Company registration number 10192522 (England and Wales)
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
COMPANY INFORMATION
Director
P S Fischer
(Appointed 14 June 2021)
Secretary
Bird & Bird Company Secretaries Limited
Company number
10192522
Registered office
12 New Fetter Lane
London
EC4A 1JP
Auditor
Harwood Hutton Limited
22 Wycombe End
Beaconsfield
Buckinghamshire
HP9 1NB
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
CONTENTS
Page
Director's report
1 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 30
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The director presents his annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company is provision of football digital media content from member football clubs to millions of consumers across the world. The members comprise 95 of the world's leading clubs. The content is provided through a global network of publishers. Content is targeted to UK and non-UK audiences.
Fair review of the business
The year ended 31 December 2021 was a transition year for the company. During the year, the integration of operations, systems, and people to the OneFootball group was achieved. In addition, the bases to make the company's business a key product of the OneFootball GmbH business model was initiated.
OneFootball UK Ltd (formerly Dugout Limited) became the “Owned and Distributed” network of OneFootball GmbH through its embed player business, which allowed the distribution of football content and advertising inventory to around 100 million users worldwide. Throughout the year ended 31 December 2021, OneFootball UK Ltd (formerly Dugout Limited) and OneFootball GmbH teams kicked-off the work to product integrations and team coordination between the different business areas of OneFootball group and to enhance direct-to-consumer offerings.
Despite the second year of difficult economic conditions caused by COVID-19, the business showed strong resilience and preformed robustly. The directors are not aware, at the date of this report, of any likely major changes in the company’s activities in the next year.
Results and dividends
The results for the year are set out on page 7. The loss for the year is £6,412,114 (2020 - £11,508,765).
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
E Richardson
(Resigned 29 November 2021)
D C McCourt
(Resigned 29 November 2021)
D L S Dransfield
(Resigned 29 November 2021)
W M Hogan IV
(Resigned 1 March 2022)
F H McCourt Jr
(Resigned 29 November 2021)
S Mennerich
(Resigned 29 November 2021)
R P Stopford
(Resigned 29 November 2021)
G Ricci
(Resigned 29 November 2021)
A J Clark
(Resigned 29 November 2021)
G J Twelvetree
(Resigned 29 November 2021)
S G S Sain-Ley-Berry-Gray
(Resigned 29 November 2021)
L Von Cranach
(Resigned 4 September 2023)
P S Fischer
(Appointed 14 June 2021)
F H Koch
(Appointed 29 November 2021 and resigned 25 August 2023)
J O Meiner
(Appointed 29 November 2021 and resigned 4 September 2023)
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Going concern
In fiscal years 2022 and 2023 there were significant changes to the scope of business operations of OneFootball GmbH (the "Parent") and its subsidiary entities (the "Group") after experiencing a challenging financial situation in 2023.
In July 2023 three members of the Parent's management board (including the managing director) left the Group; the global workforce was reduced by more than 50%; and a new managing director was installed at the Parent to lead two previous members of the previous management in the new management team. The business division focused on the production and marketing of digital video moments was wound down and the Group's focus on growth was replaced with one on reaching profitability.
The Group is now focussed on the media platform business which is operated by the company and the Parent. In parallel to this commercial refocus the Parent's management team secured a series of new loans from shareholders and key stakeholders, as well as amendments to existing loans, such new and existing loans together totalling EUR 43m.
These actions helped secure the Group's cash flow and liquidity position. The business plan for the Group was reviewed and adjusted to reflect this focus on the media platform business, with more conservative revenue forecasts than in previous business plans. The revenue growth was reduced to previous period growth rates.
As with every revenue forecast, there are inherent risks to the forecast such as macro-economic situations in the key markets, regulatory risks, technology disruptions, content costs, cybersecurity threats or competition developments.
Having reviewed the revised business plan and noting in particular the cost savings that will result from the Group's reduced workforce, the Group's focus on cost rationalisation and the new financing arrangements, the director of the company has a reasonable expectation that the company as well as the Parent have adequate resources to continue their operations for a minimum of twelve months from the date of approval of these financial statements. Any cash flow shortages of the company will be provided by the Parent. For this reason, the directors have continued to adopt the going concern basis in preparing these financial statements.
Post reporting date events
Subsequent to the balance sheet date, on 28 April 2022, the company changed its name from Dugout Limited to OneFootball UK Ltd.
Future developments
In 2022, OneFootball UK Ltd (formerly Dugout Limited) and the wider OneFootball group continues to work on a global platform which offers an immersive fan experience including the offering to buy and trade digital video moments (DVMs), which is enabled through blockchain technology. From early September 2022, fans can buy exclusive DVMs of Italian Serie A.
Auditor
The auditor, Harwood Hutton Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. Under company law the director must not approve the financial statements unless he is 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, International Accounting Standard 1 requires that directors:
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
make an assessment of the company's ability to continue as a going concern.
The director is 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. He is 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 of disclosure to auditor
Each director in office at the date of approval of this annual report confirms that:
so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and
the director has taken all the steps that he / she ought to have taken as a director in order to make himself / herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.
Small companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
P S Fischer
Director
29 September 2023
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
- 4 -
Opinion
We have audited the financial statements of OneFootball UK Ltd (formerly Dugout Limited) (the 'company') for the year ended 31 December 2021 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards.
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 loss for the year then ended;
have been properly prepared in accordance with UK adopted international accounting standards; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 Auditor's 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
We draw attention to note 1.2 in the financial statements which indicate that the company will continue to be dependent upon funding from its parent company OneFootball GmbH for at least 12 months from the date of approval of these financial statements. The parent company has undertaken to provide continued financial support to the company, as required to meet its debts and obligations when they fall due. The parent company also pledged not to demand repayment of the amounts due by the company until the company is in a financial position to do so. In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:
the information given in the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the director's report has been prepared in accordance with applicable legal requirements.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
- 5 -
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 director's report. We have nothing to report in respect of the following matters in relation to which 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 director's remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the director was not entitled to take advantage of the small companies exemption from the requirement to prepare a strategic report.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines is 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's 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 an auditor's report 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, and anti-bribery legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
understanding the design of the company’s remuneration policies.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
- 6 -
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 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 the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Margaret El Khalidi (Senior Statutory Auditor)
For and on behalf of Harwood Hutton Limited
29 September 2023
Chartered Accountants
Statutory Auditor
22 Wycombe End
Beaconsfield
Buckinghamshire
HP9 1NB
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
2021
2020
Notes
£
£
Revenue
4
4,728,255
2,577,091
Cost of sales
(5,904,346)
(4,722,362)
Gross loss
(1,176,091)
(2,145,271)
Other operating income
4
174,192
Administrative expenses
(6,633,284)
(9,457,784)
Exceptional items
5
(512,327)
1,996,815
Operating loss
6
(8,321,702)
(9,432,048)
Investment revenues
383
Finance costs
10
(716,486)
(43,224)
Other gains and losses
12
(2,023,189)
Loss before taxation
(9,038,188)
(11,498,078)
Income tax expense
11
(7,656)
(10,687)
Loss and total comprehensive income for the year
(9,045,844)
(11,508,765)
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2021
31 December 2021
- 8 -
31 December
31 December
1 January
2021
2020
2020
Notes
£
£
£
Non-current assets
Property, plant and equipment
13
58,735
53,906
95,671
Investments
14
22,126
22,127
15,279
80,861
76,033
110,950
Current assets
Trade and other receivables
17
831,222
2,739,119
2,927,738
Cash and cash equivalents
321,978
564,032
1,352,879
1,153,200
3,303,151
4,280,617
Current liabilities
Trade and other payables
19
4,624,181
5,006,159
5,480,822
Borrowings
20
22,278,372
13,542,096
2,500,000
Deferred revenue
24
2,742
814,747
205,800
26,905,295
19,363,002
8,186,622
Net current liabilities
(25,752,095)
(16,059,851)
(3,906,005)
Total assets less current liabilities
(25,671,234)
(15,983,818)
(3,795,055)
Non-current liabilities
Borrowings
20
7,858,428
8,500,000
25,450,000
Net liabilities
(33,529,662)
(24,483,818)
(29,245,055)
Equity
Called up share capital
26
201
201
163
Share premium account
27
22,973,034
22,973,034
7,393,070
Equity reserve
690,000
690,000
-
Retained earnings
(57,192,897)
(48,147,053)
(36,638,288)
Total equity
(33,529,662)
(24,483,818)
(29,245,055)
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 29 September 2023 and are signed on its behalf by:
P S Fischer
Director
Company registration number 10192522
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
Share capital
Share premium account
Equity reserve
Retained earnings
Total
Notes
£
£
£
£
£
Balance at 1 January 2020
163
7,393,070
(36,638,288)
(29,245,055)
Year ended 31 December 2020:
Loss and total comprehensive income for the year
-
-
-
(11,508,765)
(11,508,765)
Transactions with owners in their capacity as owners:
Issue of share capital
26
2
-
-
2
Conversion of loan notes
27
36
15,579,964
-
-
15,580,000
Other movements
28
-
-
690,000
-
690,000
Balance at 31 December 2020
201
22,973,034
690,000
(48,147,053)
(24,483,818)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
-
(9,045,844)
(9,045,844)
Balance at 31 December 2021
201
22,973,034
690,000
(57,192,897)
(33,529,662)
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 10 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
32
(7,256,873)
(8,902,976)
Interest paid
(716,486)
(43,224)
Income taxes paid
(7,656)
(10,687)
Net cash outflow from operating activities
(7,981,015)
(8,956,887)
Investing activities
Purchase of property, plant and equipment
(62,405)
(28,400)
Purchase of subsidiaries
(2,030,037)
Interest received
383
Net cash used in investing activities
(62,405)
(2,058,054)
Financing activities
Proceeds from issue of shares
15,580,002
Proceeds from borrowings
16,125,200
7,633,005
Repayment of borrowings
(8,030,495)
(12,850,909)
Net cash generated from financing activities
8,094,705
10,362,098
Net increase/(decrease) in cash and cash equivalents
51,285
(652,843)
Cash and cash equivalents at beginning of year
564,032
1,352,879
Effect of foreign exchange rates
(293,339)
(136,004)
Cash and cash equivalents at end of year
321,978
564,032
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
1
Accounting policies
Company information
OneFootball UK Ltd (formerly Dugout Limited) is a private company limited by shares incorporated in England and Wales. The registered office is 12 New Fetter Lane, London, EC4A 1JP. The company's principal activities and nature of its operations are disclosed in the director's report.
1.1
Accounting convention
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated. For all periods up to and including the year ended 31 December 2020, the company prepared its financial statements in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS 102 The Financial Reporting Standard in the UK and Republic of Ireland (UK GAAP). These financial statements for the year ended 31 December 2021 are the first the company has prepared in accordance with UK-adopted international accounting standards.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements presented are separate financial statements and these financial statements present information about the company as an individual entity and not about its group.
The company is a wholly owned subsidiary of OneFootball GmbH, a company incorporated in Germany. The results of OneFootball UK Ltd (formerly Dugout Limited) are included in OneFootball GmbH's consolidated financial statements, copies of which may be obtained from Germany's Company Register (Bundesanzeiger.de).
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 12 -
1.2
Going concern
In fiscal years 2022 and 2023 there were significant changes to the scope of business operations of OneFootball GmbH (the "trueParent") and its subsidiary entities (the "Group") after experiencing a challenging financial situation in 2023.
In July 2023 three members of the Parent's management board (including the managing director) left the Group; the global workforce was reduced by more than 50%; and a new managing director was installed at the Parent to lead two previous members of the previous management in the new management team. The business division focused on the production and marketing of digital video moments was wound down and the Group's focus on growth was replaced with one on reaching profitability.
The Group is now focussed on the media platform business which is operated by the company and the Parent. In parallel to this commercial refocus the Parent's management team secured a series of new loans from shareholders and key stakeholders, as well as amendments to existing loans, such new and existing loans together totalling EUR 43m.
These actions helped secure the Group's cash flow and liquidity position. The business plan for the Group was reviewed and adjusted to reflect this focus on the media platform business, with more conservative revenue forecasts than in previous business plans. The revenue growth was reduced to previous period growth rates.
As with every revenue forecast, there are inherent risks to the forecast such as macro-economic situations in the key markets, regulatory risks, technology disruptions, content costs, cybersecurity threats or competition developments.
Having reviewed the revised business plan and noting in particular the cost savings that will result from the Group's reduced workforce, the Group's focus on cost rationalisation and the new financing arrangements, the director of the company has a reasonable expectation that the company as well as the Parent have adequate resources to continue their operations for a minimum of twelve months from the date of approval of these financial statements. Any cash flow shortages of the company will be provided by the Parent. For this reason, the directors have continued to adopt the going concern basis in preparing these financial statements.
1.3
Revenue
Revenue is measured at the amount of consideration that the company expects to receive from a contract with a customer. This does not apply to amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.
The company recognises revenue from the following major sources:
Creative & media services, boost & direct revenue
Programmatic advertising revenue
Shared revenue with parent
Direct revenue from parent
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:
Creative & media services, boost & direct revenue
Sales under this classification consist of direct business with brands/clubs. Creative and media services, boost and direct revenues are contractually regulated and include performance obligations, which include a clear commitment to provide services and to meet the customer's requirements for the services. The consideration varies from contract to contract, but typically it is a fixed fee that is met and recognised over time or at a specific point in time (depending on the contract). Once the individual performance obligations within the contract have been identified along with the determination of the transaction price, revenue is recognised for each performance obligation accordingly. Typically, a client may request the company to deliver a specific number of video impressions, such as 1 million impressions in Europe. If these impressions are all delivered in a calendar month, the company will charge 100% of the revenue or, alternatively, prorated based on the delivery of the impressions.
The invoices that the company issues to its customers depend on the terms of the contract; in some cases an advance payment may be requested, but in most cases the invoice will be issued after the project is completed with payment typically received within 30-60 days.
Programmatic advertising revenue
Programmatic advertising revenue includes revenue related to non-search web/mobile adverts bought or sold through a programmatic channel, including revenue generated from both publishers and ad tech companies.
One of the largest programmatic providers is Google. Google provides a monthly breakdown of revenue generated. There can be an adjustment in the middle of the month compared to the previous month, whereby either additional income can be added or a deduction can be made. Once the Google reports are complete at the end of the month, Google will transfer the funds directly to the company's bank account within 30 days.
Shared revenue with parent
Shared revenue with parent is where the company's parent, OneFootball GmbH, earns revenue directly from football clubs and brands for creative and media services, direct revenue and boost deals on the same basis as described above for the company and thereafter shares the revenue with the company if the company's publisher network is required to fulfil the contract. OneFootball GmbH will bill the customer in full and the company will in turn bill OneFootball GmbH for its share of the revenue with the invoice being payable within 30 days.
Direct revenue from parent
Direct revenue from parent comprises revenue arising under the terms of a deal entered into with OneFootball GmbH by the company before being acquired by OneFootball GmbH. Revenue of $1M USD which was anticipated to be receivable by the company under a revenue share deal with a third party was replaced by a contract for €1M Euros with OneFootball GmbH which has now been completed in the current year and is not expected to be repeated.
1.4
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Office equipment
5 Year straight line basis
Computers
3 Year straight line basis
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
1.5
Non-current investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument. For trade receivables, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
1.8
Financial liabilities
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Compound instruments and embedded derivatives
The company was acquired by its parent undertaking, OneFootball GmbH, on 10 December 2020. Pursuant to the business combination agreement, holders of the company's convertible loan notes swapped their convertible loans in the company to loans and/or shares in OneFootball GmbH. Accordingly, as at 31 December 2020 and 2021, there were no convertible loan notes outstanding. Upon issue of the convertible loan notes, it was determined that the equity components of the convertible loan notes were not material and no amounts were included in equity to recognise the conversion option.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority (see Note 3).
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the company recognises as expenses the related costs for which the grants are intended to compensate.
In response to COVID-19, the UK Government announced a number of initiatives for businesses to assist with cashflow. The company received financial assistance during the year ended 31 December 2020 under the Coronavirus Job Retention Scheme and the amount received was recognised in the statement of comprehensive income within other operating income.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 17 -
2
Adoption of new and revised standards and changes in accounting policies
These financial statements, for the year ended 31 December 2021, are the first the company has prepared in accordance with UK-adopted international accounting standards. For periods up to and including the year ended 31 December 2020, the company prepared its financial statements in accordance with UK Generally Accepted Accounting Practice (UK GAAP). Accordingly, the company has prepared financial statements that comply with UK-adopted international accounting standards applicable as at 31 December 2021 together with the comparative period data as described in the summary of significant accounting policies. In preparing the financial statements, no adjustments were required to be made to the company's opening statement of financial position prepared under UK GAAP as at 1 January 2020, the company’s date of transition to UK-adopted international accounting standards.
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective:
Amendments to IAS 1
Presentation of Financial Statements
IFRS 17
Insurance Contracts
3
Critical accounting estimates and judgements
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Key sources of estimation uncertainty
Taxes
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. The company has £50,202,000 (31 December 2020: £43,931,000, 1 January 2020: £35,775,000) of tax losses carried forward. These losses do not expire, and may not be used to offset taxable income of fellow group undertakings. The company neither has any taxable temporary difference nor any tax planning opportunities available that could partly support the recognition of these losses as a deferred tax asset. On this basis, the company has determined that it cannot recognise a deferred tax asset on the tax losses carried forward. If the company was able to recognise a deferred tax asset, loss for the year ended 31 December 2021 and equity as at the balance sheet date would have reduced/increased by £12,551,000, respectively. Further details are disclosed in Note 11.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
4
Revenue
2021
2020
£
£
Revenue analysed by class of business
Creative & media services, boost & direct revenue
1,096,782
1,906,101
Programmatic advertising revenue
1,413,304
531,514
Shared revenue with parent
1,448,421
-
Direct revenue from parent
769,748
139,476
4,728,255
2,577,091
2021
2020
£
£
Revenue analysed by geographical market
United Kingdom
70,345
168,940
Rest of Europe
3,086,209
925,156
Rest of the World
1,571,701
1,482,995
4,728,255
2,577,091
2021
2020
£
£
Other revenue
Government grants received
-
174,192
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
5
Exceptional items
2021
2020
£
£
Income
Exceptional item - Loan interest reversal
-
1,996,815
Exceptional item - Unrealised currency revaluation on intercompany loans
1,479,831
-
Exceptional item - Unrealised currency revaluation on borrowings
641,572
-
2,121,403
1,996,815
Expenditure
Exceptional item - Amounts owed by Subsidiary undertaking written off
2,633,730
-
Net exceptional income/(expenditure)
(512,327)
1,996,815
Included in exceptional items during the year ended 31 December 2020, is the reversal of accrued interest in the amount of £1,996,815, which following negotiations with the loan provider was no longer payable.
Included in exceptional items during the year ended 31 December 2021, is the unrealised currency revaluation gain in the amount of £1,479,831 on amounts due to the parent company.
Included in exceptional items during the year ended 31 December 2021, is the unrealised currency revaluation gain in the amount of £641,572 on Euro-denominated non-current other loans.
Included in exceptional items during the year ended 31 December 2021, is the amount owed by a subsidiary company OneFootball Singapore Pte. Ltd of £2,633,730, which is no longer recoverable following the decision to place the subsidiary in liquidation in 2023.
6
Operating loss
2021
2020
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange losses
293,339
136,004
Government grants
-
(174,192)
Depreciation of property, plant and equipment
56,503
70,165
Loss on disposal of property, plant and equipment
1,073
-
7
Auditor's remuneration
Fees payable to the company's auditor for the audit of the financial statements of the company were £37,500 (2020 - £56,200).
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
8
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Total
43
45
The aggregate remuneration of employees which is included in adminstrative expenses comprised:
2021
2020
£
£
Wages and salaries
2,869,182
3,928,484
Social security costs
394,411
275,570
Pension costs
137,789
74,924
3,401,382
4,278,978
9
Key management personnel compensation
2021
2020
£
£
Short-term employee benefits
480,000
485,622
Company pension contributions to defined contribution schemes
25,313
12,610
505,313
498,232
10
Finance costs
2021
2020
£
£
Other interest payable
716,486
43,224
Interest is payable at a rate of 5% per annum (2020 - 5% per annum) on the other loans of £7,858,428 (2020 - £14,409,091; 1 January 2020 - £18,500,000). During the year ended 31 December 2020, interest payable on the loan was waived (see Notes 5 & 20).
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
11
Income tax expense
2021
2020
£
£
Current tax
Foreign tax on income for the year
7,656
10,687
The charge for the year can be reconciled to the loss per the income statement as follows:
2021
2020
£
£
Loss before taxation
(9,038,188)
(11,498,078)
Expected tax credit based on a corporation tax rate of 19.00% (2020: 19.00%)
(1,717,256)
(2,184,635)
Effect of expenses not deductible in determining taxable profit
30,196
617,608
Unutilised tax losses carried forward
4,698,631
1,555,763
Change in unrecognised deferred tax assets
902
3,329
Substantively enacted future changes in tax rates
(3,009,391)
Enhanced capital allowances in excess of depreciation
(3,082)
Other differences
7,656
18,622
Taxation charge for the year
7,656
10,687
12
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2021
2020
£
£
In respect of:
Investments in subsidiaries
-
2,023,189
Recognised in:
Other gains and losses
-
2,023,189
During the year ended 31 December 2020, the total investment cost in Dugout Mena (London) Limited of £2,023,189 was fully impaired (see Note 14).
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
13
Property, plant and equipment
Office equipment
Computers
Total
£
£
£
Cost
At 1 January 2020
32,629
272,240
304,869
Additions
28,400
28,400
At 31 December 2020
32,629
300,640
333,269
Additions
62,405
62,405
Disposals
(2,146)
(2,146)
At 31 December 2021
32,629
360,899
393,528
Accumulated depreciation and impairment
At 1 January 2020
11,222
197,976
209,198
Charge for the year
6,526
63,639
70,165
At 31 December 2020
17,748
261,615
279,363
Charge for the year
6,500
50,003
56,503
Eliminated on disposal
(1,073)
(1,073)
At 31 December 2021
24,248
310,545
334,793
Carrying amount
At 31 December 2021
8,381
50,354
58,735
At 31 December 2020
14,881
39,025
53,906
At 1 January 2020
21,407
74,264
95,671
14
Investments
1 January
2021
2020
2020
£
£
£
Investments in subsidiaries
22,126
22,127
15,279
The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
14
Investments
(Continued)
- 23 -
Movements in non-current investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2020
15,279
Additions
2,030,037
At 31 December 2020 & 31 December 2021
2,045,316
Impairment
At 1 January 2020
-
Impairment losses
(2,023,189)
At 31 December 2020
(2,023,189)
Impairment losses
(1)
At 31 December 2021
(2,023,190)
Carrying amount
At 31 December 2021
22,126
At 31 December 2020
22,127
At 1 January 2020
15,279
During the year ended 31 December 2020, the company acquired 25% of the share capital in Dugout Mena (London) Limited ("Dugout Mena") for £2,010,350, thereby increasing its shareholding in Dugout Mena from 75% to 100% (see Note 15). The total investment cost in Dugout Mena of £2,023,189 was fully impaired in the year ended 31 December 2020 (see Note 12).
During the year ended 31 December 2020, the company acquired 100% of the share capital in Dugout Spor Medyasi Içerik Hizmetleri Limited (see Note 15).
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
15
Subsidiaries
Details of the company's subsidiaries at 31 December 2021 are as follows:
Name of undertaking
Principal place of business
Principal activities
Class of
% Held
shares held
Direct
Dugout South East Asia (London) Limited
England & Wales
Dormant
Ordinary
100.00
OneFootball Singapore Pte. Ltd
Singapore
Information technology service activities
Ordinary
79.00
Dugout Mena (London) Limited
England & Wales
Dormant
Ordinary
100.00
Dugout Egypt Company LLC
Egypt
Information technology service activities
Ordinary
100.00
Dugout Spor Medyasi Içerik Hizmetleri Limited
Turkey
Information technology service activities
Ordinary
100.00
Investments in subsidiaries are carried at cost less provision for impairment.
Dugout South East Asia (London) Limited and Dugout Mena (London) Limited were dissolved on 1 February 2022 and 5 April 2022, respectively.
The percentage equity interest held in each subsidiary remained constant during the two years ended 31 December 2021 except for: the interest held in Dugout Mena (London) Limited which was increased from 75% to 100% during the year ended 31 December 2020 and the interest held in Dugout Spor Medyasi Içerik Hizmetleri Limited, 100% of which was acquired during the year ended 31 December 2020 (see Note 14).
In 2023, following management plans to restructure the groups operations, members of the company have taken decision to liquidate the remaining subsidiary companies, namely, Dugout Egypt Company LLC, Dugout Spor Medyasi Icerik Hizmetleri Ltd and OneFootball Singapore Pte. Ltd.
16
Credit risk
Cash deposits and financial transactions give rise to credit risk in the event that counter parties fail to perform under the contract. The Company transacts only with third parties that are expected to be creditworthy and manages its operations to avoid any excessive concentration of counterparty risk. In addition, receivable balances are monitored on an ongoing basis and, as a consequence of these controls, the probability of material loss is considered to be at an acceptable level.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the company's maximum exposure to credit risk.
The company does not hold any collateral or other credit enhancements to cover this credit risk.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 25 -
17
Trade and other receivables
1 January
2021
2020
2020
£
£
£
Trade receivables
390,172
97,444
416,557
VAT recoverable
97,838
236,191
221,981
Amounts owed by subsidiary undertakings
2,005,018
1,236,018
Other receivables
123,684
150,909
169,370
Prepayments
219,528
249,557
883,812
831,222
2,739,119
2,927,738
18
Trade receivables - credit risk
Fair value of trade receivables
The director considers that the carrying amount of trade and other receivables is approximately equal to their fair value.
No significant receivable balances are impaired at the reporting end date.
19
Trade and other payables
1 January
2021
2020
2020
£
£
£
Trade payables
651,201
2,165,210
2,720,855
Amounts owed to subsidiary undertakings
22,035
34,874
15,188
Accruals
3,807,573
1,761,046
2,714,241
Social security and other taxation
111,140
Other payables
32,232
1,045,029
30,538
4,624,181
5,006,159
5,480,822
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 40 days. For most suppliers no interest is charged on amounts payable. The company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.
The directors consider that the carrying amount of trade payables approximates to their fair value.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 26 -
20
Borrowings
Current
Non-current
1 January
1 January
2021
2020
2020
2021
2020
2020
£
£
£
£
£
£
Borrowings held at amortised cost:
Other loans
-
5,909,091
2,500,000
7,858,428
8,500,000
25,450,000
Loans from parent undertaking
22,278,372
7,633,005
-
-
-
-
Current
Other loans as at 1 January 2020 comprised a loan repayable on demand which was settled in March 2020. Other loans as at 31 December 2020 of £5,909,091 is the current portion of a loan totalling £14,409,091 (see Non-current below). Amounts due are unsecured and interest is payable at a rate of 5% per annum (2020 - 5% per annum).
Non-current
Other loans of £25,450,000 as at 1 January 2020 comprised convertible loans in the amount of £6,950,000 which were converted into the company's shares in 2020 and a loan of £18,500,000 which was partially repaid in 2020 and thereafter converted into a Euro-denominated loan totalling £14,409,091 (Euros 15,850,000) of which 6,500,000 Euros has been repaid in the year ended 31 December 2021 and £7,858,428 (Euros 9,350,000) is repayable on 10 December 2023. Amounts due are unsecured and interest is payable at a rate of 5% per annum (2020 - 5% per annum).
21
Fair value of financial liabilities
The director considers that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 27 -
22
Liquidity risk
The following table details the remaining contractual maturity for the company's financial liabilities with agreed repayment periods. The contractual maturity is based on the earliest date on which the company may be required to pay.
Less than 1 month
3 months to 1 year
1 – 5 years
Total
£
£
£
£
At 31 December 2020
Other loans
-
5,909,091
8,500,000
14,409,091
Loans from parent undertaking
7,633,005
-
-
7,633,005
7,633,005
5,909,091
8,500,000
22,042,096
At 31 December 2021
Other loans
-
-
7,858,428
7,858,428
Loans from parent undertaking
22,278,372
-
-
22,278,372
22,278,372
-
7,858,428
30,136,800
Liquidity risk management
Responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company's funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Any cash flow shortages will be provided by its immediate & ultimate parent undertaking OneFootball GmbH.
Although the loan from parent undertaking is repayable on demand, the company has received confirmation from OneFootball GmbH that the loan will not be called for repayment until the company has sufficient funds (see Note 1.2).
23
Market risk
Market risk management
The company's non-current other loans of Euros 9,350,000 (GBP 7,858,428), which is fully repayable on 10 December 2023, and loans from the parent undertaking (OneFootball GmbH) are denominated in Euros and give rise to exchange rate risk. The company's future income will predominantly be denominated in Euros and the directors consider that there is a natural hedge which mitigates this exchange rate risk.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 28 -
24
Deferred revenue
1 January
2021
2020
2020
£
£
Arising from direct revenue from parent
2,742
814,747
205,800
All deferred revenues are expected to be settled within 12 months from the reporting date.
25
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
137,789
74,924
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
26
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of 1p each
-
7,000
-
70
Ordinary B shares of 1p each
-
7,207
-
72
Ordinary C shares of 1p each
-
1,400
-
14
Ordinary D shares of 1p each
-
4,478
-
45
Ordinary shares of 1p each
20,085
-
201
-
20,085
20,085
201
201
On 29 November 2021, 7,000 Ordinary A shares of £0.01 each, 7,207 Ordinary B shares of £0.01 each, 1,400 Ordinary C shares of £0.01 each and 4,478 Ordinary D shares of £0.01 each were re-classified and re-designated as 20,085 Ordinary shares of £0.01 each.
27
Share premium account
1 January
2021
2020
2020
£
£
£
At the beginning of the year
22,973,034
7,393,070
7,393,070
On conversion of loan notes
15,579,964
At the end of the year
22,973,034
22,973,034
7,393,070
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 29 -
28
Equity reserve
1 January
2021
2020
2020
£
£
£
At the beginning of the year
690,000
-
Other movements
-
690,000
-
At the end of the year
690,000
690,000
-
During the year ended 31 December 2020, other loans due to shareholders totalling £690,000 were waived and were subsequently recognised as a non distributable equity reserve.
29
Capital risk management
The company is not subject to any externally imposed capital requirements.
30
Related party transactions
During the year the company entered into the following transactions with related parties:
Sales in the year:
2021
2020
£
£
Parent company
2,218,170
139,476
The following amounts were outstanding at the reporting end date:
2021
2020
Amounts due to related parties
£
£
Parent company
22,278,372
7,633,005
Subsidiaries
22,035
22,035
22,300,407
7,655,040
Amounts due to the parent company are unsecured and repayable on demand. During the year interest was accrued at a rate of 0.5% per annum (2020 - 0.5% per annum).
Amounts due to subsidiaries are unsecured, interest free and repayable on demand.
ONEFOOTBALL UK LTD (FORMERLY DUGOUT LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
30
Related party transactions
(Continued)
- 30 -
The following amounts were outstanding at the reporting end date:
2021
2020
Amounts due from related parties
£
£
Subsidiaries
2,005,018
OneFootball GmbH has indemnified OneFootball UK Ltd (formerly Dugout Limited) against any possible loss that it might suffer in relation to the intercompany loan with Dugout Singapore PTE Ltd, a subsidiary undertaking of OneFootball UK Ltd (formerly Dugout Limited). As at 31 December 2021, the value of the intercompany loan owed to OneFootball UK Ltd (formerly Dugout Limited) by Dugout Singapore PTE Ltd amounted to £2,633,730 and the balance has been written off as no longer recoverable, following the management decision to place the subsidiary company into liquidation in 2023.
31
Controlling party
The immediate & ultimate parent undertaking of OneFootball UK Ltd (formerly Dugout Limited) is OneFootball GmbH, a company incorporated in Germany. Its registered office is Greifswalder Str. 212, 10405 Berlin, Germany.
The ultimate controlling party of OneFootball UK Ltd (formerly Dugout Limited) is OneFootball GmbH. No singular individual has control of OneFootball GmbH.
The largest and smallest group of undertakings for which group financial statements have been drawn up including OneFootball UK Ltd (formerly Dugout Limited) is that headed by OneFootball GmbH whose financial statements are publicly available, copies of which may be obtained from Germany's Company Register (Bundesanzeiger.de).
32
Cash absorbed by operations
2021
2020
£
£
Loss for the year before income tax
(9,038,188)
(11,498,078)
Adjustments for:
Finance costs
716,486
43,224
Investment income
(383)
Loss on disposal of property, plant and equipment
1,073
-
Depreciation and impairment of property, plant and equipment
56,503
70,165
Foreign exchange gains on cash equivalents
293,339
136,004
Other gains and losses
-
2,023,189
Movements in working capital:
Decrease in trade and other receivables
1,907,897
188,619
Decrease in trade and other payables
(381,978)
(474,663)
(Decrease)/increase in deferred revenue outstanding
(812,005)
608,947
Cash absorbed by operations
(7,256,873)
(8,902,976)
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