Company Registration Number
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RAKUTEN MARKETING EUROPE LIMITED
COMPANY INFORMATION
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RAKUTEN MARKETING EUROPE LIMITED
CONTENTS
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RAKUTEN MARKETING EUROPE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their strategic report together with the audited financial statements for the year ended 31 December 2023.
Rakuten Marketing Europe Limited (RME) trades in managed digital marketing services, using owned and sub-contracted digital marketing technologies.
The principal client base is UK, France, and Germany based advertisers that trade online. RME also partners with a broad section of the digital publisher community through which the company creates tailored media plans through both manual and automated media campaigns. RME is a performance-oriented business, meaning the company earns revenue when media buying activities generate revenue for, or meet ROI objectives of, our paying clients.
RME experienced a decrease in revenue of £10,376,229 against the prior year. In 2023, RME transferred its Media revenue stream to Rakuten Advertising France which was the primary cause of the revenue decline. The core affiliate marketing business continues to see solid revenue in 2023.
RME has continued to realise new revenue streams from ongoing investment in technology and people, and forecasts moderate revenue growth over the next three financial years. Rakuten Inc’s sizeable user base and commitment to growing digital ad revenue across the group means that RME is well placed to maintain the levels of growth it has seen over recent years. Staffing With teams based in London and Brighton, RME continues to invest in people and their skills to ensure the company delivers a measurable ROI for our clients and partners. RME has invested significantly in benefits and incentive plans for staff over the past few years, and the company notes an improved environment, in terms of both staff culture, morale, and productivity.
The key performance indicators which are used to monitor the progress of the company include, but are not limited to:
• Revenue growth • Gross profit (£ and %) • Operating profit/loss • Efficiency metrics (revenue per headcount, operating income per headcount) Credit risk RME's principal credit risk is the collection of accounts receivable from clients. The company has strict collection procedures in place to ensure the risk of overdue receivables are minimal, using a third-party collections agency when necessary.
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RAKUTEN MARKETING EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Market risk
The markets which RME operates in are growing in competition and complexity, therefore RME continues to invest in new products, processes and routes to retain clients and pursue new business. Our alignment with sister companies in the UK and overseas, as well as the Rakuten Marketing global footprint continues to provide us with firm competitive security, as more clients seek international support and expertise. This has been a key point of differentiation that RME continues to build upon. Business risk The company continues to evaluate and manage potential risks faced by the business including: • Changes in the legal environment including data privacy and compliance • Reliance on technology in an ever-changing cyber landscape • Competition on securing placements with publishers • Seasonality of online retail sales placing significant emphasis on performance in fourth quarter • Operational risks arising from damage due to severe weather, cyberattack, supplier dependency, etc.
The company is in a net asset position of £17.6 (2022 - £23.6m), with unrestricted cash balances at year end of £14.3m (2022 - £32.6m) and amounts owed to group undertakings of £21.4m (2022 - £30.0m). The company made a loss after tax for the year of £6m (2022 - loss £7.4m).
A key risk to the company is the requirement to repay the intercompany balance due to Rakuten Marketing LLC as well as the continuation of ongoing group financial support. The directors have prepared financial statement projections for the next 12 months from the date of approval of the financial statements. In particular, the directors have considered the main markets covered by the business, which are relatively diverse. The business is not overly dependent on any single client. The company is also not reliant on any particular supplier. While the directors assess that the going concern assumptions remains appropriate, given the continued loss making position of the company, continued support from the parent company, Rakuten Marketing International LLC, is required. The company meets its day to day working capital requirements through operating cash flows and continued financial support from the wider group. At year end, £21.4m (2022 - £30.0m) was due to group undertakings, notably its parent company, Rakuten Marketing International LLC. It is noted that Rakuten Marketing International LLC is part of the ultimate group, headed by Rakuten Group, Inc. which is a publicly-traded entity on the Nikkei exchange (Ticker: RKUNY). The company has received written confirmation from Rakuten Marketing International LLC that repayment of intercompany balances due to the Parent Company, as noted above, will not be sought for at least 12 months from the date of approval of these accounts. In addition, Rakuten Marketing International LLC has provided a binding written undertaking to provide the company with any additional funds required to enable the company to continue to meet its obligations as they fall due and to carry on its business without a significant curtailment of operations during the same period.
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RAKUTEN MARKETING EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Based on this review and appropriate enquiries made with the ultimate parent undertaking, the directors believe the company will have sufficient resources for a period of at least 12 months from the date of signing these financial statements to meet its liabilities as they come due and, as such, the financial statements are prepared on the going concern basis.
This report was approved by the board and signed on its behalf.
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RAKUTEN MARKETING EUROPE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
A review of the business and its principal risks and uncertainties is set out in the strategic report on pages 1 to 3 of these financial statements.
The loss for the year, after taxation, amounted to £5,988,700 (2022 - £7,369,355).
The directors do not recommend the payment of a dividend (2022 - Nil).
The directors who served during the year were:
No significant change in the principal activities of the company is expected in the foreseeable future.
The auditors, Armstrong Watson Audit Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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RAKUTEN MARKETING EUROPE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors are responsible for preparing the Strategic Report, the Directors' Report 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgments 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 to 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.
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RAKUTEN MARKETING EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RAKUTEN MARKETING EUROPE LIMITED
We have audited the financial statements of Rakuten Marketing Europe Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, 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).
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 United Kingdom, including the Financial Reporting Council'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.
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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are 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.
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RAKUTEN MARKETING EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RAKUTEN MARKETING EUROPE LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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 Directors' Report.
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RAKUTEN MARKETING EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RAKUTEN MARKETING EUROPE LIMITED (CONTINUED)
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 Auditors' 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:
- the engagement partner ensured that the engagement team collectively had the appropriate competence. capabilities and knowledge of the Company 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 review of appropriate industry knowledge. Key laws and regulations we identified during the audit were the UK Companies Act 2006 and UK tax legislation; - we assessed the extent of compliance with the laws and regulations identified above by making enquiries of management; 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. To address the risk of fraud through management bias and override of controls, we: - performed analytical procedures as a risk assessment tool to identify any unusual or unexpected relationships; - tested journal entries recorded on the Company's finance system to identify unusual transactions that may indicate override of controls: - reviewed key judgements and estimates for any evidence of management bias: and - reviewed the application of accounting policies with focus on those with heightened estimation uncertainty. 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; and - enquiring of management to identify actual and potential litigation and claims.
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
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RAKUTEN MARKETING EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RAKUTEN MARKETING EUROPE LIMITED (CONTINUED)
Auditors' 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 Auditors' 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.
for and on behalf of
Chartered Accountants & Statutory Auditors
Manchester
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RAKUTEN MARKETING EUROPE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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RAKUTEN MARKETING EUROPE LIMITED
REGISTERED NUMBER: 05751526
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 30 form part of these financial statements.
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RAKUTEN MARKETING EUROPE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Rakuten Marketing Europe Limited is a private company limited by shares and incorporated in England and Wales under the Companies Act 2006. The address of the registered office is given on the company information page and the nature of the company's operations, and its principal activities are set out in the strategic report.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Rakuten Inc. as at 31 December 2023 and these financial statements may be obtained from http://global.rakuten .com/corp /investors.
The company's business activities and the factors likely to affect its future development, performance and position are set out in the strategic report on pages 1 to 3. The company is in a net asset position of £17.6m (2022 - £23.6m), with unrestricted cash balances at the year-end of £14.3m (2022 - 32.6m) and amounts owed to group undertakings of £21.4m (2022 - £30.0m). The company made a loss after tax for the year of £6m (2022 - loss £7.4m).
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The key risk to the company is therefore any requirement to repay the intercompany balance due to Rakuten Marketing LLC as well as the continuation of ongoing group financial support.
The directors have prepared financial statement projections for the next 12 months from the date of approval of the financial statements. In particular, the directors have considered the main markets covered by the business, which are relatively diverse the business is not overly dependent on any single client. The company is also not reliant on any particular supplier. While the directors assess that the going concern assumptions remains appropriate, given the continued loss making position of the company, continued support from the parent company, Rakuten Marketing International LLC, is required. The company had no external finance at the year end and meets its day to day working capital requirements through operating cash flows and continued financial support from the wider group. At year end £21.4m (2022 - £30.0m) was due to group undertakings, notably its parent company, Rakuten Marketing International LLC. It is noted that Rakuten Marketing International LLC is part of the ultimate group, headed by Rakuten Inc. The company has received written confirmation from Rakuten Marketing International LLC that repayment of intercompany balances due to the Parent Company, as noted above, will not be sought for at least 12 months from the date of approval of these accounts. In addition, Rakuten Marketing International LLC has provided a binding written undertaking to provide the company with any additional finance required to enable the company to continue to meet its obligations as they fall due and to carry on its business without a significant curtailment of operations during the same period. Based on this review and appropriate enquiries made with the ultimate parent undertaking, the directors believe the company will have sufficient resources for a period of at least 12 months from the date of signing these financial statements to meet its liabilities as they fall due and as such the financial statements are prepared on the going concern basis.
Functional and presentation currency
Transactions and balances
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Turnover is recognised to the extent that it is probable that the economic benefit will flow to the company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates and value added tax. Turnover is recognised when the service has been rendered.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
The depreciable amount of an intangible asset with a finite useful life is allocated on a systematic basis over its useful life. Amortisation begins when the asset is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the amortisation method for intangible assets with a finite useful life is reviewed each financial period end. If the expected useful life of the asset is different from previous estimates, the amortisation period is changed accordingly. Useful lives are typically amortised on the following basis: Development Costs 33% straight line / length of associated commercial contract.
Amortisation is charged to administrative expenses in the statement of comprehensive income.
Research expenditure is written off against profits in the year in which it is incurred. Development costs incurred on specific projects are capitalised when all the following conditions are satisfied: • completion of the intangible asset is technically feasible so that it will be available for use or sale; • the company intends to complete the intangible asset and use or sell it; • the company has the ability to use or sell the intangible asset; • the intangible asset will generate probable future economic benefits. Among other things, this requires that there is a market for the output from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset will be used in generating such benefits; • there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and • the expenditure attributable to the intangible asset during its development can be measured reliably. Development costs not meeting the criteria for capitalisation detailed above are expensed as incurred. All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years. Assets under the course of construction are capitalised at cost within the appropriate category as described above but are not amortised until completed and brought into use.
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
Assets under the course of construction are capitalised at cost within the appropriate category as described above but are not depreciated until completed and brought into use.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows. Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Cash is classified between restricted and unrestricted amounts. Cash that is restricted represents amounts held that are received from customers but are owed to affiliates as included within creditors. These amounts are managed internally by using separate bank accounts. Ultimately, all cash held is an asset for the entity.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
• Determine whether there are indicators of impairment of the company's intangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash generating unit, including the viability and expected future performance of that unit. During the year, such indicators highlighted impairment in the recoverable value of the company's intangible assets, and thus these assets have been fully impaired. • Determine whether these financial statements should be prepared under the going concern assumptions. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the company, including the continued support as provided by the intermediate parent company. Rakuten Marketing International LLC. See accounting policy 2.3 for further details. Other key sources of estimation uncertainty • Recoverability of trade debtors (see note 13) The recoverability of trade debtors is regularly reviewed in the light of available economic information specific to each debtor and specific provisions are recognised for balances considered to be irrecoverable. • Research and development expenditure is capitalised to intangible assets based upon staff time allocated to respective projects. Such staff time is recognised when it is deemed increased economic benefits are achieved by the company from the related projects.
The whole of the turnover is attributable to the principal activity of the company, in both years presented.
Analysis of turnover by country of destination:
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.Taxation (continued)
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.Taxation (continued)
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Called up share capital
Capital contribution reserve
Profit and loss account
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. The pension cost charge represents contributions payable by the company to the fund and amounted to £
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RAKUTEN MARKETING EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The company is a subsidiary of
The largest group in which results of the company are consolidated is that headed by
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