Registered number:
FOR THE YEAR ENDED 30 JUNE 2024
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REBELLION GROUP LTD
COMPANY INFORMATION
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REBELLION GROUP LTD
CONTENTS
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REBELLION GROUP LTD
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
The Group is engaged in the following principal activities:
• Games division – developing and publishing computer games; • Publishing division – publishing and distribution of comics, books and graphic novels; • Film & TV division – film and TV production, distribution and related services; • Consumer Products & new media division – integrates all digital channels to cross monetise our IP, products and services through social media, apps, e-commerce, licensing and membership subscriptions; and • Asset & Central divisions – provide support and ancillary services to the main divisions. The Group creates and manages its own Intellectual Property (“IP”) and content which is monetised and distributed to appropriate global audience through a multichannel digital distribution approach across all areas of the business. Financial overview The year to 30 June 2024 was successful for the Group with turnover of £63.3 million (2023: £56.1 million). There were no game releases in the year or the prior year, with two major releases anticipated for the year ended 30 June 2025. The majority of the Group’s turnover has been delivered by games released in prior years and revenue from a one-off game development partnership. The Group made a profit before tax of £10.0 million (2023: loss before tax of £2.0 million). As with the prior year, the Group has continued to invest in all areas of the business, including games, film production and the new consumer products and new media division. The Directors are satisfied with the performance in the year. Within the games division, two new major releases, Atomfall & Sniper Elite: Resistance are planned in the year ended 30 June 25. Atomfall is a brand-new IP game franchise of an action survival game. Sniper Elite: Resistance is a new instalment in the hugely popular Sniper Elite series. The Group are excited by both releases following positive feedback in the market. In the publishing division, the vast catalogue of owned IP in comics and books including Judge Dredd and 2000 AD, continue to grow and provide a steady level of turnover. In the year, the division has continued exploring new ways to introduce Rebellion IP to new audiences for our iconic IP in comics and books. The Film & TV division, whilst not having any new releases in the year, has several film and TV projects based on our IP in development with releases planned in future years. Co production of our Rogue Trooper animation film is progressing for release in the year ended 30 June 2026. The asset division continues to provide central services to support the continued growth of the business. On 1 August 2023, the Group acquired 100% of the equity Blackshore Inc for total potential consideration of $11 million payable in three instalments. The first instalment of $1m was paid on 1 August 2023. Blackshore Inc is a full-service talent management influencer marketing and new media content production company, who engage audiences and deliver meaningful marketing results for businesses. Blackshore is a key contributor in the new Consumer Products and New Media division in the Group and its service offerings will also enhance the Group's ability to market it's own IP via new media Financial performance The financial performance for the year has been analysed as follows:
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REBELLION GROUP LTD
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
The Group is exposed to a variety of financial risks which result from both its operating and investment activities. The board is responsible for coordinating the Group's risk management and focuses on actively securing the Group's short to medium term cash flows.
The Group does not actively engage in the trading of financial assets and has no financial derivatives. The most significant financial risks to which the Group is exposed are described below: Credit risk The Group's credit risk is primarily attributable to its trade debtors. The amounts presented in the balance sheet are net of any allowance for doubtful debts, estimated by the Directors. The Group normally deals with large highly rated international companies who have a strong record for the prompt payment of liabilities.
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REBELLION GROUP LTD
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
Cash flow risk
The Group seeks to manage risks to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Currency risk The Group seeks to balance the cash flows in the major currencies using an element of natural hedging with receipts and payments being matched in the same currency and therefore minimising the exposure to currency risk. The Group also monitors currency fluctuations and manages its GBP cash holding to always ensure it has sufficient funds to meet day to day trading requirements. Games industry risk As with any industry there are inherent risks. In the games industry and with games development specifically, the risks are often related to publisher control, technology advancement and quality of the product. The Group has sought to reduce these risks by successfully transitioning to a games publisher in its own right and has developed important relationships directly with the key external publishing partners. In terms of technology, the Group has continued to invest heavily in its own technology and games engine, continually pushing the boundaries of the technology and seeking technological advancements through its research & development activities. The use of its own games engine also mitigates any middleware risk and the reliance on third parties for its tools. Quality of product is extremely important to the Group. To reduce risks in this area the Group undertakes extensive quality assurance of its games and sets realistic release schedules to ensure games only reach the marketplace when ready. Publishing industry risk A competitive and mature industry with a long-standing tradition for physical products, the publishing industry's risks include the increase in print and distribution costs resulting in reduced margins. However, the Group has successfully developed digital products to complement print and believes that although the digital market will continue to grow, the demand for print will exist for the foreseeable future. The Group also sees growth opportunities with audio which provides another sales channel for its content. Film & TV industry risk The Film & TV market is a highly competitive, consumer-driven and rapidly changing environment, very much like the games industry. The Group plans to leverage its own technologies and many years’ experience of content creation and storytelling to challenge existing business models. One of the principal risks to the UK film industry would be the government changing or reducing the UK tax incentives. These same risks also apply to the film studio business where the demand for physical space and related services would be affected. The Group's diversified nature and investment in its own IPs should offset some of the inherent risks of the industry.
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REBELLION GROUP LTD
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
The Group’s banking facilities secured in July 2021 are subject to certain financial covenants. This funding was provided to refinance existing property mortgages, acquire a new property and provide new funding to support its investment programme. The Group continues to invest significantly in all key areas of the business on the back of its cash generation and this banking facility.
The level of revenue, cash generated by the Group, and compliance of financial covenants remains highly geared towards the timings of game releases. As at 30 June 2024 it has been more than two years since a major game release, with the next major game releases scheduled for early 2025. Whilst prior releases continue to perform well, during the financial year ended 30 June 2024, the Group obtained certain financial covenant waivers from the lender and amendments to the facilities. After the balance sheet date, the Group secured further amendments to the banking facilities to modify certain financial covenants in the agreement with the aim to further support the Group to achieve its strategic objectives prior to the next scheduled releases. The Group’s existing banking facilities are repayable by July 2025. The Group has prepared forecasts and projections, taking into account current cash resources and available funding to cover future expected trading, and sensitised the forecasts for reasonably possible changes in gaming volume. These forecasts support the conclusion of the Directors that the Group is a going concern. Furthermore, although the Group expects to renew its facilities prior to July 2025, in the improbable scenario where the facilities were not renewed, the Group would have various options available to ensure it could meet any liabilities as they fall due. This would include taking such actions as revenue optimisation via promotional activity, improvements to operational efficiency, sale of non-core assets, and other measures. These measures would enable the Group to have adequate resources to continue operational existence for the foreseeable future, for a period of not less than 12 months from the date of approval of these financial statements. The Group and Company, therefore, continues to adopt the going concern basis in preparing its financial statements.
The Directors acknowledge their duty under Section 172 of the Companies Act 2006 and consider that they have, both individually and together, acted in the way that, in good faith, would be most likely to promote the success of the Company and the Group for the benefits of its members as a whole. In doing so, they have had regard (amongst other matters) to:
The likely consequences of any decision in the long term The Group’s long-term strategic objectives, including progress made during the year and principal risks to these objectives, are stated above. The interests of the Group’s employees The board considers the Group’s employees to be primary stakeholders in the business under s172. The board is eager to retain its employees and show its appreciation by offering learning and educational opportunities to advance their careers. Employees are fundamental to the Group’s success in the current environment as well as our long-term strategic objectives. Rebellion is an equal opportunity employer, the only criteria for selection and promotion being the skills and aptitude of the individual person relevant to each role. The group is keen to provide worthwhile employment for disabled or medically restricted persons and where possible to make modifications to the work environment to enable employees to fulfil their role where their situation changes. The board also acknowledges that discrimination in any form is unacceptable, and equality of opportunity has been a long-standing characteristic of the Group’s employment practice and procedure. The Dignity at Work Policy sets out how employees are able to raise any concerns.
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REBELLION GROUP LTD
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
The way we engage with our shareholders The board considers that its controlling parties to be the key stakeholders of the Group and is focused on long-term value for their benefit. The Group shares its published results, monthly management accounts and various other key financial and non-financial reports to help the parent inform its group strategy and communicate with its partners. The need to foster the Group’s business relationships with suppliers, customers and others The board continues to build ongoing partnerships with key players in hardware, software and digital distribution in the games and creative industries worldwide. It also leverages relationships with suppliers through its centralised administrative function within the central division in order to achieve economies of scale and utilise the Group’s buying power. The impact of the Group’s operations on the community and the environment The Group operates with honesty and transparently. It seeks to minimise adverse impacts on the environment from its activities, while continuing to address health, safety and economic issues. The Streamlined Energy and Carbon Reporting (‘SECR’) report provides more details. The Group has complied with all applicable legislation and regulations. The desirability of the Group maintaining a reputation for high standards of business conduct The Group strives to behave in a responsible manner, operating to a high standard of business conduct and good corporate governance. The Group code of conduct, including its Anti-Corruption and Bribery Policy sets out the standards for our corporate and individual conduct. This includes a zero-tolerance approach to corruption, bribery and modern slavery and respect for all humans as individuals The Group provides guidance on how to report any non-compliance in the Group’s Whistleblowing Policy. The need to act fairly as between members of the Company The Company’s duty is to behave responsibly towards its shareholders and treat then fairly and equally, so that they will be able to benefit from the successful delivery of the Company’s strategic objectives. Other key performance indicators The Group considers the other key performance indicator as critical to the business to be the success of games released. This is monitored through sales activity and feedback from users including games critics. The Directors consider the Group to have a high success rate of releasing high quality games.
This report was approved by the board and signed on its behalf.
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REBELLION GROUP LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
The Directors present their report and the financial statements for the year ended 30 June 2024.
The Directors who served during the year were:
1. Games division - developing and publishing computer games; 2. Publishing division - publishing and distribution of comics, books and graphic novels; 3. Entertainment division - film and TV production, distribution and related services; 4. Consumer product division and new media division - integrates all digital channels to cross monetise our IP, products and services through social media, apps, e-commerce, licensing and membership subscriptions; and 5. Asset & central division - provide support and ancillary services to the three main divisions.
The profit for the year, after taxation, attributable to the owners of the Group, amounted to £16,177,385 (2023 - £2,987,703).
During the year ended 30 June 2024, the Group paid dividends of £Nil (2023: £2,041,284).
The trading results, profitability and cash generation for the period from 30 June 2024 is encouraging and in line with expectations. The Group will continue to invest and build upon its success as a leading games developer/publisher and its strengths in IP creation and development across all areas - games, media and entertainment.
We continue to provide our employees with the very best opportunities to develop and enjoy great careers at Rebellion. We will continue to invest in all areas of our employee experience including employee training, development, benefits and wellbeing. As a growing business we will also continue to identify and recruit the best talent in all areas of our business.
The Directors are mindful of their statutory duty to act in the way they each consider, in good faith, would be most likely to promote the success of the Company and of the Group for the benefits of its members as a whole, as set out in our s172(1) statement in the Strategic Report. A consideration of the Company and the Group's relationship with wider stakeholders, including suppliers and customers, is also disclosed in the same statement.
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REBELLION GROUP LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
The Group has applied ‘GHG Reporting Protocol – Corporate Standard’ methodology and used entergyfoit.uk energy and carbon reporting calculator to measure and report greenhouse gas emissions for the year ended 30 June 2024. This is the fifth year that reliable data has been recorded and will be used as the benchmark for future reporting. The Group is reporting as a large, unquoted group.
The operational control approach has been used to define the scope boundary, from which the Group has identified three scopes for reporting: • Scope 1 emissions consists of natural gas usage; • Scope 2 consists of electricity usage within the sites; • Scope 3 emissions are from staff mileage claims (grey fleet mileage). The table below shows the breakdown of consumption and carbon emissions, in kWh and tonnes of carbon dioxide equivalent (tCO2e) respectively, by scope and specific area:
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REBELLION GROUP LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
The Group is committed to sustainability and becoming energy efficient whilst reducing carbon footprint. Long term improvement plans are as follows:
• Replacing and upgraded lighting to LED alternatives at the two largest sites, with other sites to follow in the future; • Expanding the solar panel capacity within the group to generate additional levels of green electricity; • 12 electric car-charging points based across two offices, continue to be available for employees to utilise and Cycle to Work Scheme in place for all employees;; • Reduce petrol and diesel emissions via travel between office locations, through implementation of car sharing and alternative methods of working, utilising technology platforms such as video conferencing; and • Seeking greener electricity contracts as current contracts are renewed.
Energy Efficiency actions undertaken during reporting year:
• Further roll out of LED lights in largest buildings; • Installation of new air conditioning at largest property, which allowed energy intensive chillers associated with previous system to be de-commissioned; • Installation of new solar panels to head office; • Continued with use of greener electricity contracts and policies for reduced travel between sites and vehicle sharing/use of public transport where possible; and • Future plans include further rollout of solar to other properties within the group. The Group is committed to identifying and implementing appropriate ways of reducing energy consumption and carbon emissions from is business activities in 2024. The chosen emissions target is to reduce all intensity ratios across the business by 1% from 2024 to 2025. This target is based upon intensity ratios to improve performance, rather than allow for spurious improvements due to changes in operations during the COVID-19 pandemic. The table below shows carbon emissions in scope 1 & 2 with the intensity ratio, target and predicted kgCO2e, for the period 1 July 2023 to 30 June 2024. Intensity ratios are presented as tCO2e /547 number of employees.
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REBELLION GROUP LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
There have been no material events affecting the company since year end.
The auditor, James Cowper Kreston Audit, 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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REBELLION GROUP LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
The Directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements 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 Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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REBELLION GROUP LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF REBELLION GROUP LTD
We have audited the financial statements of Rebellion Group Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 June 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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 Group's or the parent 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.
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REBELLION GROUP LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF REBELLION GROUP LTD (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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REBELLION GROUP LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF REBELLION GROUP LTD (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 Auditor's Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
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. The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows: • Enquiry of management and those charged with governance around actual and potential litigation and claims; • Reviewing minutes of Group meetings of those charged with governance; • Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; • Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
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 Auditor's Report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants and Statutory Auditor
2 Chawley Park
Cumnor Hill
Oxfordshire
OX2 9GG
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REBELLION GROUP LTD
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
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REBELLION GROUP LTD
REGISTERED NUMBER: 11432845
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2024
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REBELLION GROUP LTD
REGISTERED NUMBER: 11432845
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 30 JUNE 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 24 to 57 form part of these financial statements.
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REBELLION GROUP LTD
REGISTERED NUMBER: 11432845
COMPANY BALANCE SHEET
AS AT 30 JUNE 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 24 to 57 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Page 19
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REBELLION GROUP LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Page 20
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REBELLION GROUP LTD
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
Page 21
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REBELLION GROUP LTD
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
Page 22
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REBELLION GROUP LTD
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 JUNE 2024
Page 23
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Rebellion Group Ltd is a private company limited by shares and incorporated in England and Wales. Its registered head office is located at Riverside House, Osney Mead, Oxford, Oxfordshire, OX2 0ES.
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 financial statements are presented in Sterling (£).
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
On 1 July 2018 the Company completed the acquisition of the companies listed below by way of a series of share for share exchanges: Rebellion Games Holdings Ltd Rebellion Publishing Holdings Ltd Rebellion Entertainment Holdings Ltd Rebellion Asset Holdings Ltd These transactions qualified as a group reconstruction and the principles of merger accounting have been applied. As a result, the consolidated financial statements have been prepared as if the entities above (and their subsidiaries) had always been subsidiaries of the Company, with comparative information included accordingly. The carrying values of the assets and liabilities of the parties to the combination have not been adjusted to their fair values on consolidation. On 22 March 2024, the Company completed the acquistion of the companies listed below from other indirectly held group companies: Rebellion Consumer Products & Media Holdings Ltd Rebellion Ltd The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
Page 24
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
The Group’s banking facilities secured in July 2021 are subject to certain financial covenants. This funding was provided to refinance existing property mortgages, acquire a new property and provide new funding to support its investment programme. The Group continues to invest significantly in all key areas of the business on the back of its cash generation and this banking facility.
The level of revenue, cash generated by the Group, and compliance of financial covenants remains highly geared towards the timings of game releases. As at 30 June 2024 it has been more than two years since a major game release, with the next major game releases scheduled for early 2025. Whilst prior releases continue to perform well, during the financial year ended 30 June 2024, the Group obtained certain financial covenant waivers from the lender and amendments to the facilities. After the balance sheet date, the Group secured further amendments to the banking facilities to modify certain financial covenants in the agreement with the aim to further support the Group to achieve its strategic objectives prior to the next scheduled releases. The Group’s existing banking facilities are repayable by July 2025. The Group has prepared forecasts and projections, taking into account current cash resources and available funding to cover future expected trading, and sensitised the forecasts for reasonably possible changes in gaming volume. These forecasts support the conclusion of the Directors that the Group is a going concern. Furthermore, although the Group expects to renew its facilities prior to July 2025, in the improbable scenario where the facilities were not renewed, the Group would have various options available to ensure it could meet any liabilities as they fall due. This would include taking such actions as revenue optimisation via promotional activity, improvements to operational efficiency, sale of non-core assets, and other measures. These measures would enable the Group to have adequate resources to continue operational existence for the foreseeable future, for a period of not less than 12 months from the date of approval of these financial statements. The Group and Company, therefore, continues to adopt the going concern basis in preparing its financial statements.
Functional and presentation currency
Transactions and balances
Page 25
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
The Group's policy is to recognise revenue in respect of its performance when, and to the extent that, it obtains the right to the consideration. The guiding principle in this assessment is to consider the stage of completion of the contractual obligations and to the extent to which the Group has obtained the right to the consideration. When the Group is exposed to the significant risks and rewards associated with the selling price it accounts for turnover as a principal and associated commission payable is accounted for as a direct cost within cost of sales. The following criteria must also be met before revenue is recognised:
Page 26
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Sale of goods Revenue from sale of games is recognised at the point at which the game is delivered. The Group makes provision against returns or price protection. Royalties from distributors The Group recognises royalty payments received or accrued from external distributors under licence of the right to distribute games in certain territories. Where advance payments against royalties are received under licence, in so far as the Group's obligations have been fulfilled, such advances are recognised at the point at which they become non refundable. Royalties from licence agreements The Group receives revenue where the Group agrees to make a game available to a third-party platform for their customers to download for an agreed period of time. The Directors do not consider there to be any material ongoing obligations once the license is granted to the customer. Revenue is, therefore, recognised on the date performance obligations stated within contractual agreements are met. The Group also receives revenue where the Group offers exclusivity rights to third-party platforms in exchange for payments in support of the ongoing development of the associated game. Revenue from such agreements is recognised as stated performance obligations in contracts are met with other up-front receipts recognised over the life of the contract. The Group also receives revenue from developing games for external customers. Revenue from such agreements is recognised on a stage of completion basis in relation to the proportion of total costs incurred out of the contracted costs over the life of the contract. Media sales The Group receives revenue from the management of customers' channels on third-party media platforms. Revenue is recognised on a commission basis, at an agreed percentage, with the value of revenue determined by the level of advertisement revenue generated for the customer by the promotions. The Group also receives advertisement revenue from its own channels on third-party media platforms. This revenue is recognised based on the data provided by the third party media platform. The Group receives revenue from brand/product owners for facilitating product promotion by new media content creators on the creators' channels. Revenue is recognised based upon the achievement of contractual milestones between Rebellion and its customer. Milestones are agreed on a contract by contract basis dependent upon viewing related performance metrics.
Page 27
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Research costs:
Research expenditure is written off in the year in which it is incurred. 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. Development costs: Capitalised development costs correspond to the costs incurred in the development of new games or software projects to the extent that the Group has determined that:
∙the project is technically and commercially feasible;
∙the project has an identified market to which the development can be used or sold;
∙the project is clearly defined and related expenditure is separately identifiable;
∙current and future costs are expected to be exceeded by future earnings;
∙the Group has the intention and ability to complete the project; and
∙adequate resources exist for the project to be completed.
Development costs will include payroll, outsourcing, direct costs and other relevant expenses relating to the project. Deferred development expenditure for each product is reviewed at the end of each accounting period and where the circumstances which have justified the deferral of the expenditure, as set out above, no longer apply, or are considered doubtful, an impairment provision is made. Capitalised development costs are amortised in line with revenue received for a maximum of 3 years. The Directors review the historical revenue cycle of the Group and consider the revenue from release of games is weighted towards the first year, with a significant proportion within the first quarter. In line with this, the value of games is amortised 70% in year 1, 20% in year 2 and 10% in year 3. At the end of each financial year, the carrying value of each product is assessed. Where the forecast revenue for a product does not exceed the current and future costs of the product, a provision for impairment is recognised.
Page 28
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in other creditors as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.
Video Game Expenditure Credits are recognised in the period in which the related qualifying expenditure is incurred. The Video Game Expenditure Credits recognised are based on management's estimates of amounts expected to be recovered. Expenditure credits are recognised within other operating income and subject to ordinary UK taxation.
Video Game Tax Relief is recognised as a tax credit in the period in which the related qualifying expenditure is incurred. The Video Game Tax Relief recognised is based on management's estimates of amounts expected to be recovered.
Page 29
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Goodwill
Other intangible assets
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.
The estimated useful lives range as follows:
Development costs include game development and TV and film production costs.
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:
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.
Page 30
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Investment property rented to other group companies is accounted for as tangible fixed assets held at cost less accumulated depreciation and any accumulated impairment losses.
Page 31
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Group's Balance Sheet when the Group 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 Group'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 long-term receivables, are initially measured at fair value in accordance with Section 12 of FRS 102, which is 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 the fair value of other financial assets cannot be measured reliably, they are measured at cost less impairment.
Page 32
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Impairment of financial assets
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 Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies 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 receipts 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.
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 Group 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 Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
Page 33
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Revenue recognition - video games In applying FRS 102, the Group makes a judgement on whether certain revenue contracts grant the rights to customers to obtain all the benefits in relation to specified performance obligations on the date the performance obligations are satisfied. The Group does not consider there to be ongoing, material obligations once the stated performance obligation is satisfied and, therefore, recognises revenue relating to these contracts in line with stated contractual terms at the point the risks and rewards transfer to the customer, being when the obligation is achieved. When the Group has control over the selling price of the transaction it accounts for turnover as a principal and associated commission payable is accounted for as a direct cost within cost of sales. Revenue recognition - media sales In applying FRS 102, where another party is involved in providing services to a customer, the Group makes a judgement on whether it has a performance obligation to provide the specified goods or services itself (principal) or whether it arranges for the other party to provide these goods or services (agent). In determining this, the Group considers who has primary responsibility for fulfilling the services to the customer, who has the inventory risk, credit risk, and the ability to set the sales price for the service. Where the Group is the principal it recognises revenue and associated commission payable as a direct cost within cost of sales. Where the Group is the agent it recognises commission as revenue net of any associated costs. Stage of completion The Group uses the percentage of completion method to determine the recognition of revenue on long-term service contracts. The percentage of completion method depends on an accurate assessment of the costs to complete the contract. These assessments are made by personnel who have adequate and sufficient knowledge of the contracts as appropriate. The nature of the estimations means that actual outcomes may differ from those made in forecasts and budgets. If the outcome of a contract is that contract costs which exceed total contract revenue, the estimated loss is recognised immediately. Development costs - video games Development costs are capitalised as an intangible asset where the Directors are satisfied as to the technical, commercial and financial viability of the related projects. The Directors consider if there are indicators of impairment and if there are an impairment review is undertaken. The assessment of indicators of impairment is considered a significant judgement to the inherent uncertainty of the success of a particular project and the significance of the intangible asset value to the entity. The recoverability of development costs is estimated based upon forecasted sales of games, generated through actual sales to date, experience of previously released games and market data.
Page 34
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
3.Judgements in applying accounting policies (continued)
Amortisation of intangible assets is calculated over the useful economic lives of the assets, being 3 years for developed games. The estimates of useful economic lives are reviewed at least annually for any changes to this estimate based on the sales cycles of released games. As detailed in note 2.6, the useful economic lives of intangible assets is weighted to be amortised at a rate of 70% in year 1, 20% in year 2 and 10% in year 3, reflecting the historical sales pattern of released games. Development costs - film and TV productions Expenditure on research and development is considered by the Directors in each reporting period for whether it qualified as research or development under FRS 102. Judgement is required by the Directors for whether R&D costs qualify as development expenditure that should be capitalised as an intangible asset. Where costs are capitalised as development expenditure, the Directors consider if there are any indicators of impairment and if there are an impairment review is undertaken. The assessment of indicators of impairment is considered a significant judgement due to the inherent uncertainty of the success of a particular project and the significance of the intangible asset value to the entity. Where an impairment review is undertaken the most sensitive input is the degree of revenue that can be generated through licensing agreements in various territories. Useful economic lives of tangible fixed assets Tangible fixed assets are depreciated over their useful lives taking into account residual value, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual value assessment consider issues such as the remaining life of the asset and projected disposal values. Video Games Tax Relief/Video Games Expenditure Credits Video Games Tax Relief/Video Games Expenditure Credits is a tax credit available on costs incurred in relation to video games that have passed the British Film Institute Cultural Test. The Directors estimate the potential tax credit claim using the directly attributable costs incurred in those products in development that have, or are expected to, pass the Cultural Test. The assessment of development costs included in Video Games Tax Relief/Video Games Expenditure Credits claims requires the Directors to make significant judgements as to whether costs are qualifying to be claimed. Deferred tax assets The recognition of deferred tax assets on taxable losses is based on forecasts of future taxable profit. The measurement of future taxable profit for the purposes of determining whether or not to recognise deferred tax assets depends on many factors, including the Group's ability to generate such taxable profits and the implementation of effective tax planning strategies. The occurrence or non-occurrence of such events in the future may lead to significant changes in the measurement of deferred tax assets.
Page 35
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
3.Judgements in applying accounting policies (continued)
The Directors apply judgement when assessing the fair value of investment properties at each reporting date, based on market data, third party reports and rental income during the year. Uncertainties in these estimates relate to local discrepancies in market trends, and the future realisation of these values may be affected by volatilities in the rental market, together with other market-driven changes that may impact future selling prices. Fair value of long-term financial assets The Directors apply judgement when assessing the fair value of long-term financial assets. The Directors have concluded that a reliable fair value for long-term financial assets cannot be obtained at 30 June 2024 owing to future uncertainties in relation to variable returns linked to the financial asset. Costs of business combination The Directors apply judgement in their determination of whether the costs associated with the business combination undertaken during the year ended 30 June 2024 comprise consideration, remuneration for ongoing employment services, or a combination of both. The Directors have concluded that all costs of the business combination represent consideration payable for the business. Value of contingent consideration In the event that certain pre-determined targets are achieved by the acquired business for the 17 months ended 31 December 2024 and the subsequent 12 months ended 31 December 2025, additional consideration of up to £2,370,678 may become payable. The Directors consider the fair value of this consideration is £2,370,678 with reference to the anticipated future performance of the acquired entity.
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 37
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 38
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 39
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 40
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 41
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 42
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 44
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Subsidiary undertakings (continued)
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Subsidiary undertakings (continued)
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 47
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 48
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Details of the terms of payment or repayment and the rates of interest payable are disclosed in note 22.
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 50
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 51
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
24.Deferred taxation (continued)
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Share premium account
Foreign exchange reserve
Other reserves
Profit and loss account
As at 30 June 2024, the Directors identified an error in respect of the information used to determine the fair value of an investment property. To correct the error, the Directors have recognised a prior year adjustment. The effect of this adjustment is a reduction in investment property and retained earnings as at 1 July 2022 of £4,349,752.
Furthermore, as at 30 June 2024, the Directors identified that a property previously recognised within tangible fixed assets met the definition of an investment property under FRS 102 as at 30 June 2023. To correct the error, the Directors have recognised a prior year adjustment with the effect of reducing tangible fixed assets and increasing investment properties as at 30 June 2023 by £4,675,000.
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £1,091,648 (2023: £1,043,130). Contributions totalling £219,174 (2023: £166,373) were payable to the fund at the balance sheet date and are included in creditors.
30.Other financial commitments
The Company is party to a composite guarantee arrangement with the other companies in the group headed by Rebellion Group Ltd to jointly and severally agree to satisfy the bank on demand in the of event of a default. The total amount owing by the Group under this arrangement as at 30 June 2024 was £26,625,000 (2023: £27,750,000).
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
The reason for the business combination was to provide new media marketing capability for the Group intellectual property, in addition to providing a separate revenue stream to the Group.
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
31.Business combinations (continued)
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Page 56
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REBELLION GROUP LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
During the year the controlling parties were the Directors
Page 57
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