The lease liability is subsequently
increased by the interest cost of the lease liability and decreased by the lease payment made. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to
be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension
option is reasonably certain to be exercised, or a termination option is reasonably certain not to be exercised.
The Group has applied judgment to determine the lease term for some lease contracts in which it is a lessee that include
renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term,
which affects the amount of lease liabilities and right of use assets recognised.
The Group receives rent concessions on its racetrack lease when, due to external factors, the number of days raced in a
season is lower than the actual number of days scheduled to be raced.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and
makes certain adjustments to reflect the terms of the lease and the type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
- Fixed payments, including in-substance fixed payments;
34
Webis Holdings plc
Notes to the Financial Statements continued
1.2 Summary of significant accounting policies continued
Leases continued
i. As a lessee continued
- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date;
- Amounts expected to be payable under a residual value guarantee; and
- The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional
renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease
unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in
future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount
expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a
purchase, extension, or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-
use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, equipment, and motor
vehicles’ and lease liabilities in ‘loans, borrowings and lease liabilities’ in the statement of financial position.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value items and short-term
leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the
lease term.
Employee benefits
(a) Pension obligations
The Group and the Company do not operate any post-employment schemes, including both defined benefit and defined
contribution pension plans.
(b) Short-term employee benefits
Short-term employee benefits, such as salaries, paid absences, and other benefits, are accounted for on an accrual’s basis
over the period in which employees have provided services in the year. All expenses related to employee benefits are
recognised in the Statement of Comprehensive Income in operating costs.
(c) Profit sharing and bonus plans
The Group and the Company recognises a liability and an expense for bonuses and profit sharing, based on a formula that
takes into consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group and the
Company recognises a provision where contractually obliged or where there is a past practice that has created a constructive
obligation. Any recognised liability would be settled within 12 months of the year end.
Standards and interpretations in issue not yet adopted
A number of new standards, amendments to standards and interpretations are not yet effective for the year and have not been
applied in preparing these consolidated financial statements. The Directors do not expect the adoption of the standards and
interpretations to have a material impact on the Group’s financial statements in the period of initial application.
Standards
IFRS 17 Insurance Contracts
Classification of liabilities as current or non-current (Amendments to IAS 1)
Amendments to IFRS 17
Disclosure of Accounting Policies (Amendments to IAS1 and IFRS Practice Statement 2)
Definition of Accounting Estimate (Amendments to IFRS 8)
Deferred Tax related Asset and Liabilities Arising from a Single Transaction – Amendments to
IAS 12 Income Taxes
Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures
(Amendments to FRS 10 and IAS 28)
Non-current Liabilities with Covenants and Classification of Liabilities as Current or Non-current
(Amendments to IAS 1)
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
IFRS S1 General requirements for Disclosure of Sustainability-related Financial Information and
IFRS S2 Climate-related Disclosures
Lack of Exchangeability (Amendments to IAS 21)
Effective date
(accounting periods
commencing on or after)
1 January 2023
1 January 2024
1 January 2025
35
Webis Holdings plc
Notes to the Financial Statements continued
2 Operating Segments
A. Basis for segmentation
The Group has two operating segments, which are its reportable segments. The segments offer different services in relation to
various forms of pari-mutuel racing, which are managed separately due to the nature of their activities.
Reportable segments and operations provided
Racetrack operations – hosting of races through the management and operation of a racetrack facility, enabling patrons to
attend and wager on horse racing, as well as utilise simulcast facilities.
ADW operations – provision of online ADW services to enable customers to wager into global racetrack betting pools.
The Group’s Board of Directors review the internal management reports of the operating segment on a monthly basis.
Information about reportable segments
B.
Information relating to the reportable segments is set out below. Segment revenue along with segment profit / (loss) before tax
are used to measure performance as management considers this information to be a relevant indicator for evaluating the
performance of the segments.
External revenues
Segment revenue
Segment profit / (loss) before tax
Interest expense
Depreciation and amortisation
Other material non-cash items:
-
Impairment movement on trade receivables
Segment assets
Segment liabilities
External revenues
Segment revenue
Segment profit / (loss) before tax
Interest expense
Depreciation and amortisation
Other material non-cash items:
-
Impairment movement on trade receivables
Segment assets
Segment liabilities
Reportable segments
Racetrack
2023
US$000
47,865
47,865
46
(58)
(98)
–
2,187
1,523
Corporate
operating
costs
2023
US$000
ADW
2023
US$000
2,155
2,155
(674)
(3)
(42)
(2)
2,846
2,802
–
–
(117)
(99)
(2)
–
1,293
1,428
Reportable segments
Racetrack
2022
US$000
51,225
51,225
259
(22)
(88)
–
2,324
1,522
Corporate
operating
costs
2022
US$000
ADW
2022
US$000
2,387
2,387
(438)
(6)
(44)
11
3,387
2,779
–
–
(195)
(98)
(3)
–
1,336
1,428
Total
2023
US$000
50,020
50,020
(745)
(160)
(142)
(2)
6,326
5,753
Total
2022
US$000
53,612
53,612
(374)
(126)
(135)
11
7,047
5,729
36
Webis Holdings plc
Notes to the Financial Statements continued
2 Operating Segments continued
C. Reconciliations of information on reportable segments to the amounts reported in the financial statements
i. Revenues
Total revenue for reportable segments
Consolidated revenue
ii. Loss before tax
Total loss before tax for reportable segments
Loss before tax for other segments
Consolidated loss before tax
iii. Assets
Total assets for reportable segments
Assets for other segments
Consolidated total assets
iv. Liabilities
Total liabilities for reportable segments
Liabilities for other segments
Consolidated total liabilities
v. Other material items
Interest expense
Depreciation and amortisation
Impairment movement on trade receivables
2023
US$000
2022
US$000
50,020
50,020
53,612
53,612
(628)
(117)
(745)
5,033
1,293
6,326
4,325
1,428
5,753
(160)
(142)
(2)
(179)
(195)
(374)
5,711
1,336
7,047
4,301
1,428
5,729
(126)
(135)
11
There were no reconciling items noted between Segment information and the Financial Statements.
D. Geographic information
i. Revenues
The below table analyses the geographic location of the customer base of the operating segments.
Revenue
Racetrack operations
ADW operations
ADW operations
ADW operations
2023
US$000
2022
US$000
North America
47,865
51,225
North America
1,701
1,833
British Isles
Caribbean
428
26
527
27
50,020
53,612
37
Webis Holdings plc
Notes to the Financial Statements continued
2 Operating Segments continued
D. Geographic information continued
ii. Non-current assets
The geographical information below analyses the Group’s non-current assets by the Company’s Country of Domicile (Isle of
Man) and the United States of America. Information is based on geographical location of the Group’s assets.
United States of America
Isle of Man
2023
US$000
2022
US$000
618
2
620
731
4
735
Non-current assets exclude financial instruments. During the year, additions to non-current assets for the reportable segments
were Racetrack US$ 13,000 (2022: US$ 411,000) and ADW US$ 74,000 (2022: US$ 67,000).
E. Major customers
The Group does not earn revenue of 10% or more from any external customer.
3 Operating loss
Operating loss is stated after charging:
Auditors’ remuneration — audit
Depreciation of property, equipment, and motor vehicles
Amortisation of intangible assets
Exchange (gains) / losses
Directors’ fees
4 Finance costs
Bank interest receivable
Loan interest payable
Net finance costs
5 Staff numbers and cost
Average number of employees – Pari-mutuel and Racetrack Operations
The aggregate payroll costs of these persons were as follows:
Pari-mutuel and Racetrack Operations
Wages and salaries
Social security costs
2023
US$000
2022
US$000
146
137
5
(9)
105
153
128
7
7
96
2023
US$000
2022
US$000
7
(160)
(153)
–
(126)
(126)
2023
2022
50
52
2023
US$000
2022
US$000
1,694
121
1,815
1,707
127
1,834
38
Webis Holdings plc
Notes to the Financial Statements continued
6
Income tax expense
(a) Current and Deferred Tax Expenses
The current and deferred tax expenses for the year were US$ Nil (2022: US$ Nil). Despite having made losses, no deferred tax
was recognised as there is no reasonable expectation that the Group will recover the resultant deferred tax assets.
(b) Tax Rate Reconciliation
Loss before tax
Tax charge at IOM standard rate (0%)
Adjusted for:
Tax credit for US tax losses (at 21%)
Add back tax losses not recognised
Tax charge for the year
2023
US$000
2022
US$000
(745)
–
(153)
153
–
(374)
–
(91)
91
–
The maximum deferred tax asset that could be recognised at year end is approximately US$ 1,137,000 (2022: US$ 985,000).
The Group has not recognised any asset as it might not be recoverable within the allowed period. The tax losses for tax years
beginning in January 2018 are currently permitted to be carried forward indefinitely. Tax losses incurred prior to that period
expire after 20 years.
7 Earnings per ordinary share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares,
on the assumed conversion of all dilutive share options.
An adjustment for the dilutive effect of share options in the current period has not been reflected in the calculation of the diluted
profit per share, as the effect would have been anti-dilutive.
Loss for the year
Weighted average number of ordinary shares in issue
Dilutive element of share options if exercised (note 17)
Diluted number of ordinary shares
Basic earnings per share (cents)
Diluted earnings per share (cents)
2023
US$000
2022
US$000
(745)
(374)
No.
No.
393,338,310
393,338,310
14,000,000
14,000,000
407,338,310
407,338,310
(0.19)
(0.18)
(0.10)
(0.09)
The earnings applied are the same for both basic and diluted earnings calculations per share as there are no dilutive effects to
be applied.
39
Webis Holdings plc
Notes to the Financial Statements continued
8
Intangible assets
Goodwill
Software & development
costs
Total
Group
US$000
Group
US$000
Company
US$000
Group
US$000
Company
US$000
Cost
Balance at 1 June 2021
Additions during the year
Balance at 31 May 2022
Balance at 1 June 2022
Additions during the year
Disposals/decommissioned assets
Balance at 31 May 2023
Amortisation and Impairment
Balance at 1 June 2021
Amortisation for the year
Balance at 31 May 2022
Balance at 1 June 2022
Amortisation for the year
Disposals/decommissioned assets
Balance at 31 May 2023
Carrying amounts
At 1 June 2021
At 31 May 2022
At 31 May 2023
177
–
177
177
–
–
177
177
–
177
177
–
–
177
–
–
–
606
6
612
612
13
(8)
617
594
7
601
601
5
(8)
598
12
11
19
15
–
15
15
–
(1)
14
15
–
15
15
–
(1)
14
–
–
–
783
6
789
789
13
(8)
794
771
7
778
778
5
(8)
775
12
11
19
15
–
15
15
–
(1)
14
15
–
15
15
–
(1)
14
–
–
–
The Group reviews intangible assets annually for impairment or more frequently if there are indications that the intangible
assets may be impaired (see note 1). The carrying amount of US$ 19,000 of software and development costs relates primarily
to development and integration costs of the US based wagering website. These assets will be fully amortised within the next 3
years.
.
40
Webis Holdings plc
Notes to the Financial Statements continued
9 Property, equipment, and motor vehicles
Group
Cost
Balance at 1 June 2021
Additions during the year
Balance at 31 May 2022
Balance at 1 June 2022
Additions during the year
Disposals/decommissioned assets
Balance at 31 May 2023
Depreciation
Balance at 1 June 2021
Charge for the year
Balance at 31 May 2022
Balance at 1 June 2022
Charge for the year
Disposals/decommissioned assets
Balance at 31 May 2023
Carrying amounts
At 1 June 2021
At 31 May 2022
At 31 May 2023
Company
Cost
Balance at 1 June 2021
Additions during the year
Balance at 31 May 2022
Balance at 1 June 2022
Additions during the year
Balance at 31 May 2023
Computer
Equipment
US$000
Fixtures,
Fittings &
Track
Equipment
US$000
Motor
Vehicles
US$000
Right-of-
use Assets
US$000
Total
US$000
166
–
166
166
–
(49)
117
160
3
163
163
2
(49)
116
6
3
1
321
–
321
321
13
–
334
250
18
268
268
20
–
288
71
53
46
50
–
50
50
–
–
50
24
7
31
31
7
–
38
26
19
12
473
472
1,010
472
945
1,482
945
1,482
61
74
(118)
(167)
888
1,389
196
100
296
296
108
630
128
758
758
137
(118)
(167)
286
728
277
649
602
380
724
661
Computer
Equipment
US$000
Fixtures &
Fittings
US$000
Total
US$000
37
–
37
37
–
37
80
–
80
80
–
80
117
–
117
117
–
117
41
Webis Holdings plc
Notes to the Financial Statements continued
9 Property, equipment and motor vehicles continued
Company
Depreciation
Balance at 1 June 2021
Charge for the year
Balance at 31 May 2022
Balance at 1 June 2022
Charge for the year
Balance at 31 May 2023
Carrying amounts
At 1 June 2021
At 31 May 2022
At 31 May 2023
Computer
Equipment
US$000
Fixtures &
Fittings
US$000
Total
US$000
31
3
34
34
2
36
6
3
1
80
–
80
80
–
80
–
–
–
111
3
114
114
2
116
6
3
1
10 Investments in Subsidiaries
Investments in subsidiaries are held at cost less impairment. Details of investments are as follows:
Subsidiaries
Country of
incorporation
Activity
2023
Holding (%)
2022
Holding (%)
WatchandWager.com Limited
Isle of Man
Operation of interactive wagering
totaliser hub
WatchandWager.com LLC
United States of
America
Operation of interactive wagering
totaliser hub and harness racetrack
betinternet.com (IOM) Limited
Isle of Man
Dormant
Technical Facilities & Services
Limited
Isle of Man
Dormant
100
100
100
–
100
100
100
100
A wholly owned subsidiary, Technical Facilities & Services Limited, was dissolved during the 31 May 2023 financial year. A
wholly owned subsidiary, B. E. Global Services Limited, was dissolved during the 31 May 2022 financial year. Impairment
assessment is performed annually, and this involves assessment of the net asset value and profitability of the subsidiaries.
11 Bonds and deposits
Bonds and deposits - expire within one year
Bonds and deposits - expire within one to two years
Bonds and deposits - expire within two to five years
Bonds and deposits - expire more than five years
2023
US$000
2022
US$000
883
–
–
100
983
883
–
–
100
983
Cash bonds of US$ 875,000 have been paid as security deposits in relation to various US State ADW licences (2022: US$
875,000). These cash bonds are held in trust accounts used exclusively for cash collateral, with financial institutions which
42
Webis Holdings plc
Notes to the Financial Statements continued
11 Bonds and deposits continued
have been screened for their financial strength and capitalization ratio. The financial institutions have a credit rating of A-
Excellent from AM Best credit rating agency. Therefore, these bonds are considered to be fully recoverable. A rent deposit of
US$ 100,000 is held by California Exposition & State Fair and is for a term ending in 2030 (2022: US$ 100,000). This is held
by an entity of the Californian state government and is therefore considered fully recoverable. Rent and other security
deposits total US$ 8,167 (2022: US$ 8,227). These deposits are repayable upon completion of the relevant lease term, under
the terms of legally binding agreements. The fair value of the bonds and deposits approximates to the carrying value.
12 Cash, cash equivalents and restricted cash
Cash and cash equivalents – Company and other
funds
Restricted cash – protected player funds
Total cash, cash equivalents and restricted
cash
Group
Company
2023
US$000
2022
US$000
2023
US$000
2022
US$000
2,148
1,137
3,285
3,062
1,077
4,139
116
1,111
189
1,077
1,227
1,266
The Group holds funds for operational requirements and for its non-Isle of Man customers, shown as ‘Company and other
funds’ and on behalf of its Isle of Man regulated customers and certain USA state customers, shown as ‘protected player funds’.
Protected player funds are held in fully protected client accounts within an Isle of Man regulated bank and in segregated
accounts within a USA regulated bank. These funds are segregated from operational funds of the Company and are held on
trust for the customers entitled to them.
13 Trade and other receivables
Trade receivables
Amounts due from Group undertakings
Other receivables and prepayments
Group
Company
2023
US$000
2022
US$000
2023
US$000
2022
US$000
612
–
766
395
–
795
1,378
1,190
–
680
65
745
–
757
64
821
Included within trade receivables are impairment provisions of US$ 68,837 (see note 21), (2022: US$ 67,293). Other
receivables include accrued and other income due to the Group, along with sundry other debtors. Amounts due from Group
undertakings are unsecured, interest free and repayable on demand.
14 Trade and other payables
Trade payables
Amounts due to customers
Taxes and national insurance
Accruals and other payables
Group
Company
2023
US$000
2022
US$000
2023
US$000
2022
US$000
436
2,089
18
1,169
3,712
659
2,037
16
928
3,640
8
–
2
68
78
7
–
2
69
78
43
Other payables include distributions and purses payable for the racetrack operations, along with sundry other payables.
Webis Holdings plc
Notes to the Financial Statements continued
15 Deferred income (Government Grant)
The Group received a Paycheck Protection Program (“PPP”) loan for US$ 319,994, under the provisions of the US CARES Act
in May 2020 to support certain incurred expenses, the provisions of which allowed for an application for loan forgiveness. The
Group had ascertained reasonable assurance that the loan should be forgiven in its entirety and the application for forgiveness
was submitted in June 2021, with the application agreed by the lending bank. The grant was recognised in profit or loss in the
periods that the relevant expenses were recognised. After final review by the Small Business Administration, it was determined
that the lending bank had calculated and advanced a loan amount greater than it should have. The resultant difference of US$
48,427 was recognised as a loan (financial liability) at 31 May 2022 (see note 16). There is no balance in deferred income at 31
May 2023.
16 Loans, borrowings, and lease liabilities
Current liabilities
Unsecured loans (current portion)
Lease liabilities (current portion)
Secured loans – Galloway Limited
Non-current liabilities
Unsecured loans (non-current portion)
Lease liabilities (non-current portion)
Secured loans – Galloway Limited
Terms and repayment schedule
Unsecured loans
Lease liabilities
Secured loan 2017 - Galloway Limited*
Secured loan 2019 - Galloway Limited*
Secured loan 2020 - Galloway Limited*
Total loans and borrowings
Group
Company
2023
US$000
2022
US$000
2023
US$000
2022
US$000
21
91
350
462
20
89
–
109
–
–
350
350
–
–
–
–
Group
Company
2023
US$000
2022
US$000
2023
US$000
2022
US$000
26
553
1,000
1,579
47
583
1,350
1,980
–
–
1,000
1,000
–
–
1,350
1,350
Nominal
interest rate
Year of
maturity
1.00-8.90%
2025
6.00-9.50%
2023-30
7.75%
7.00%
7.00%
2027
2024
2025
2023
Total
US$000
2022
Total
US$000
47
644
500
350
500
67
672
500
350
500
2,041
2,089
During 2022, the Group received an unsecured Paycheck Protection Program (“PPP”) loan for US$ 48,427, which matures on 7
May 2025 and attracts interest at 1% per annum (see note 15).
The secured loans from Galloway Limited are secured over the unencumbered assets of the Group, which includes the Cash
and cash equivalents – Company and other funds of US$ 2,148,000 (2022: US$ 3,062,000) and Cash bonds of US$ 875,000
(2022: US$ 875,000). In September 2023, the Group obtained additional financing from Galloway Limited, which included the
Secured loan 2017 of US$ 500,000, being rolled into the new financing (see note 23).
*Based on current interest rates, the estimated fair value of the Galloway Limited loans is US$ 1.078 million.
44
Webis Holdings plc
Notes to the Financial Statements continued
16 Loans, borrowings and lease liabilities continued
Reconciliation of movements of liabilities to cash flows arising from financing activities
Balance at 1 June 2021
1,375
292
1,667
Other loans and
borrowings
US$000
Lease liabilities
US$000
Total
US$000
Changes from financing cash flows
Proceeds from loans, borrowings, and lease liabilities
Repayment of borrowings
Payment of lease liabilities
Rent concession received
Interest paid
Total changes from financing cash flows
Other changes
Liability-related
Re-recognition of PPP loan
New leases
Rent concession received
Interest expense
Total liability-related other changes
Balance at 31 May 2022
–
(6)
–
–
(101)
(107)
48
–
–
101
149
1,417
25
–
(117)
2
(25)
(115)
–
472
(2)
25
495
672
25
(6)
(117)
2
(126)
(222)
48
472
(2)
126
644
2,089
Balance at 1 June 2022
1,417
672
2,089
Changes from financing cash flows
Proceeds from loans, borrowings, and lease liabilities
Repayment of borrowings
Payment of lease liabilities
Rent concession received
Interest paid
Total changes from financing cash flows
Other changes
Liability-related
New leases
Rent concession received
Interest expense
Total liability-related other changes
Balance at 31 May 2023
–
(20)
–
–
(101)
(121)
61
–
101
162
1,458
59
–
(148)
18
(59)
(130)
–
(18)
59
41
583
59
(20)
(148)
18
(160)
(251)
61
(18)
160
203
2,041
45
Webis Holdings plc
Notes to the Financial Statements continued
17 Share capital
No.
2023
US$000
2022
US$000
Allotted, issued, and fully paid
At beginning and close of year: ordinary shares of 1p each
393,338,310
6,334
6,334
At 31 May: ordinary shares of 1p each
393,338,310
6,334
6,334
The authorised share capital of the Company is US$ 9,619,000 divided into 600,000,000 ordinary shares of £0.01 each (2022:
US$ 9,619,000 divided into 600,000,000 ordinary shares of £0.01 each). This is the sole class of shares authorised and issued
by the Company and these shares convey the right for shareholders to vote at general meetings, to receive dividends and to
receive surplus assets on the liquidation of the Company. There are no preferences or restrictions attached to these shares.
Neither the Company, nor its subsidiaries, hold any shares in the Company. Share options are shown below.
Options
Movements in share options during the year were as follows:
At start of year – number of 1p ordinary shares
Options granted
Options lapsed
Options exercised
2023
2022
14,000,000 14,000,000
–
–
–
–
–
–
At end of year – number of 1p ordinary shares
14,000,000 14,000,000
The options were issued on 3 March 2016 to Ed Comins, Managing Director of the Group and vested on 3 March 2019. The
options expire on 2 March 2026. The weighted average exercise price of all options is £0.01.
18 Capital commitments
As at 31 May 2023, the Group had no capital commitments (2022: US$ Nil).
19 Leases
A. Leases as lessee
The Group leases office and racetrack facilities. The office facility is leased until May 2023, with an average length of renewal of
between two to three years. This was renewed in 2023 for a further two years. The racetrack facility is leased until May 2030,
with extensions or renewals typically ranging between three to five years. Extension/renewal is only available to lessor on terms
and conditions to be agreed between both parties. All currently available options to extend have been exercised.
The Group also leases additional office facilities with contract terms of no more than one year. These leases are short-term,
and the Group has elected not to recognise right-of-use assets and lease liabilities for these leases.
Information about leases for which the Group is a lessee is presented below.
i. Right-of-use assets
Right-of-use assets related to leased properties that do not meet the definition of investment property are presented within
property, equipment, and motor vehicles.
46
Webis Holdings plc
Notes to the Financial Statements continued
19 Leases continued
A. Leases as lessee continued
i. Right of use assets continued
Group
Cost
Balance at 1 June 2021
Additions during the year
Balance at 31 May 2022
Balance at 1 June 2022
Additions during the year
Disposals during the year
Balance at 31 May 2023
Depreciation
Balance at 1 June 2021
Charge for the year
Balance at 31 May 2022
Balance at 1 June 2022
Charge for the year
Disposals during the year
Balance at 31 May 2023
Carrying amounts
At 1 June 2021
At 31 May 2022
At 31 May 2023
ii. Amounts recognised in profit or loss
Interest on lease liabilities
Depreciation expense
Rent concessions received
Expenses relating to short-term leases
iii. Amounts recognised in statement of cash flows
Payment of lease liabilities - principal
Payment of lease liabilities - interest
Rent concessions received
Property
US$000
Total
US$000
473
472
945
945
61
(118)
888
196
100
296
296
108
(118)
286
277
649
602
473
472
945
945
61
(118)
888
196
100
296
296
108
(118)
286
277
649
602
2023
US$000
2022
US$000
59
108
(18)
59
25
100
(2)
71
2023
US$000
2022
US$000
(89)
(59)
18
(92)
(25)
2
47
Webis Holdings plc
Notes to the Financial Statements continued
20 Related party transactions
Identity of related parties
The Parent Company has a related party relationship with its subsidiaries (see note 10), and with its Directors and executive
officers and with Burnbrae Ltd (significant shareholder).
Transactions and balances with and between subsidiaries
Transactions with and between the subsidiaries in the Group, which have been eliminated on consolidation, are considered to
be related party transactions. During the year, Webis Holdings plc recharged head office costs to WatchandWager.com Ltd of
US$ 238,104 (2022: US$ 248,340) and
to WatchandWager.com LLC of US$ 357,156 (2022: US$ 372,511).
WatchandWager.com LLC recharged support costs of US$ 8,120 (2022: US$ 9,644) to WatchandWager.com Ltd. At the year
end, Webis Holdings plc had receivable balances with WatchandWager.com Ltd of US$ 168,575 (2022: US$ 224,074) and with
WatchandWager.com LLC of US$ 511,166 (2022: US$ 532,548). WatchandWager.com Ltd had a receivable balance of US$
7,656,283 (2022: US$ 7,608,501) with WatchandWager.com LLC. There were no impairments on these balances.
Transactions and balances with entities with significant influence over the Group
Rental and service charges of US$ 41,617 (2022: US$ 46,914) and Directors’ fees of US$ 38,681 (2022: US$ 27,193) were
charged in the year by Burnbrae Limited, of which Denham Eke is a common Director and Katie Errock an employee. Trade
payables at the year-end of US$ 3,580 (2022: US$ 3,752) related to rental and service charges. The Group also had loans of
US$ 1,350,000 (2022: US$ 1,350,000) from Galloway Limited, a company related to Burnbrae Limited by common ownership
and Directors (note 16). Interest expense of US$ 99,498 (2022: US$ 97,293) was paid on this loan.
Transactions with key management personnel
The total amounts for Directors’ remuneration were as follows:
Emoluments — salaries, bonuses, and taxable benefits
— fees
2023
US$000
2022
US$000
368
105
473
345
96
441
Directors’ Emoluments
Executive
Ed Comins
Non-executive
Denham Eke*
Sir James Mellon
Richard Roberts
Katie Errock*
Basic
salary
US$000
Fees
US$000
Bonus
US$000
Termination
payments
US$000
Benefits
US$000
2023
Total
US$000
2022
Total
US$000
341
—
—
—
—
—
24
18
48
15
—
—
—
—
—
—
—
—
—
—
—
—
27
—
—
—
—
27
368
345
24
18
48
15
27
21
48
—
473
441
Aggregate emoluments
341
105
* Paid to Burnbrae Limited.
14,000,000 share options were issued to Ed Comins (see note 17) during 2016.
48
Webis Holdings plc
Notes to the Financial Statements continued
21 Financial risk management
Capital structure
The Group’s capital structure is as follows:
Cash and cash equivalents
Loans and similar liabilities
Net funds
Shareholders’ equity
Capital employed
2023
US$000
2022
US$000
2,148
3,062
(1,397)
(1,417)
751
(573)
178
1,645
(1,318)
327
The Group’s policy is to maintain as strong a capital base as possible, insofar as can be sustained due to the fluctuations in the
net results of the Group and the inherent effect this has on the capital structure. The Group monitors costs on an ongoing basis
and undertakes actions to grow revenue, with the aim of improving the Group’s capital base. The Group does not have any
external capital requirements imposed upon it.
The Group’s principal financial instruments comprise cash and cash equivalents, trade receivables and payables that arise
directly from its operations.
The main purpose of these financial instruments is to finance the Group’s operations. The existence of the financial instruments
exposes the Group to a number of financial risks, which are described in more detail below.
The principal risks which the Group is exposed to relate to liquidity risks, credit risks and foreign exchange risks.
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its financial obligations as they fall due.
The Group’s objective is to maintain continuity of funding through trading and share issues but to also retain flexibility through
the use of short-term loans if required.
Management controls and monitors the Group’s cash flow on a regular basis, including forecasting future cash flow. Banking
facilities are kept under review to ensure they meet the Group’s requirements. Funds equivalent to customer balances are held
in designated bank accounts where applicable to ensure that Isle of Man Gambling Supervision Commission player protection
principles are met. Other customer balances are covered by cash funds held within the Group and by receivables due from
ADW racetrack settlement partners. The Directors anticipate that the business will maintain sufficient cash flow in the
forthcoming period, to meet its immediate financial obligations.
The following are the contractual maturities of financial assets and financial liabilities:
2023
Financial assets
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
5+
years
US$000
Cash, cash equivalents and restricted cash
3,285
3,285
3,285
Trade receivables
Other receivables
Bonds and deposits
612
645
983
612
645
983
612
645
683
5,525
5,525
5,225
–
–
–
200
200
–
–
–
–
–
–
–
–
100
100
49
Webis Holdings plc
Notes to the Financial Statements continued
21 Financial risk management continued
Liquidity risk continued
2022
Financial assets
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
5+
years
US$000
Cash, cash equivalents and restricted cash
4,139
4,139
4,139
Trade receivables
Other receivables
Bonds and deposits
2023
Financial liabilities
395
668
983
395
668
983
395
668
681
6,185
6,185
5,883
–
–
–
202
202
–
–
–
–
–
–
–
–
100
100
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
5+
years
US$000
Trade payables
(436)
(436)
(436)
Amounts due to customers
(2,089)
(2,089)
(2,089)
Other payables and loans
Lease liabilities
(2,153)
(2,372)
(644)
(872)
(815)
(27)
–
–
–
–
(406)
(1,151)
–
–
–
(122)
(493)
(230)
(5,322)
(5,769)
(3,367)
(528)
(1,644)
(230)
2022
Financial liabilities
Trade payables
Amounts due to customers
Other payables and loans
Lease liabilities
Carrying
amount
US$000
Contractual
cash flow
US$000
6 months
or less
US$000
Up to
1 year
US$000
1–5
years
US$000
5+
years
US$000
(659)
(659)
(659)
(2,037)
(2,037)
(2,037)
–
–
–
–
(1,899)
(2,214)
(541)
(58)
(1,615)
(673)
(952)
(26)
(121)
(460)
(5,268)
(5,862)
(3,263)
(179)
(2,075)
–
–
–
(345)
(345)
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge
an obligation.
Impairment losses on financial assets recognised in profit or loss were as follows:
Non-credit impaired trade receivables
Credit impaired trade receivables
Total impairment losses
2023
US$000
2022
US$000
7
62
69
5
62
67
50
Webis Holdings plc
Notes to the Financial Statements continued
21 Financial risk management continued
Credit risk continued
The Group’s exposure to credit risk is influenced by the characteristics of the individual racetracks and the settling agents
operating on behalf of these tracks. The racetracks themselves are influenced by many factors, including the product they offer,
supporting sources of revenue they might generate, such as offering simulcast, slots or sports wagering facilities, current
economic conditions, ownership structure, state laws and so on, all of which may affect their liquidity and ability to operate.
The Group limits its exposure to credit risk by regular settling and verification of balances due to and from settling agents, with
standard terms of one month. While there is on occasion debt that is slower to be settled, historical settlements for at least the
last six years show that of the current trade receivable balance, greater than 99% would be expected to be received.
In addition, the majority of the current Group customers have transacted with the Group for five years or more and none of
these customers balances have been specifically impaired in that period.
The Group has continued to take a conservative approach to the assessment of the Weighted Average Loss Rate and
maintained rates that are considered to reflect the risk that exists under current market conditions. The previous two years
Weighted Average Loss Rate was reflective of the uncertainty caused by the COVID-19 pandemic and therefore the current
year rates are adjusted due to a reduction in this associated risk.
The following table provides information about exposure to credit risk and expected credit losses for trade receivables as at 31
May 2023:
2023
Current (not past due)
1-30 days past due
31-60 days past due
61-90 days past due
More than 90 days past due
More than 90 days past due
2022
Current (not past due)
1-30 days past due
31-60 days past due
61-90 days past due
More than 90 days past due
More than 90 days past due
Weighted
Average
Loss Rate
(%)
0.50%
1.00%
3.00%
5.00%
7.00%
100.00%
Gross
Carrying
Amount
US$000
421
110
70
6
12
62
681
Loss
Allowance
US$000
(2)
(1)
(2)
(1)
(1)
(62)
(69)
Net
Carrying
Amount
US$000
419
109
68
5
11
—
612
Credit
Impaired
No
No
No
No
No
Yes
Weighted
Average Loss
Rate (%)
1.00%
2.00%
5.00%
7.00%
10.00%
100.00%
Gross Carrying
Amount
US$000
374
9
16
(1)
2
62
462
Loss Allowance
US$000
(4)
(0)
(1)
(0)
(0)
(62)
(67)
Net Carrying
Amount
US$000
370
9
15
(1)
2
—
395
Credit Impaired
No
No
No
No
No
Yes
The Group uses an allowance matrix to measure the ECLs of trade receivables from racetracks and their settling agents, which
comprise a moderate number of balances, ranging from small to large. The Group has reviewed its historical losses over the
past four years as well as considering current economic conditions in estimating the loss rates and calculating the
corresponding loss allowance.
51
Webis Holdings plc
Notes to the Financial Statements continued
21 Financial risk management continued
Credit risk continued
Classes of financial assets — carrying amounts
Cash and cash equivalents
Bonds and deposits
Trade and other receivables
2023
US$000
2022
US$000
2,148
983
1,258
4,389
3,062
983
1,063
5,108
Generally, the maximum credit risk exposure of financial assets is the carrying amount of the financial assets as shown on the
face of the Statements of Financial Position (or in the notes to the financial statements). Credit risk, therefore, is only disclosed
in circumstances where the maximum potential loss differs significantly from the financial asset’s carrying amount.
The maximum exposure to credit risks for receivables in any business segment:
Pari-mutuel
2023
US$000
2022
US$000
1,258
1,063
Of the above receivables, US$ 612,000 (2022: US$ 395,000) relates to amounts owed from racing tracks. These receivables
are actively monitored to avoid significant concentration of credit risk and the Directors consider there to be no significant
concentration of credit risk.
The Directors consider that all the above financial assets that are not impaired for each of the reporting dates under review are
of good credit quality. The banks have external credit ratings of at least Baa3 from Moody’s.
The credit risk for liquid funds and other short-term financial assets is considered negligible since the counterparties are
reputable banks with high-quality external credit ratings.
Interest rate risk
The Group finances its operations mainly through capital with limited levels of borrowings. Cash at bank and in hand earns
negligible interest at floating rates, based principally on short-term interbank rates.
Any movement in interest rates would not be considered to have any significant impact on net assets at the balance sheet date
as the Group and Parent Company do not have floating rate loans payable.
Foreign currency risks
The Group operates internationally and is subject to transactional foreign currency exposures, primarily with respect to Pounds
Sterling, Hong Kong Dollars, and Euros.
The Group does not actively manage the exposures but regularly monitors the Group’s currency position and exchange rate
movements and makes decisions as appropriate.
At the reporting date the Group had the following exposure:
2023
Current assets
Current liabilities
Short-term exposure
USD
US$000
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
4,703
(3,146)
1,557
114
(334)
(220)
86
(43)
43
523
(633)
(110)
5,426
(4,156)
1,270
52
Webis Holdings plc
Notes to the Financial Statements continued
21 Financial risk management continued
Foreign currency risks continued
2022
Current assets
Current liabilities
Short-term exposure
USD
US$000
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
5,197
(2,705)
2,492
236
(317)
(81)
85
(69)
16
568
6,086
(642)
(3,733)
(74)
2,353
The following table illustrates the sensitivity of the net result for the year and equity with regards to the Group’s financial assets
and financial liabilities and the US Dollar–Sterling exchange rate, US Dollar–Euro exchange rate and US Dollar–Hong Kong
Dollar exchange rate.
A 5% weakening of the US Dollar against the following currencies at 31 May 2023 would have increased / (decreased) equity
and profit and loss by the amounts shown below:
2023
Current assets
Current liabilities
Net assets
2022
Current assets
Current liabilities
Net assets
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
6
(17)
(11)
4
(2)
2
26
(32)
(6)
36
(51)
(15)
GBP
US$000
EUR
US$000
HKD
US$000
Total
US$000
12
(16)
(4)
4
(3)
1
28
(32)
(4)
44
(51)
(7)
A 5% strengthening of the US Dollar against the above currencies would have had the equal but opposite effect on the above
currencies to the amounts shown above on the basis that all other variables remain constant.
22 Controlling party and ultimate controlling party
The Directors consider the ultimate controlling party to be Burnbrae Limited and its beneficial owner Jim Mellon by virtue of their
combined shareholding of 63.10%.
23 Subsequent events
In September 2023, the Group has agreed funding of GBP 1,150,000 from Galloway Limited (related entity), in the form of
convertible loan notes, which will enable the Group to further invest in its business-to-consumer sector. The loan will accrue
interest at the rate of 11% per annum and is convertible into shares under specific circumstances. The convertible loan notes
comprise GBP 750,000 in respect of new funding and an existing debt of GBP 400,000, after conversion of US$ 500,000 due
and outstanding by the Group to Galloway Limited (see note 16).
53
Webis Holdings plc
Notice of Meeting
NOTICE IS HEREBY GIVEN that the Annual General
Meeting of Webis Holdings plc (the “Company”) will be held
at The Claremont Hotel, 18/19 Loch Promenade, Douglas,
Isle of Man, on 30 January 2024 at 10 am for the purpose of
transacting the below business.
The Board considers it important that all shareholders should
have the opportunity to exercise their voting rights at the
AGM. To this end, the Company invites shareholders to
complete the voting proxy form as early as possible.
Shareholders may also submit questions to the Company
Secretary either in writing at the registered office or by email
to ir@webisholdingsplc.com prior to the meeting and as early
as possible.
Ordinary Business
1 To receive and adopt the report of the Directors and the
accounts for the year ended 31 May 2023.
2 To re-elect as a director Edward Comins who retires by
rotation and being eligible, offers himself for re-election in
accordance with the Company’s Articles of Association.
3 To reappoint KPMG Audit LLC as auditors and to
authorise the Directors to determine their remuneration.
Special Business
To consider and, if thought fit, to pass the following
resolutions:
As an Ordinary Resolution
4 That the authority granted by special resolution to the
Directors of the Company to allot relevant securities up to
an amount equal to but not exceeding the authorised but
unissued share capital of the Company for the time being
which was passed at the Annual General Meeting of the
Company held on 9 December 2002 be renewed
pursuant to the power provided by Article 6(C) of the
Company’s Articles of Association, that such renewal of
authority be for the exercise of that power generally and
unconditionally and in all respects in the same terms as
originally granted, and that such authority shall expire at
the conclusion of the next Annual General Meeting of the
Company after the date of passing of this resolution
unless renewed, varied or revoked by the Company in
General Meeting.
As a Special Resolution
5 The Directors of the Company be and they are hereby
empowered pursuant to Article 8 of the Company’s
Articles of Association (the “Articles”) to allot equity
securities (as defined in Article 7(H) of the Articles)
pursuant to the authority conferred on the Directors to
allot relevant securities by Resolution 4 above as if
Article 7(A) of the Articles did not apply to such allotment
PROVIDED THAT this power shall be limited to:
(i) the allotment of equity securities in connection with a
rights issue in favour of ordinary shareholders where
the equity securities are issued proportionally (or as
nearly as may be) to the respective number of
ordinary shares held by such shareholders (but
subject to such exclusions or other arrangements as
the Directors may deem necessary or expedient to
deal with issues arising under the laws of any territory
or the requirements of any regulatory body or any
stock exchange in any territory or the fixing of
exchange rates applicable
to any such equity
securities where such equity securities are to be
issued to shareholders in more than one territory, or
legal or practical problems in respect of overseas
shareholders, fractional entitlements or otherwise
howsoever);
(ii) the allotment of equity securities to holders of any
options under any share option scheme of the
Company for the time being in force, on the exercise
by them of any such options; and
(iii) the allotment (otherwise than pursuant to paragraphs
(i) or (ii) above) of equity securities up to a maximum
aggregate nominal value equal to 50% of the issued
ordinary share capital of the Company for the time
being.
the
The power hereby conferred shall expire at
conclusion of the next Annual General Meeting of the
Company after the date of passing of this resolution
unless such power shall be renewed in accordance with
and subject to the provisions of the said Article 8 of the
Articles, save that the Company may before such expiry
make an offer or agreement which would or might require
equity securities to be allotted after such expiry and the
Directors may allot equity securities pursuant to such
offer or agreement as if the power conferred hereby had
not expired.
As Ordinary Resolutions
6 That in accordance with Article 12 of the Company’s
Articles of Association and with Section 13 of the
Companies Act 1992 the Company be generally and
unconditionally authorised to make market purchases (as
defined by Section 13(2) of the Companies Act 1992) of
ordinary shares of 1 pence each in its capital, provided
that:
(a) the maximum number of shares that may be acquired
is 39,333,831;
(b) the minimum price that may be paid for the shares is
1 pence;
(c) the maximum price that may be paid is, for a share
the Company contracts to purchase on any day, a
sum equal to 105% of the average of the upper and
lower quotations on the Daily Official List of the
London Stock Exchange for the ordinary shares of the
Company on the five business days immediately
preceding that day; and
(d) the authority conferred by this resolution shall expire
at the conclusion of the next Annual General Meeting
of the Company after the date of the passing of this
resolution unless renewed, varied, or revoked by the
Company in General Meeting, but not so as to
prejudice the completion of a purchase contracted
before that date.
54
Webis Holdings plc
Notice of Meeting continued
As Ordinary Resolutions continued
7 That the Report of the Remuneration Committee be
received and adopted.
By order of the Board
Katie Errock
Company Secretary
29 November 2023
Registered Office: Viking House
Nelson Street, Douglas
Isle of Man, IM1 2AH
Notes
1. Members are entitled to appoint a proxy to exercise
all or any of their rights to attend and vote on their
behalf at the meeting. A proxy need not be a
shareholder of the Company. A shareholder may
appoint more than one proxy in relation to the
Annual General Meeting provided that each proxy is
appointed to exercise the rights attached to a
different share or shares held by that shareholder.
than one proxy you may
To appoint more
photocopy the proxy form accompanying this notice.
Please indicate the proxy holder’s name and the
number of shares in relation to which they are
authorised
in
to act as your proxy
aggregate, should not exceed the number of shares
held by you). Please also indicate if the proxy
instruction is one of multiple instructions being
given. All forms must be signed and should be
returned together in the same envelope.
(which,
2. To be valid, the form of proxy and the power of
attorney or other authority (if any) under which it is
signed - or a notarially certified or office copy of
such power or authority - must be lodged at the
the Company’s
following postal address of
registrars, PXS 1, Link Group, Central Square, 29
Wellington Street, Leeds, LS1 4DL by hand, or sent
by post, so as to be received not less than 48 hours
before the time fixed for the holding of the meeting
or any adjournment thereof (as the case may be).
3. Proxymity Voting - if you are an institutional investor,
you may also be able to appoint a proxy electronically
via the Proxymity platform, a process which has been
agreed to by the Company and approved by the
Registrar. For further information regarding Proxymity,
please go to www.proxymity.io. Your proxy must be
lodged by 10 am on 26 January 2024 in order to be
considered valid or, if the meeting is adjourned, by the
time which is 48 hours before the time of the adjourned
meeting. Before you can appoint a proxy via this
process you will need to have agreed to Proxymity’s
associated terms and conditions. It is important that you
read these carefully as you will be bound by them, and
they will govern the electronic appointment of your
proxy. An electronic proxy appointment via
the
Proxymity platform may be revoked completely by
sending an authenticated message via the platform
instructing the removal of your proxy vote.
4. The completion and return of a form of proxy, or the
appointment of a proxy via Proxymity, will not preclude a
member from attending in person at the meeting and
voting should he or she wish to do so.
5. In the case of a corporation, the form of proxy must be
executed under its common seal, or the hand of an
officer or attorney duly authorised.
6. A member may appoint a proxy of his or her own choice.
If the name of the member’s choice is not entered in the
space provided on the form of proxy, the return of the
form of proxy duly signed will authorise the chairperson
of the meeting to act as that member’s proxy.
7. To abstain from voting on a resolution, select the relevant
‘withheld’ box. A vote withheld is not a vote in law and will
not be counted in the calculation of votes for or against
the resolution. If no voting indication is given, your proxy
will vote or abstain from voting at his or her discretion.
Your proxy will vote (or abstain from voting) as he or she
thinks fit in relation to any other matter which is put
before the meeting.
8. Pursuant to regulation 22 of the Uncertificated Securities
Regulations 2005, the Company has specified that only
those members entered on the register of members at 10
a.m. on 26 January 2024 shall be entitled to attend and
vote at the meeting. Changes to the register after 10 a.m.
on 26 January 2024 shall be disregarded in determining
the rights of any person to attend and vote at the
meeting.
9. Where a corporation is to be represented at the meeting
by a personal representative, such corporation must
deposit a certified copy of the resolution of its Directors or
other governing body authorising the appointment of the
representative at the Company’s registered office: Viking
House, Nelson Street, Douglas, Isle of Man, IM1 2AH not
later than 48 hours before the time appointed for the
holding of the meeting.
55
Webis Holdings plc
56
Webis Holdings plc
Nominated Adviser and Broker
Beaumont Cornish Limited
Building 3, Chiswick Park
566 Chiswick High Road
London
W4 5YA
Legal Advisors
Long & Co Limited
Eyreton
Quarterbridge Road
Douglas
Isle of Man
IM2 3RF
UK Registrar
Link Asset Services
The Registry, 34 Beckenham Road
Beckenham
Kent
BR3 4TU
Corporate Website
www.webisholdingsplc.com
Twitter
@WebisHoldings
Company Information
Directors
Denham Eke
Non-Executive Chairperson
Ed Comins
Managing Director
Richard Roberts
Independent Non-Executive Director
Katie Errock
Non-Executive Director
Company Secretary
Katie Errock
Registered Office
Viking House
Nelson Street
Douglas, Isle of Man
IM1 2AH
Bankers
Nedbank Private Wealth Ltd
St Mary’s Court
20 Hill Street
Douglas
Isle of Man
IM1 1EU
Auditor
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas, Isle of Man
IM1 1LA
57
Webis Holdings plc
Webis Holdings plc
Viking House, Nelson Street
Douglas, Isle of Man
IM1 2AH, British Isles
Email: ir@webisholdingsplc.com
Website: www.webisholdingsplc.com
58