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REGISTERED NUMBER: 09491005 (England and Wales)















GENBA DIGITAL LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021






GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)






CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021




Page

Company Information 1

Strategic Report 2

Report of the Directors 4

Report of the Independent Auditors 5

Income Statement 8

Other Comprehensive Income 9

Balance Sheet 10

Statement of Changes in Equity 11

Cash Flow Statement 12

Notes to the Cash Flow Statement 13

Notes to the Financial Statements 14


GENBA DIGITAL LIMITED

COMPANY INFORMATION
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021







DIRECTORS: U Akpinar
E Erturk
M P Murphy



REGISTERED OFFICE: 7 Clarendon Place
Leamington Spa
Warwickshire
CV32 5QL



REGISTERED NUMBER: 09491005 (England and Wales)



AUDITORS: Burrows Scarborough Limited
(Statutory Auditor)
Sovereign House
12 Warwick Street
Coventry
CV5 6ET



BANKERS: Barclays
Leicester
Leicestershire
LE87 2BB

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

STRATEGIC REPORT
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

The directors present their strategic report for the period 1 July 2020 to 31 December 2021.

The principal activity of the company is as a technology-based distribution partner between digital video games producers and online retailers. The business combines a cloud-based market-leading technology stack with a wraparound product management and marketing service to effectively manage product launch and promotional sales campaigns between more than 100 content creators and a network in excess of 300 digital sales channels. The company works with 5 of the world's top 10 video games publishers and some of the largest global online retail channels.

REVIEW OF BUSINESS
For the 18-month period under review, the overall profit for the period before tax was £365,635 (2020 £1,101,019 for the 12-month period), which the Directors consider a very positive result given the backdrop of a challenging economic environment, the COVID pandemic and the acquisition in May 2021 of the company by Azerion Games en Content Holding BV incorporating the cost of the share option exercise.

Financial Highlights (comparing an 18-month period to the 12-month prior period) which include our financial key performance indicators are as follows:

- Turnover for the year £65,208,189 was up by £47,029,791 (up 258%) on 2020
- Gross profit of £7,371,130 up by £4,367,425 (up 145%)
- Operating profit of £2,567,752 up by £1,466,733 (up 133%)
- Profit before tax of £365,635 was down by £735,384 (down 67%)

Profit before tax was impacted during the year, as the company's share option scheme was exercised in May 2021 at acquisition. Details of this can be found in note 18 in the notes to the financial statements.

The company's net assets have increased by £2,765,333 to £4,758,748. Cash balances at the year-end had increased from £2,545,891 to £3,334,447.

GROWTH

Over the course of the 18-month period, the company grew by using several levers. Firstly, the number of publisher relationships for distributing content grew to almost 100 by the end of 2021, and the scope of the geographical distribution rights expanded, with most agreements covering global distribution. Secondly, the number of (direct and indirect affiliate) sales channels grew to over 300, covering more than 200 countries across the globe - expanding in Asia, Latin America and increasing the penetration in EMEA and North America. Thirdly, the number of relationships between the existing GENBA network increased enormously. Monthly unique promotional relationships (a proxy for the scale of sales campaigns) have grown 272% from 551 in July 2020 to 2,054 in December 2021. Fourthly, the variety of digital content that GENBA offers has expanded to include digital software and digital subscriptions/games currencies to add to the hugely successful digital game downloads.

There were 11m units sold in the 12 months of 2021 (up 40% on 2020) and 24,394 unique promotions generating 9m of total unit sales (up 35% on 2020). Promotional sales units dominated total sales as a result of a lower-than-normal year for new releases impacted by the COVID pandemic on development and new game release timetables.

The Genba team grew from 19 FT staff in July 2020 to 27 in December 2021 as the company completed the transition to an inhouse technology team from outsourced partners and expanded the strength and depth of the commercial team.

The company built, released, and migrated all clients to the latest version of the GENBA technology in 2021 - built by the inhouse technical team using Microsoft technologies and hosted in the Microsoft Azure cloud.

The Genba Strategic Partner Programme culminated in the acquisition of the company in May 2021 by Azerion Games en Content Holding BV. Azerion operates one of Europe's fastest growing media and entertainment platforms and Genba plans to integrate services with the wider Azerion Group businesses for the benefit of existing and new clients.


GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

STRATEGIC REPORT
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

PRINCIPAL RISKS AND UNCERTAINTIES
The company's customer base is concentrated within the gaming industry, and consequently, the principal risk to the business is posed by a potential reduction in demand, both in the UK and abroad of the sale of digital content via third parties. The dedicated account management team ensures that the company remains close to its clients and their changing demands within the digital video games and software industries. The covid-19 pandemic actually saw the video games market grow which has been maintained, but at a slower rate, since.

The main technological risk is that the GENBA platform could become obsolete or develop significant technical debt. The investment of the Genba inhouse technical resources and the additional resources from the acquiring company, Azerion, will ensure that the GENBA platform remains amongst best in class and can handle the demands of clients across the globe from a volume, efficiency, resilience and security perspective.

The Company has budgetary and financial reporting procedures, supported by Key Performance Indicators (KPI's) to manage credit, liquidity and other financial risk.

Given that the company principal activity is to collects large amounts of royalty payments from across the globe on a monthly basis, the company is exposed to some exchange rate risk as royalty amounts collected in one of three currencies don't always match the payments in each currency. The company uses natural hedging to limit this potential financial risk.

RESEARCH AND DEVELOPMENT

In the period under review, Genba invested significantly in designing, building and releasing the latest version of the GENBA platform technology that manages the secure distribution of digital content across the globe in real time. The product development, built in Microsoft technologies, moved GENBA from a dual data-centre hosted infrastructure to a cloud-based one in Microsoft Azure. The inbuilt workflow optimisation, enhanced security features, increased automation and overall improved resilience and performance sets up the company in the future for handling the increasing volume of transactions across multiple vertical markets, all time zones and greater number of integrated partners.

ON BEHALF OF THE BOARD:





M P Murphy - Director


23 August 2022

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

REPORT OF THE DIRECTORS
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

The directors present their report with the financial statements of the company for the period 1 July 2020 to 31 December 2021.

DIVIDENDS
No dividends will be distributed for the period ended 31 December 2021.

DIRECTORS
M P Murphy has held office during the whole of the period from 1 July 2020 to the date of this report.

Other changes in directors holding office are as follows:

U Akpinar - appointed 18 May 2021
G Du Toit - resigned 18 May 2021
E Erturk - appointed 18 May 2021
M Hayes - resigned 18 May 2021
C L Ralley - resigned 18 May 2021
A Riegler - resigned 18 May 2021

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS
The auditors, Burrows Scarborough Limited, are deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:





M P Murphy - Director


23 August 2022

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
GENBA DIGITAL LIMITED

Opinion
We have audited the financial statements of Genba Digital Limited (the 'company') for the period ended 31 December 2021 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its profit for the period then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. 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.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us 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 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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
GENBA DIGITAL LIMITED


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the 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 the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

It is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the company's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

- obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the company operates in and how the company is complying with the legal and regulatory frameworks;
- enquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
- discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102 and the Companies Act 2006 regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements, which included:

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and assessing whether the judgements made in making accounting estimates are indicative of potential bias.
- Enquiring of management around actual and potential litigation and claims.
- Enquiring of company's staff in tax and compliance.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Other matters
The corresponding figures for the year to 30th June 2020 are unaudited.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
GENBA DIGITAL LIMITED


Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 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 a Report of the Auditors 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 the company's members as a body, for our audit work, for this report, or for the opinions we have formed.




Adam Bexon MChem FCA (Senior Statutory Auditor)
for and on behalf of Burrows Scarborough Limited
(Statutory Auditor)
Sovereign House
12 Warwick Street
Coventry
CV5 6ET

23 August 2022

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

INCOME STATEMENT
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

Period
1.7.20
to Year Ended
31.12.21 30.6.20
Notes £    £   

TURNOVER 3 65,208,189 18,178,398

Cost of sales 57,837,059 15,174,693
GROSS PROFIT 7,371,130 3,003,705

Administrative expenses 4,803,378 1,902,686
OPERATING PROFIT 5 2,567,752 1,101,019

Cost of share option exercise 7 2,202,117 -
PROFIT BEFORE TAXATION 365,635 1,101,019

Tax on profit 8 (79,520 ) 71,083
PROFIT FOR THE FINANCIAL PERIOD 445,155 1,029,936

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

OTHER COMPREHENSIVE INCOME
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

Period
1.7.20
to Year Ended
31.12.21 30.6.20
Notes £    £   

PROFIT FOR THE PERIOD 445,155 1,029,936


OTHER COMPREHENSIVE INCOME
Reserves transfer 2,202,117 -
Income tax relating to other comprehensive
income

-

-
OTHER COMPREHENSIVE INCOME FOR
THE PERIOD, NET OF INCOME TAX

2,202,117

-
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD

2,647,272

1,029,936

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

BALANCE SHEET
31 DECEMBER 2021

2021 2020
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 9 715,934 477,420
Tangible assets 10 26,665 22,445
742,599 499,865

CURRENT ASSETS
Debtors 11 17,902,258 6,276,172
Cash at bank 3,334,447 2,545,891
21,236,705 8,822,063
CREDITORS
Amounts falling due within one year 12 17,215,491 7,324,249
NET CURRENT ASSETS 4,021,214 1,497,814
TOTAL ASSETS LESS CURRENT
LIABILITIES

4,763,813

1,997,679

PROVISIONS FOR LIABILITIES 14 5,065 4,264
NET ASSETS 4,758,748 1,993,415

CAPITAL AND RESERVES
Called up share capital 15 1,764 1,528
Share premium 16 1,178,817 1,060,992
Retained earnings 16 3,578,167 930,895
SHAREHOLDERS' FUNDS 4,758,748 1,993,415

The financial statements were approved by the Board of Directors and authorised for issue on 23 August 2022 and were signed on its behalf by:





M P Murphy - Director


GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

Called up Share
share Retained Share option Total
capital earnings premium reserve equity
£    £    £    £    £   

Balance at 1 July 2019 1,528 (99,041 ) 1,060,992 - 963,479

Changes in equity
Total comprehensive income - 1,029,936 - - 1,029,936
Balance at 30 June 2020 1,528 930,895 1,060,992 - 1,993,415

Changes in equity
Issue of share capital 236 - 117,825 - 118,061
Total comprehensive income - 2,647,272 - - 2,647,272
Balance at 31 December 2021 1,764 3,578,167 1,178,817 - 4,758,748

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

CASH FLOW STATEMENT
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

Period
1.7.20
to Year Ended
31.12.21 30.6.20
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 3,918,236 573,151
Tax paid (66,819 ) -
Net cash from operating activities 3,851,417 573,151

Cash flows from investing activities
Purchase of intangible fixed assets (258,969 ) (189,908 )
Purchase of tangible fixed assets (17,968 ) (8,477 )
Net cash from investing activities (276,937 ) (198,385 )

Cash flows from financing activities
Loans to group companies (2,903,985 ) -
Share issue 118,061 -
Net cash from financing activities (2,785,924 ) -

Increase in cash and cash equivalents 788,556 374,766
Cash and cash equivalents at beginning
of period

2

2,545,891

2,171,125

Cash and cash equivalents at end of
period

2

3,334,447

2,545,891

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

NOTES TO THE CASH FLOW STATEMENT
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
Profit before taxation 365,635 1,101,019
Depreciation charges 34,203 6,521
Share option exercise 2,202,117 -
2,601,955 1,107,540
Increase in trade and other debtors (8,641,780 ) (3,708,435 )
Increase in trade and other creditors 9,958,061 3,174,046
Cash generated from operations 3,918,236 573,151

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Period ended 31 December 2021
31.12.21 1.7.20
£    £   
Cash and cash equivalents 3,334,447 2,545,891
Year ended 30 June 2020
30.6.20 1.7.19
£    £   
Cash and cash equivalents 2,545,891 2,171,125


3. ANALYSIS OF CHANGES IN NET FUNDS

At 1.7.20 Cash flow At 31.12.21
£    £    £   
Net cash
Cash at bank 2,545,891 788,556 3,334,447
2,545,891 788,556 3,334,447
Total 2,545,891 788,556 3,334,447

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

1. STATUTORY INFORMATION

Genba Digital Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared on a going concern basis, are presented in sterling which is the functional currency of the company and are rounded to the nearest £.

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

The company's financial reporting date was extended to 31 December 2021 this year. This was to enable the company to have the same financial year end as the rest of the group. On this basis the comparative figures will not entirely be comparable.

The nature of the company's operations and principal activity is that of digital logistics platform providing operational and technical logistics involved with publishing and selling digital content by delivering automatic, secure delivery of activation keys, official publisher metadata and promotional content in multiple languages.

Related party exemption
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Significant judgements and estimates
Some of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and estimates are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience, but actual results may differ from the amounts included in the financial statements. Information about such judgements and estimation is contained in these accounting policies and/or the notes to the financial statements and the key areas are summarised below:

Judgements in applying accounting policies
There are no judgements (apart from those involving estimates) that have been made in the process of applying these accounting policies that have had a significant effect on amounts recognised in the financial statements.

Sources of estimation uncertainty
The only significant source of estimation uncertainty is in relation to amortisation and depreciation rates, which are based on estimates of the useful lives and residual values of the assets involved (see the intangible and tangible fixed asset accounting policies).

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Sale of goods

Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods has transferred to the buyer. This is usually at the point that the customer has accepted delivery of the goods.

Rendering of services

Turnover from the rending of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. Turnover is only recognised to the extent of recoverable expenses when the outcome of a contract cannot be measured reliably.

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

2. ACCOUNTING POLICIES - continued

Intangible assets
Intangible assets are development costs that have been capitalised as they relate to IT systems being used to generate income in the future.

Intangible assets are originally measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs are being amortised at 33% per annum on a reducing balance basis as management believe that this will most accurately reflect the use of the IT systems.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Computer equipment - 33% on reducing balance

Financial instruments
The company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade debtors and creditors, loans from third parties and loans to and from related parties.

Debt instruments that are payable or receivable within one year (which includes all debt instruments included in the financial statements) are measured initially and subsequently at the undiscounted amount of the cash or other consideration expected to be paid or received.

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Taxation
Taxation 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.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
Collections 57,837,059 15,174,693
Service charges 7,324,915 2,996,799
Other income 46,215 6,906
65,208,189 18,178,398

An analysis of turnover by geographical market is given below:

Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
United Kingdom 6,984,858 3,221,857
Europe 47,795,897 8,890,318
Rest of the World 10,427,434 6,066,223
65,208,189 18,178,398

4. EMPLOYEES AND DIRECTORS
Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
Wages and salaries 2,327,458 1,053,441
Social security costs 274,393 127,149
Other pension costs 36,255 14,693
2,638,106 1,195,283

The average number of employees during the period was as follows:
Period
1.7.20
to Year Ended
31.12.21 30.6.20

Office and administration 22 16
Directors 2 5
24 21

Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
Directors' remuneration 415,649 310,738
Directors' pension contributions to money purchase schemes 3,635 2,631

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

4. EMPLOYEES AND DIRECTORS - continued

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 3 3

Two directors exercised share options during the period (2020 - no directors).

Information regarding the highest paid director is as follows:
Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
Emoluments etc 303,059 -
Pension contributions to money purchase schemes 1,975 -

During the period under review, the highest paid director exercised share options.

5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
Depreciation - owned assets 13,748 6,521
Development costs amortisation 20,455 -
Foreign exchange differences 433,438 (34 )

6. AUDITORS' REMUNERATION
Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
Fees payable to the company's auditors for the audit of the company's
financial statements

9,500

-

7. EXCEPTIONAL ITEMS
Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
Cost of share option exercise (2,202,117 ) -

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

8. TAXATION

Analysis of the tax (credit)/charge
The tax (credit)/charge on the profit for the period was as follows:
Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
Current tax:
UK corporation tax (45,869 ) 66,819
Prior year taxation (34,452 ) -
Total current tax (80,321 ) 66,819

Deferred tax 801 4,264
Tax on profit (79,520 ) 71,083

UK corporation tax has been charged at 19% (2020 - 19%).

Reconciliation of total tax (credit)/charge included in profit and loss
The tax assessed for the period is lower than the standard rate of corporation tax in the UK. The difference is explained below:

Period
1.7.20
to Year Ended
31.12.21 30.6.20
£    £   
Profit before tax 365,635 1,101,019
Profit multiplied by the standard rate of corporation tax in the UK of 19%
(2020 - 19%)

69,471

209,194

Effects of:
Expenses not deductible for tax purposes 2,142 1,215
Utilisation of tax losses - (26,870 )
Adjustments to tax charge in respect of previous periods (34,452 ) -
Difference between share option exercise fair value and tax value 49,220 -
Revenue deduction on capitalised R&D costs (49,205 ) -
R&D claim (120,260 ) (116,382 )
Other - 3,926
Non-allowable amortisation 3,886 -
Super deduction allowances claimed (322 ) -
Total tax (credit)/charge (79,520 ) 71,083

Tax effects relating to effects of other comprehensive income

1.7.20 to 31.12.21
Gross Tax Net
£    £    £   
Reserves transfer 2,202,117 - 2,202,117

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

9. INTANGIBLE FIXED ASSETS
Development
costs
£   
COST
At 1 July 2020 477,420
Additions 258,969
At 31 December 2021 736,389
AMORTISATION
Amortisation for period 20,455
At 31 December 2021 20,455
NET BOOK VALUE
At 31 December 2021 715,934
At 30 June 2020 477,420

10. TANGIBLE FIXED ASSETS
Computer
equipment
£   
COST
At 1 July 2020 43,539
Additions 17,968
At 31 December 2021 61,507
DEPRECIATION
At 1 July 2020 21,094
Charge for period 13,748
At 31 December 2021 34,842
NET BOOK VALUE
At 31 December 2021 26,665
At 30 June 2020 22,445

11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2021 2020
£    £   
Trade debtors 14,731,853 6,170,773
Amounts owed by group undertakings 2,903,985 -
Other debtors 13,100 8,100
Tax 80,321 -
VAT 122,842 51,421
Prepayments 50,157 45,878
17,902,258 6,276,172

12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2021 2020
£    £   
Trade creditors 16,846,063 4,495,591
Tax - 66,819
Social security and other taxes 54,248 32,626
Other creditors 281 2,450,120
Accrued expenses 314,899 279,093
17,215,491 7,324,249

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

13. FINANCIAL INSTRUMENTS

All financial assets and liabilities in the financial statements are measured at amortised cost.

14. PROVISIONS FOR LIABILITIES
2021 2020
£    £   
Deferred tax 5,065 4,264

Deferred
tax
£   
Balance at 1 July 2020 4,264
Charge to Income Statement during period 801
Balance at 31 December 2021 5,065

Both the deferred tax liability and the deferred tax charge relate to accelerated capital allowances.

15. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:


Number

Class
Nominal
value:

31.12.21(£

)


30.6.20(£

)
1,528,000 Ordinary £0.001 1,764 841
NIL A Ordinary £0.001 - 609
NIL B Ordinary £0.001 - 78
1,764 1,528

During the period under review, the following share allotments were made:



Number


Class

Aggregate nominal
value (£


)
Premium
received per
share (£


)

Aggregate premium
received (£


)
236,122 Ordinary 236 0.499 117,825

In addition, during the period under review the A Ordinary and B Ordinary share capital was re-designated as Ordinary share capital.

The Ordinary shares carry full voting rights and full capital participation on sale or winding up of the company. The dividend rights on the Ordinary shares are at the directors discretion. There are no restrictions or specific preferences on the Ordinary shares.

16. RESERVES
Share
Retained Share option
earnings premium reserve Totals
£    £    £    £   

At 1 July 2020 930,895 1,060,992 - 1,991,887
Profit for the period 445,155 445,155
Exercise of share options - - 2,202,117 2,202,117
Issue of shares - 117,825 - 117,825
Reserves transfer 2,202,117 - (2,202,117 ) -
At 31 December 2021 3,578,167 1,178,817 - 4,756,984

GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021

17. PENSION COMMITMENTS

The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. For the period under review, the pension cost charge represents contributions payable by the company to the fund and amounted to £36,255 (2020 £14,693).

No contributions were outstanding to the pension scheme at the period end (2020 £0).

18. SHARE-BASED PAYMENT TRANSACTIONS

The company had two share option schemes in place during the period under review - one approved and one unapproved. For each scheme, the options were to expire 10 years from the date of grant if not previously exercised, they were to be cash settled, had an exercise price of £0.50 per share and various vesting conditions applied to the options.

At the beginning of the period under review, 189,282 options had vested out of a total of 291,344 available.

During the period, 46,840 options were granted and 236,122 options were exercised at the exercise price of £0.50. This was settled in full by cash payment.

Relating to the exercise of the share options, £2,202,117 was recognised as an expense in the income statement in the period.

No options were outstanding or exercisable at the end of the period.

19. ULTIMATE PARENT COMPANY

The ultimate parent company, Azerion Holding B.V, Schiphol- Rijk, Beechavenue 182, Netherlands