Company registration number:
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COMPANY INFORMATION
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CONTENTS
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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.
The directors who served during the year were:
The directors are responsible for preparing 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 101 ‘Reduced Disclosure Framework’. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make 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 Company has net current assets, excluding deferred tax, of £7,413,790 (2022: £7,342,643). Excluding amounts due to/from related parties, the Company has net current assets of £609,435 (2022: £2,631,553). The Company made a loss after tax of £726,310 (2022: loss £172,895). The Directors have reviewed the forecast and actuals of the Company's activity for a period of at least 12 months from the signing of the Statement of Financial Position. Taking into account the market conditions. the Directors are satisfied that the Company has adequate resources to continue in business for the foreseeable future.
The OpenBet group performs regular cashflow forecasting and as a result is confident the group has adequate cash reserves for the Company to continue as a going concern. Consequently, the financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should the company not be unable to continue as a going concern. The OpenBet group has performed extensive forecasting activity across all its operations and have planned for downturn scenarios through the next 12 months as part of their going concern forecasting. Whilst any downturn would have an impact on profitability, in these scenarios the group remains able to provide this financial support to its subsidiaries.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The auditor, Menzies LLP, was appointed as auditor for OpenBet Retail Limited on 2 July 2024 in accordance with section 485 of the Companies Act 2006.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to the members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENBET RETAIL LIMITED
We have audited the financial statements of OpenBet Retail 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 101 ‘Reduced Disclosure Framework’ (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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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENBET RETAIL LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Directors' report has 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 Directors' report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENBET RETAIL 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 Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including:
∙The Companies Act 2006;
∙Financial Reporting Standard 101; and
∙General Data Protection Regulations.
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. We understood how the Company are complying with those legal and regulatory frameworks by making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of board minutes. The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area. We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
∙Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud;
∙Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
∙Challenging assumptions and judgements made by management in its significant accounting estimates; and
∙Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
∙Posting of journals to the accounting software which are of a non-routine nature in terms of timing and amount;
∙Timing of revenue recognition;
∙The use of management override of controls to manipulate results.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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 Auditors' report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENBET RETAIL LIMITED (CONTINUED)
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 Auditor
1st Floor
Midas House
62 Goldsworth Road
Surrey
GU21 6LQ
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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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 10 to 20 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
OpenBet Retail Limited (the "Company") is a private company limited by shares incorporated, in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of its registered office is stated on the company information page.
The principal activity of the Company is disclosed in the Director's Report.
2.Accounting policies
The preparation of financial statements in compliance with FRS 101 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 under FRS 101:
∙the requirements of IFRS 7 Financial Instruments: Disclosures
∙the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement
∙the requirements of IAS 7 Statement of Cash Flows
∙the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
This information is included in the consolidated financial statements of Endeavor Group Holdings Inc as at 31 December 2023 and these financial statements may be obtained from:
https://investor.endeavorco .com/financials /annual-reports/.
The Company has net current assets, excluding deferred tax, of £7,413,790 (2022: £7,342,643). Excluding amounts due to/from related parties, the Company has net current assets of £609,435 (2022: £2,631,553). The Company made a loss after tax of £726,310 (2022: loss £172,895). The Directors have reviewed the forecast and actuals of the Company's activity for a period of at least 12 months from the signing of the Statement of Financial Position. Taking into account the market conditions. the Directors are satisfied that the Company has adequate resources to continue in business for the foreseeable future.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Determination of performance obligations and timing of transfer of control vary based on the nature of the contract. Contracts can contain multiple promises, including the following: (i) implementation of customised software solution and the associated software licence ii) Support services iii) professional development services. Software License Revenue Recognition Licence fees are recognised once all the relevant acceptance criteria have been met and the performance obligations are deemed to have transferred to the customer. Licences are generally provided up-front on the outset of the contract are therefore recognised as revenue immediately. Where licence fees are for a specific term, or the Company is required to provide further functionality over a specific period, revenue is recognised ratably over the time the functionality is provided to the customer. In some instances, the company earns licence revenue calculated as a percentage of the customer's incremental revenues earned from deploying the Company's applications (a revenue-share arrangement). Revenue in such instances is recognised ratably in proportion to the total expected incremental revenues. In instances where the Company has obligations to pay a third party under a revenue-share arrangement, consideration is given as to whether to show the revenue and costs gross or net. In making this assessment, the Company considers whether, in substance, it is acting as principal or as agent in the relationship. Support and Maintenance and Hardware Rental Support and Maintenance is generally contracted on an annual basis and revenue is recognised rateably over the period to which it relates. Contracts for Hardware Rental are usually multi-year contracts and revenue is recognised on a straight line basis over the term of the contract. Software Development Software Development provides customers with enhanced and/or specific functionality in addition to the core licensed products. Where material performance obligations still exist, revenue is deferred until those obligations are satisfied. Where the Company is contracted on a "time and materials' basis and no material performance obligations still exist, revenue is recognised as the service is delivered. In the case of fixed price contracts, where the Company is able to make reliable estimates of the costs to complete and no material performance obligations still exist, revenue is recognised according to the percentage of completion as at each balance sheet date, calculated by reference to costs incurred and expected to be incurred. Where costs to complete cannot be reliably estimated, revenue is deferred until such time as they can. Professional Services Professional Services (e.g. consulting, project management and training) are generally provided alongside Software Development. Where the Company is contracted on a 'time and materials' basis and no material performance obligations still exist, revenue is recognised as the service is delivered. In the case of fixed price contracts, where the Company is able to make reliable estimates of the costs to complete and no material performance obligations still exist, revenue is recognised according to the percentage of completion as at each balance sheet date, calculated by reference to costs incurred and expected to be incurred. Where costs to complete cannot be reliably estimated, revenue is deferred until such time as they can. Installation and Hardware Sales Revenue in respect of Installation and Hardware Sales is recognised on installation and delivery.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The tax expense for the year comprises current tax and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income 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 by the statement of financial position date. 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 the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet 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 based on tax laws and rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.
Functional and presentation currency
Transactions and balances
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable:
∙Any lease payments made at or before the commencement date net of any lease incentives received;
∙Any initial direct costs incurred;
∙Impairment in respect of onerous leases, and;
∙Dilapidation provisions to be incurred for restoring the site or asset back to its original position.
The Company elects not to recognise right of use assets and corresponding liabilities for short-term leases with terms of twelve months or less, and low value leases. Lease payments on these assets are expensed on a straight-line basis to the profit and loss account. Lease payments are formed of either fixed payments as stipulated within the lease agreement or variable lease payments as stipulated by the lease agreement if dependent on an index or a rate. Variable lease payments that do not depend on an index or rate are expensed in the period in which they are incurred directly to the profit and loss account.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Under IAS12, the recognition of deferred tax asset is contingent upon the availability of future taxable profits against which the temporary timing differences can be utilised. In making the assessment, the directors have determined that although there is a positive outlook, there is uncertainty around the timing and realisation of future profits. As a result, the Directors have decided not to recognise a deferred tax asset of £1,984,725 (2022 - £1,193,618) in the financial statements for the year ended 31 December 2023. The judgement will be reviewed on an ongoing basis, and if future taxable profits become more probable, the recognition of the deferred tax asset will be reconsidered in accordance with IAS12 requirements.
Analysis of revenue by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
There were no factors that may affect future tax charges.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.Taxation (continued)
Global minimum top-up tax:
In December 2022, the Organization for Economic Co-operation and Development ("OECD") proposed Global Anti-Base Erosion Rules, which provides for changes to numerous long-standing tax principles including the adoption of a global minimum tax rate of 15% for multinational enterprises ("GloBE rules"). The UK has enacted legislation to adopt GloBe rules which will come into effect from 1 January 2024, therefore there is no current tax impact for the year ended 31 December 2023. The Company not expecting to pay material top-up taxes in the future and the management is not currently aware of any circumstances under which this might change. The Company has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company is a wholly owned subsidiary of OpenBet Technologies Limited which is incorporated in the United Kingdom and registered in England and Wales. OpenBet Technologies Limited is also the immediate parent undertaking for the Company.
The ultimate parent and controlling party of the Company is Endeavor Group Holdings Inc, which is also the smallest and largest group required to prepare group consolidated financial statements. Copies of the financial statements of Endeavor Group Holdings Inc. can be obtained from: https://investor.endeavorco .com/financials /annual-reports
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