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FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 30 JUNE 2020 |
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ADSLOT UK LIMITED |
REGISTERED NUMBER:
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FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 30 JUNE 2020 |
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FOR |
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ADSLOT UK LIMITED |
ADSLOT UK LIMITED (REGISTERED NUMBER: 07572406) |
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CONTENTS OF THE FINANCIAL STATEMENTS |
for the Year Ended 30 June 2020 |
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Company Information | 1 |
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Balance Sheet | 2 |
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Notes to the Financial Statements | 3 |
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ADSLOT UK LIMITED |
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COMPANY INFORMATION |
for the Year Ended 30 June 2020 |
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DIRECTORS: |
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SECRETARY: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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AUDITORS: |
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Statutory Auditors |
Herschel House |
58 Herschel Street |
Slough |
Berkshire |
SL1 1PG |
ADSLOT UK LIMITED (REGISTERED NUMBER: 07572406) |
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BALANCE SHEET |
30 June 2020 |
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30.6.20 | 30.6.19 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 4 |
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CURRENT ASSETS |
Debtors | 5 |
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Cash at bank |
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CREDITORS |
Amounts falling due within one year | 6 |
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NET CURRENT LIABILITIES | ( |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CAPITAL AND RESERVES |
Called up share capital | 7 |
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Retained earnings | ( |
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SHAREHOLDERS' FUNDS | ( |
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In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered. |
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The financial statements were approved by the Board of Directors and authorised for issue on
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ADSLOT UK LIMITED (REGISTERED NUMBER: 07572406) |
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NOTES TO THE FINANCIAL STATEMENTS |
for the Year Ended 30 June 2020 |
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1. | STATUTORY INFORMATION |
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Adslot UK Limited is a
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The trading address of the company is Three Tuns House, 109 Borough High Street, London, SE1 1NL. |
ADSLOT UK LIMITED (REGISTERED NUMBER: 07572406) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 30 June 2020 |
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2. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention. |
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The financial statements have been prepared on the going concern basis as a result of parent company support. However, there is fundamental uncertainty as to the parent company's ability to provide this support as detailed in the 'emphasis of matter' in their own accounts, recited below; |
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"Management continues to invest resources to support growth in trading fees, primarily from media agency holding companies and their subsidiaries in the US market. |
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In December 2019 the Group successfully raised $6.4 million via a share placement, resulting in $5.4 million net cash inflows in the period under review. |
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Inflows from financing activities of $5.6 million, combined with net cash outflows from operating and investing activities of $7.7 million, resulted in net cash outflows of $2.1 million in the 2020 financial year. Management anticipate incurring further net cash outflows from operations until such time sufficient revenue growth is achieved. |
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Based on the findings made by Innovation and Science Australia in relation to the FY16 R&D activities, the ATO amended the R&D Tax Incentive Offset for FY16. The ATO offset the $1.5 million relating to the disputed FY2016 R&D from the FY2019 R&D refund, with a net $0.3 million received in April 2020 for the FY2019 R&D claim. The Group continues to defend its legitimacy of its claim and has requested a review of the findings by the Administrative Appeals Tribunal (AAT). If successful, the $1.5 million will be refunded to the Group. |
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The FY2020 R&D claim of $1.9m is expected to be received in the first half of the 2021 financial year. If a delay is expected growth in revenues, and/or a delay in payment of the FY2020 R&D claim was to occur, this has the potential to create a cash flow risk to the Group which could affect its ability to pay its debts as and when they fall due, and to realise its assets in normal course of business. |
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However, the directors believe the Group will be able to continue to pay its debts as and when they fall due for the following reasons: |
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o the Group has a cash position of $6.2 million at 30 June 2020; |
o FY2020 R&D claim of $1.9m is expected to be received in the first half of FY2021; |
o Symphony licence fees which are largely recurring and predictable; |
o $0.7 million cash from the current COVID-19 related stimulus packages expected in the first half of FY2021; |
o ongoing cost management initiates, including current employee salary reductions in place in response to the COVID-19 pandemic; |
o reduction to office space in each market, reducing the largest fixed cost of the business outside salaries; |
o the opportunity to implement further cost reductions; and |
o the group has a proven track record of successfully raising capital from existing and new investors. |
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As part of the directors' consideration of the appropriateness of adopting the going concern basis in preparing the financial statements, a range of scenarios regarding the impact of the COVID-19 pandemic on the Group's made for Adslot Media in the USA where the greatest revenue growth is expected. |
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The primary growth in revenue expected in the 2021 financial year is from increased Adslot Media trading fees. While all the major holding companies (the Group's largest clients) are currently facing significant revenue decreased and responding with extensive cost reductions, the COVID-19 pandemic has also focused their strategic attention to automation and process improvements. This has enabled an acceleration of discussions with senior people about the role Adslot Media can play in the digital media booking workflow. |
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ADSLOT UK LIMITED (REGISTERED NUMBER: 07572406) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 30 June 2020 |
Further it is possible that the major agency holding companies may seek to reduce operating costs including those associated with existing software solutions such as Symphony came under greater pricing pressure in the FY2021 from customers seeking to reduce costs. Conversely, Symphony is also expected to benefit from prospective clients seeking to improve workflow efficiencies especially through technology solutions. For example, Symphony is currently undergoing the first market implementation for the Omnicom Group in the Netherlands. |
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While media spend globally reduced in the 2020 financial year, digital media (the Group's market), had lower decreases compared to other channels, including cinema, out-of-home and print media. It is noted that all markets in which the Group operates have experienced increased media trading from the March 2020 low. |
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The Group is expected to receive $0.7 million in the first half of FY2021 under current government stimulus packages from the markets the Group operates in. The Group may be eligible for additional stimulus, such as JobKeeper 2.0 in FY2021. |
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The full financial impacts of COVID-19 in Australia and across the globe are inherently uncertain. However as described above, the Group is well placed to respond to any opportunities. |
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Accordingly, the directors believe there exists a reasonable expectation that the Group can continue to pay its debts as and when they fall due, and the financial report has been prepared on a going concern basis" |
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Related party disclosures |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
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Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
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Turnover represents net invoiced services sold to the parent company, excluding value added tax. Turnover is recognised when re-chargeable expenses are incurred. |
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Tangible fixed assets |
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Plant and machinery etc | - |
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Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
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Current or deferred taxation assets and liabilities are not discounted. |
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Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
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Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
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Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
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Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
ADSLOT UK LIMITED (REGISTERED NUMBER: 07572406) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 30 June 2020 |
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2. | ACCOUNTING POLICIES - continued |
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Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
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Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
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Financial instruments |
Basic Financial Instruments as covered by Section 11 of FRS102 are measured at amortised cost. The company does not have any Other Financial Instruments as covered by Section 12 of FRS102. |
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Share-based payments |
Employees of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments in the parent undertaking, Adslot Limited (equity-settled transactions). The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. |
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That cost is recognised in employee benefits expense, together with a corresponding increase in equity (other capital reserves), over a period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss and other comprehensive income for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. |
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Government grants |
Government grants relating to the Coronavirus Small Business Rates Scheme are recognised on an accruals basis. |
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3. | EMPLOYEES AND DIRECTORS |
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The average number of employees during the year was
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4. | TANGIBLE FIXED ASSETS |
Plant and |
machinery |
etc |
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COST |
At 1 July 2019 |
and 30 June 2020 |
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DEPRECIATION |
At 1 July 2019 |
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Charge for year |
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At 30 June 2020 |
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NET BOOK VALUE |
At 30 June 2020 |
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At 30 June 2019 |
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ADSLOT UK LIMITED (REGISTERED NUMBER: 07572406) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 30 June 2020 |
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5. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
30.6.20 | 30.6.19 |
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Amounts owed by group undertakings |
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Other debtors |
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6. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
30.6.20 | 30.6.19 |
£ | £ |
Trade creditors |
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Amounts owed to group undertakings |
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Other creditors & accruals |
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7. | CALLED UP SHARE CAPITAL |
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Allotted, issued and fully paid: |
Number: | Class: | Nominal | 30.6.20 | 30.6.19 |
value: | £ | £ |
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Ordinary | £1 | 100 | 100 |
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8. | DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006 |
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The Report of the Auditors was unqualified. |
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for and on behalf of
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Whilst, the audit was not qualified we would like to draw your attention to the following statement contained within our audit report as included within the full financial statements:- |
"Material uncertainty related to going concern |
We draw attention to note 2 in the financial statements, This note describes that the financial statements have been prepared on the going concern basis as, despite going concern uncertainty in the parent company Adslot Limited, the parent company has confirmed its willingness to support the company for a period in excess of 12 months from the date on which the audit report is signed |
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However, the company and the overall group have suffered a financial loss, and management anticipate incurring net losses from operations until a sufficient revenue growth is achieved. Without such revenue growth and resolution of other matters as detailed in note 2, a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. |
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Our opinion is not modified in respect of this matter." |
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In addition our audit report contained the following statement:- |
"Use of our 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 a Report of the Auditors 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." |
ADSLOT UK LIMITED (REGISTERED NUMBER: 07572406) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 30 June 2020 |
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9. | ULTIMATE CONTROLLING PARTY |
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There is no ultimate controlling party. |
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10. | SHARE-BASED PAYMENT TRANSACTIONS |
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The company has issued equity settled share options with its employees. The equity offered is that of the ultimate parent company Adslot Limited. |
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On 2nd September 2016, Adslot UK Limited offered two employees 150,000 shares each over a 21 month performance period to 30th June 2018 based on an annual target, with no vesting period. |
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During the year ended 30th June 2019 both employees exercised the remaining 75,000 shares each of their total 150,000 shares. As at 30 June 2019 all shares have been either exercised or forfeited and reversed. |
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On 1st August, Adslot UK Limited offered one employee 500,000 shares which expire 4 years from this date or upon termination of the optionee's employment or other relationship with the company. |
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The options vest evenly over 36 months, with 33.33% of the original number of shares becoming exercisable on the first anniversary of the vesting date. The fair value of the options were valued using the black scholes method. |
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As at 30 June 2020, no shares had been exercised or forfeited as the vesting conditions have not yet been met.Therefore included in the wage expense is the share option expense in relation to these rights of £783.08. |
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11. | ULTIMATE PARENT COMPANY |
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The immediate and ultimate parent company is Adslot Limited, a company incorporated in the Australia, with its registered office at 419 Collins Street, Melbourne, Victoria 3000, Australia. Adslot Limited is the largest and only group company to prepare consolidated financial statements |