REGISTERED NUMBER: |
GENBA DIGITAL LIMITED |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE PERIOD 1 JULY 2020 TO 31 DECEMBER 2021 |
REGISTERED NUMBER: |
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: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
(Statutory Auditor) |
Sovereign House |
12 Warwick Street |
Coventry |
CV5 6ET |
BANKERS: |
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: |
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 |
Other changes in directors holding office are as follows: |
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: |
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. |
for and on behalf of |
(Statutory Auditor) |
Sovereign House |
12 Warwick Street |
Coventry |
CV5 6ET |
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 |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
OPERATING PROFIT | 5 |
Cost of share option exercise | 7 |
PROFIT BEFORE TAXATION |
Tax on profit | 8 | ( |
) |
PROFIT FOR THE FINANCIAL PERIOD |
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 |
OTHER COMPREHENSIVE INCOME |
Reserves transfer |
Income tax relating to other comprehensive income |
OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF INCOME TAX |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
GENBA DIGITAL LIMITED (REGISTERED NUMBER: 09491005) |
BALANCE SHEET |
31 DECEMBER 2021 |
2021 | 2020 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 |
Tangible assets | 10 |
CURRENT ASSETS |
Debtors | 11 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 12 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 14 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 15 |
Share premium | 16 |
Retained earnings | 16 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
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 | ( |
) |
Changes in equity |
Total comprehensive income | - | - |
Balance at 30 June 2020 |
Changes in equity |
Issue of share capital | - | - |
Total comprehensive income | - | - |
Balance at 31 December 2021 |
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 |
Tax paid | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of intangible fixed assets | ( |
) | ( |
) |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
Loans to group companies | (2,903,985 | ) | - |
Share issue |
Net cash from financing activities | ( |
) |
Increase in cash and cash equivalents |
Cash and cash equivalents at beginning of period |
2 |
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 |
Depreciation charges |
Share option exercise | 2,202,117 | - |
2,601,955 | 1,107,540 |
Increase in trade and other debtors | ( |
) | ( |
) |
Increase in trade and other creditors |
Cash generated from operations |
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 | 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 |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
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 |
Computer equipment | - |
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 |
£ | £ |
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 |
Europe |
Rest of the World | 10,427,434 | 6,066,223 |
4. | EMPLOYEES AND DIRECTORS |
Period |
1.7.20 |
to | Year Ended |
31.12.21 | 30.6.20 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
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 |
Period |
1.7.20 |
to | Year Ended |
31.12.21 | 30.6.20 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
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 |
Information regarding the highest paid director is as follows: |
Period |
1.7.20 |
to | Year Ended |
31.12.21 | 30.6.20 |
£ | £ |
Emoluments etc |
Pension contributions to money purchase schemes |
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 |
Development costs amortisation |
Foreign exchange differences | ( |
) |
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 | ( |
) |
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 | ( |
) |
Prior year taxation | (34,452 | ) | - |
Total current tax | ( |
) |
Deferred tax |
Tax on profit | ( |
) |
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 |
Profit multiplied by the standard rate of corporation tax in the UK of (2020 - |
Effects of: |
Expenses not deductible for tax purposes |
Utilisation of tax losses | ( |
) |
Adjustments to tax charge in respect of previous periods | ( |
) |
Difference between share option exercise fair value and tax value |
Revenue deduction on capitalised R&D costs | ( |
) |
R&D claim | ( |
) | ( |
) |
Other | - | 3,926 |
Non-allowable amortisation |
Super deduction allowances claimed | ( |
) |
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 |
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 |
Additions |
At 31 December 2021 |
AMORTISATION |
Amortisation for period |
At 31 December 2021 |
NET BOOK VALUE |
At 31 December 2021 |
At 30 June 2020 |
10. | TANGIBLE FIXED ASSETS |
Computer |
equipment |
£ |
COST |
At 1 July 2020 |
Additions |
At 31 December 2021 |
DEPRECIATION |
At 1 July 2020 |
Charge for period |
At 31 December 2021 |
NET BOOK VALUE |
At 31 December 2021 |
At 30 June 2020 |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Tax |
VAT |
Prepayments |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Trade creditors |
Tax |
Social security and other taxes |
Other creditors |
Accrued expenses |
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 |
Charge to Income Statement during period |
Balance at 31 December 2021 |
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 | 1,991,887 |
Profit for the period |
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 | 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 |