Company registration number:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPANY INFORMATION
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONTENTS
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Director presents his strategic report for the year ended 31 December 2023.
During the year, the Company continued to expand its development and enhancements of its OpenBet gambling platform along with other associated products. The Company offers service based, computerised software solutions for the gambling industry, which are capable of providing scalability and flexibility of the most demanding operators and therefore it is pivotal that investment in the Company’s offering is a priority to ensure it remains best in class.
The Company envisages these product enhancements to support new offerings over several years, complimenting existing products and aiding the continued shift in the Company’s business model to a more service-based offering. The Director regards continued investment in new products as a prerequisite for medium and long-term success.
The Company's key financial and other performance indicators during the period were as follows:
Page 1
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The principal risk facing the Company is that its technologies will not be retained by its customers and any new technologies it introduces will not be accepted.
The Company does not operate as a bookmaker. However, the Company’s products are betting applications and services supplied to bookmakers. Its customers are therefore subject to regulation in the jurisdictions in which they offer their services. This may involve the independent certification of the Company’s hardware and software. The current regulations, which differ from jurisdiction to jurisdiction, and any future changes in such regulations, may affect the Company’s ability to sell technologies and services related to betting. The Company continues to proactively monitor regulations by jurisdiction to ensure limited impact on its services. Other risks impacting the Company relate to cash flow risk, credit risk and liquidity risk. Cash flow risk The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. When necessary, the Company uses foreign exchange forward contracts and interest rate swap contracts to hedge these exposures. Interest bearing assets and liabilities are held at fixed rate to ensure certainty of cash flows. Credit risk The Company’s principal financial assets are bank balances and cash and trade and other receivables. The Company’s credit risk is primarily attributable to its trade receivables. The amounts presented in the Statement of Financial Position are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies. The Company has a limited number of key customers which management has identified as a potential credit risk. The Company also provides services to the rest of the OpenBet group which would financially support the Company. Therefore, management have no issues with the Company’s ability to continue as a going concern. Liquidity risk In order to maintain liquidity to ensure sufficient funds are available for ongoing operations and future developments, the Company utilises available resources provided within the Company. Effective cashflow forecasting allows for the provision of Company resources for any significant cash outflows that could not be covered by the Company individually.
Page 2
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Section 172 of the Companies Act 2006 requires directors to have regard to the following in performing their duties, and as part of the process are required to consider, where relevant:
∙the likely consequences of any decisions in the long term;
∙the interests of the company’s employees;
∙the need to foster the company’s business relationships with suppliers, customers and others:
∙the impact of the company’s operations on the community and the environment;
∙the reputation for a high standard of business conduct; and
∙the need to act fairly as between members of the company.
The Director of the Company has acted in the way they consider in good faith and would be most likely promote the success of the Company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172 (1) (a-f) of the Act) in the decisions taken in the year ended 31 December 2023.
In discharging their duty to promote the interests of the Company under section 172 of the Companies Act 2006, the Director of the Company has regard to a number of factors and stakeholders interests. These are described below. The Company supplies software, hardware and related services to the betting industry. It has continued to provide enhancements to the OpenBet platform and products that will deliver a service based, computerised software solution to the most demanding operators. The duties of the Director in promoting the interests of the Company are aligned with those of the Company as a whole. Identification of, and engagement with, stakeholder groups The Company recognises the importance of maintaining strong relationships with its stakeholders in order to create sustainable long term value, and the Board encourages active dialogue and transparency with its stakeholder groups, particularly its customers and suppliers. The Company and the wider group has identified three main stakeholders across the Group as a whole, which are relevant to the proper discharge of the duty of the Director of relevant group companies under section 172(1) to promote the success of the Company. These are:
∙The Company's customers;
∙The Company's employees and the wider community; and
∙The Company's lenders and owners.
Long term consequences of business decisions and maintaining reputation for high standards of business conduct
The Company operates in a highly regulated sector, which is characterised by a large number of buyers and sellers and in an environment where maintaining a reputation for high standards is deemed to be critical. A number of the Company’s business relationships can last upwards of ten years, accordingly, consideration of long term consequences are an inherent part of the Company’s decision making processes. As a company which is held by ultimate parent and controlling party Endeavor Group Holdings Inc., the Director considers that the interests of the Company and its ultimate owners are aligned in seeking sustainable value creation over the longer term promoting long term strategic decision making. Impact of the company’s operations on the community and the environment The Company and wider group operate in the gambling sector and as such believe in customers using its products responsibly. The Company and wider group support communities through a variety of programmes, including employee volunteer activities to ensure a proportion of business resources is allocated to improving the community in which it operates. The Company and wider group aims to build environment sustainability into each business process and function. By making sustainability an integral part of the Company's business operations, value is created for stakeholders at the same time as protecting the environment.
Page 3
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Need to act fairly as between members of the company
The Company was wholly owned by OpenBet Holdco Limited (incorporated in Jersey) and ultimately owned by the ultimate parent and controlling party, Endeavor Group Holdings Inc., at the balance sheet date. All decisions made by the Director are fully aligned with the interests of these members.
This report was approved by the board and signed on its behalf.
Page 4
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Director presents his report and the financial statements for the year ended 31 December 2023.
The Director who served during the year was:
The Director is responsible for preparing the Strategic report, the Director's 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 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 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, the Director is required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The loss for the year, after taxation, amounted to £707 thousand (2022: loss £6,054 thousand).
The Director has not recommended a final dividend payment in respect of the financial year ended 31 December 2023 (2022: £110,815 thousand distributable reserves as part of the reorganisation of the Company).
The Company made no charitable donations during the year (2022: £Nil).
Page 5
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company has net current liabilities, excluding deferred tax, of £95,253 thousand (2022: net current liabilities £92,801 thousand). Excluding amounts due to/from related parties the Company has net current assets of £12,028 thousand (2022: £17,634 thousand). The Company has made a loss of £707 thousand in the year (2022: loss of £6,054 thousand) and have continued to generate losses post year end. The Director has reviewed the forecast and actual results of the Company's activities for a period of at least 12 months from the signing of the Statement of Financial Position. Taking into account market conditions, the Director is satisfied that the Company has adequate resources to continue in business for the foreseeable future.
The 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 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. The Director has also received confirmation of support from the Ultimate Parent, that if required, they will settle any amounts due between group members for a period up until the Company is sold or up to 12 months from the date of the approval of the financial statements.
The Company has chosen in accordance with Companies Act 2006, s.414C(11) to set out the company's strategic reporting information required by Large and Medium-sized Companies and Group (Accounts and Reports) Regulations 2008 Sch. 7 to be contained in the "Review of the business" and "Principal risks and uncertainties" sections of the Strategic report.
The Companies Act 2006 (Strategic Report and Directors' Report) Regulation 2018 requires OpenBet to disclose annual UK energy consumption and Greenhouse Gas (GHG) emissions from SECR regulated sources.
Reported energy and GHG emissions data is compliant with SECR requirements and has been calculated in accordance with the GHG Protocol and SECR guidelines. Energy and GHG emissions are reported from buildings and transport where operational control is held; this includes electricity, gaseous fuels such as natural gas, and business travel in company owned and grey fleet vehicles. The table below details the SECR-regulated energy and GHG emission sources from the current and previous reporting periods.
Page 6
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 7
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company intends to continue operating in the supply of software and services for betting products, enhancing our partnerships with operators and maximising the benefits of any market opportunities that arise.
There have been no significant events affecting the Company since the year end that would require adjustment of these financial statements.
Page 8
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The auditor, Menzies LLP, was appointed as auditor for OpenBet Technologies 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.
This report was approved by the board and signed on its behalf.
Page 9
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENBET TECHNOLOGIES LIMITED
We have audited the financial statements of OpenBet Technologies 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 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 Auditors' 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.
Page 10
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENBET TECHNOLOGIES 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 Director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Director's 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 Director's report.
Page 11
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENBET TECHNOLOGIES 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; and
∙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.
Page 12
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENBET TECHNOLOGIES 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
Page 13
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 14
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 on
The notes on pages 17 to 29 form part of these financial statements.
Page 15
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 16
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
OpenBet Technologies 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 Building 6, Chiswick Park, 566 Chiswick High Road, London, England, W4 5HR.
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 the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers
∙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
∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member
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 is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent entity established by law of an EEA State and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006.
Page 17
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Company has net current liabilities, excluding deferred tax, of £95,253 thousand (2022: net current liabilities £92,801 thousand). Excluding amounts due to/from related parties the Company has net current assets of £12,028 thousand (2022: £17,634 thousand). The Company has made a loss of £707 thousand in the year (2022: loss of £6,054 thousand) and have continued to generate losses post year end. The Director has reviewed the forecast and actual results of the Company's activities for a period of at least 12 months from the signing of the Statement of Financial Position. Taking into account market conditions, the Director is satisfied that the Company has adequate resources to continue in business for the foreseeable future.
The Director has also received confirmation of support from the Ultimate Parent, that if required, they will settle any amounts due between group members for a period up until the Company is sold or up to 12 months from the date of the approval of the financial statements. Contracts can contain multiple obligations, including the following: (i) Implementation of customised software solution and the associated software licence. ii) Support services. iii) Professional development services. Implementation of Software and Software Licence 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 actual 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 Support and Maintenance is generally contracted on an annual basis. Support services are considered stand-ready obligations, therefore control transfers and revenue is recognised over time as the service is delivered. Software Development Software Development provides customers with enhanced and/or specific functionality in addition to the core licensed products. These services generally relate to post-go live development, and control transfers and revenue is recognised over time as services are rendered. Where the Company is contracted on a time and materials' basis and no material performance obligations still exist, revenue is recognised as the incremental services are delivered. In the case of fixed price contracts, revenue is recognised over time as services are provided, where services rendered cannot be reliably estimated, revenue is deferred until such time as they can.
Page 18
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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 incremental services are delivered. In the case of fixed price contracts, revenue is recognised over time as services are provided, where services rendered cannot be reliably estimated; revenue is deferred until such time as they can. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for good and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes. Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract. The stage of completion takes into account the relevant performance obligations which have been transferred to the customer, this has been determined as follows: Interest income is recognised when it is probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.
Functional and presentation currency
Transactions and balances
Page 19
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Page 20
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Page 21
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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. Critical judgements in applying the Company's accounting policies The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the Director has made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in financial statements. Revenue recognition The Director is required to use his judgement in determining the timing of certain performance obligations. An assessment as to whether revenue is recognised over either time or a point in time needs to be made for all new contracts. Where revenue is recognised at a point in time, judgement as to which point in time the performance obligation is transferred to the customer must be made. 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 £163 thousand (2022 restated - £163 thousand) 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.
Page 22
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Director was paid by Don Best Sports Corporation, a fellow company within the Endeavor Group Holdings Inc group.
It is not possible to determine the element of his remuneration which relates solely to his services as Director of the Company.
Page 23
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 24
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.Taxation (continued)
There were no factors that may affect futures tax charges.
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 is 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.
Page 25
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 26
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 27
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share premium account
Capital contribution reserve
During the year, the group conducted a comprehensive review of all contracts, which revealed that one contract's license revenue had not been recognised upfront at the contracts inception, as per the revenue recognition policy (note 2.4). This resulted in an adjustment that impacts the brought forward retained earnings and accrued income balances by £3,500 thousand.
Page 28
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company is a wholly owned subsidiary of OpenBet Holdco Limited which is incorporated in Jersey. OpenBet Holdco 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 the largest and smallest group required to prepare group financial statements. Copies of the financial statements of Endeavor Group Holdings Inc. can be obtained from: https://investor.endeavorco .com/financials /annual-reports
Page 29
|