Company Registration No. 09002309 (England and Wales)
VIBER UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
VIBER UK LIMITED
COMPANY INFORMATION
Director
M Yosef
Company number
09002309
Registered office
30 City Road
London
EC1Y 2AB
Auditor
Arram Berlyn Gardner LLP
30 City Road
London
EC1Y 2AB
VIBER UK LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 5
Income statement
6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
VIBER UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2016
- 1 -
The director presents the strategic report for the year ended 31 December 2016.
Fair review of the business
The results for the year were considered satisfactory by the directors.
Principal risks and uncertainties
The company's principal financial instruments comprise of bank balances, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations.
Due to the nature of the financial markets the company is exposed to fluctuating price risks subject to market conditions. In addition the company is exposed to foreign currency risk. Trade debtors are managed in respect of credit and cashflow risk by policies concerning credit offered to customers and regular monitoring of outstanding amounts for both time and credit limits.
In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through use of existing funds.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Key performance indicators
The key financial highlights are as follows:
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Profit for the financial period
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M Yosef
Director
29 September 2017
VIBER UK LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2016
- 2 -
The director presents his annual report and financial statements for the year ended 31 December 2016.
Principal activities
The principal activity of the company is that a of marketing consultancy business.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
M Hardy
(Resigned 12 February 2016)
M Yosef
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Auditor
In accordance with the company's articles, a resolution proposing that Arram Berlyn Gardner LLP be reappointed as auditor of the company will be put at a General Meeting.
Statement of director's responsibilities
The director is responsible for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 judgements and accounting estimates that are reasonable and prudent;
-
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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 enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
VIBER UK LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 3 -
On behalf of the board
M Yosef
Director
29 September 2017
VIBER UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VIBER UK LIMITED
- 4 -
We have audited the financial statements of Viber UK Limited for the year ended 31 December 2016 set out on pages 6 to 22. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
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.
Respective responsibilities of director and auditor
As explained more fully in the Director's Responsibilities Statement set out on pages 2 - 3, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the director; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements:
-
• give a true and fair view of the state of the company's affairs as at 31 December 2016 and of its profit for the year then ended;
-
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
true
VIBER UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VIBER UK LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the Strategic Report and the Director's Report
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
• the financial statements are not in agreement with the accounting records and returns; or
-
• certain disclosures of directors' remuneration specified by law are not made; or
-
• we have not received all the information and explanations we require for our audit.
John Donohoe (Senior Statutory Auditor)
for and on behalf of Arram Berlyn Gardner LLP
29 September 2017
Chartered Accountants
Statutory Auditor
30 City Road
London
EC1Y 2AB
VIBER UK LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2016
- 6 -
2016
2015
Notes
$
$
Revenue
3
836,051
1,328,081
Administrative expenses
(622,937)
(1,182,518)
Operating profit
4
213,114
145,563
Finance costs
7
(831)
(2,735)
Profit before taxation
212,283
142,828
Tax on profit
8
(56,382)
(7,741)
Profit for the financial year
14
155,901
135,087
The Income Statement has been prepared on the basis that all operations are continuing operations.
VIBER UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016
- 7 -
2016
2015
$
$
Profit for the year
155,901
135,087
Other comprehensive income
Currency translation differences
(59,787)
(18,167)
Total comprehensive income for the year
96,114
116,920
VIBER UK LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2016
31 December 2016
- 8 -
2016
2015
Notes
$
$
$
$
Fixed assets
Property, plant and equipment
9
-
75,328
Current assets
Trade and other receivables
10
109,904
923,199
Cash and cash equivalents
208,192
384,238
318,096
1,307,437
Current liabilities
11
(95,953)
(1,256,736)
Net current assets
222,143
50,701
Total assets less current liabilities
222,143
126,029
Equity
Called up share capital
13
168
168
Retained earnings
14
221,975
125,861
Total equity
222,143
126,029
The financial statements were approved by the board of directors and authorised for issue on 29 September 2017 and are signed on its behalf by:
M Yosef
Director
Company Registration No. 09002309
VIBER UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
- 9 -
Share capital
Retained earnings
Total
$
$
$
Balance at 1 January 2015
168
8,941
9,109
Year ended 31 December 2015:
Profit for the year
-
135,087
135,087
Other comprehensive income:
Currency translation differences
-
(18,167)
(18,167)
Total comprehensive income for the year
-
116,920
116,920
Balance at 31 December 2015
168
125,861
126,029
Year ended 31 December 2016:
Profit for the year
-
155,901
155,901
Other comprehensive income:
Currency translation differences
-
(59,787)
(59,787)
Total comprehensive income for the year
-
96,114
96,114
Balance at 31 December 2016
168
221,975
222,143
VIBER UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
- 10 -
2016
2015
Notes
$
$
$
$
Cash flows from operating activities
Cash (absorbed by)/generated from operations
18
(158,767)
291,863
Interest paid
(831)
(2,735)
Income taxes paid
(9,668)
(33,855)
Net cash (outflow)/inflow from operating activities
(169,266)
255,273
Investing activities
Purchase of property, plant and equipment
-
(38,002)
Proceeds on disposal of property, plant and equipment
(6,780)
-
Net cash used in investing activities
(6,780)
(38,002)
Net cash used in financing activities
-
-
Net (decrease)/increase in cash and cash equivalents
(176,046)
217,271
Cash and cash equivalents at beginning of year
384,238
166,967
Cash and cash equivalents at end of year
208,192
384,238
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
- 11 -
1
Accounting policies
Company information
Viber UK Limited is a limited company incorporated in England.
The registered office is
30 City Road, London, EC1Y 2AB.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The company's functional currency is £ Sterling, being the currency of the primary economic environment in which it operates. The financial statements are presented in US$, which is the presentation currency of its group.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
A
t the time of approving the financial statements
,
t
he director has a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Revenue
is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT and other sales related taxes.
Income is recognised in accordance with the Marketing Services Agreement by reference to work carried out to the reporting date.
1.4
Property, plant and equipment
Fixed assets
are stated at
cost less accumulated depreciation and accumulated impairment losses. Such cost
in
cludes costs directly attributable to making
the asset capable of operating as intended.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
20% Straight line
Fixtures and fittings
20% Straight line
Computers
20% Straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of non-current assets
At each reporting end date, the
company
reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 12 -
The r
ecoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The Company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method 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.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 13 -
Trade receivables
, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
The impairment loss is recognised in operating profit.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade payables
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade payables are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 14 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
The company operates an employee share ownership plan (ESOP) trust and has de facto control of the shares held by the trust and bears their benefits and risks. The
company
records assets and liabilities of the trust as its own. Consideration paid by the ESOP scheme for shares of the
company
is deducted from equity. Finance costs and administrative expenses incurred by the
company
in relation to the ESOP are recognised on an accruals basis.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Share-based payments
For cash-settled share-based payments, a liability is recognised for the goods and services acquired, measured initially at the fair value of the liability. At the balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.
1.14
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the income statement for the period.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Tangible Assets
Accounting for tangible assets involves the use of estimates and judgements for determining the useful lives over which these are to be depreciated and the existence and amount of any impairment.
Tangible assets are depreciated on a reducing balance or straight line basis over their estimated useful lives and taking into account their expected residual values. When the Company estimates useful lives, various factors are considered including expected technological obsolescence and the expected usage of the asset.
The Directors regularly review these asset lives and change them as necessary to reflect the estimated current remaining lives in light of technological changes, future economic utilisation and physical condition of the assets concerned. A significant change in asset lives can have a significant change on depreciation and amortisation charges for the period.
Impairment of debtors
The company makes an estimate of the recoverable value of trade and other debtors.
When assessing impairment of trade and other debtors, management considers
factors including the current credit rating of the debtor, the ageing profile of debtors
and historical experience.
Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. This obligation may be legal or constructive deriving from regulations, contracts, normal practices or public commitments that lead third parties to reasonably expect that the Company will assume certain responsibilities. The amount of the provision is determined based on the best estimate of the outflow of resources required to settle the obligation, taking into account all available information.
No provision is recognised if the amount of liability cannot be estimated reliably. In this case, the relevant information is disclosed in the notes to the financial statements.
Given the uncertainties inherent in the estimates used to determine the amount of provision, actual outflows of resources may differ from the amounts recognised originally on the basis of the estimates.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 17 -
3
Revenue
Turnover represents the amounts derived from the provision of goods and services which fall within the company’s ordinary activities, stated net of value added tax.
2016
2015
$
$
Revenue analysed by class of business
Rendering of services
836,051
1,328,081
2016
2015
$
$
Revenue analysed by geographical market
Luxembourg
836,051
1,328,081
4
Operating profit
2016
2015
Operating profit for the year is stated after charging/(crediting):
$
$
Exchange gains
(132,620)
(30,623)
Fees payable to the company's auditor for the audit of the company's financial statements
10,704
14,426
Depreciation of owned property, plant and equipment
5,996
16,600
Loss on disposal of property, plant and equipment
64,405
-
Share-based payments
-
(100,437)
Operating lease charges
44,641
73,599
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to $132,620 (2015 - $30,623).
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2016
2015
Number
Number
Administrative staff
3
7
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2016
2015
$
$
Wages and salaries
500,811
777,316
Social security costs
53,059
93,759
Pension costs
14,389
28,532
568,259
899,607
6
Director's remuneration
2016
2015
$
$
Remuneration for qualifying services
222,332
357,882
Company pension contributions to defined contribution schemes
11,017
20,328
233,349
378,210
Remuneration disclosed above include the following amounts paid to the highest paid director:
2016
2015
$
$
Remuneration for qualifying services
222,332
357,882
Company pension contributions to defined contribution schemes
11,017
20,328
7
Finance costs
2016
2015
$
$
Other interest
831
2,735
8
Taxation
2016
2015
$
$
Current tax
UK corporation tax on profits for the current period
56,382
7,741
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
8
Taxation
(Continued)
- 19 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2016
2015
$
$
Profit before taxation
212,283
142,828
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2015: 20.00%)
42,457
28,566
Tax effect of expenses that are not deductible in determining taxable profit
5,876
(20,408)
Permanent capital allowances in excess of depreciation
631
(3,536)
Depreciation on assets not qualifying for tax allowances
1,133
3,320
Tax at marginal rate
(300)
290
Foreign exchange differences
(5,419)
(491)
Fixed asset loss on disposals
12,004
-
Taxation charge for the year
56,382
7,741
9
Property, plant and equipment
Leasehold land and buildings
Fixtures and fittings
Computers
Total
$
$
$
$
Cost
At 1 January 2016
41,882
30,598
21,293
93,773
Disposals
(34,913)
(25,507)
(17,750)
(78,170)
Exchange adjustments
(6,969)
(5,091)
(3,543)
(15,603)
At 31 December 2016
-
-
-
-
Depreciation and impairment
At 1 January 2016
7,987
6,486
3,972
18,445
Depreciation charged in the year
2,678
1,957
1,361
5,996
Eliminated in respect of disposals
(8,967)
(7,093)
(4,485)
(20,545)
Exchange adjustments
(1,698)
(1,350)
(848)
(3,896)
At 31 December 2016
-
-
-
-
Carrying amount
At 31 December 2016
-
-
-
-
At 31 December 2015
33,895
24,112
17,321
75,328
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 20 -
10
Trade and other receivables
2016
2015
Amounts falling due within one year:
$
$
Amounts due from group undertakings
105,716
42,302
Other receivables
2,775
850,901
Prepayments and accrued income
1,413
29,996
109,904
923,199
11
Current liabilities
2016
2015
$
$
Trade payables
1,091
36,041
Amounts due to group undertakings
-
329,254
Corporation tax
51,429
4,715
Other taxation and social security
-
80,281
Other payables
-
781,284
Accruals and deferred income
43,433
25,161
95,953
1,256,736
12
Retirement benefit schemes
2016
2015
Defined contribution schemes
$
$
Charge to profit or loss in respect of defined contribution schemes
14,389
28,532
13
Share capital
2016
2015
$
$
Ordinary share capital
Issued and fully paid
100 Ordinary of £1.68 each
168
168
168
168
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
- 21 -
14
Retained earnings
2016
2015
$
$
At the beginning of the year
125,861
8,941
Profit for the year
155,901
135,087
Currency translation differences
(59,787)
(18,167)
At the end of the year
221,975
125,861
15
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2016
2015
$
$
Within one year
-
74,264
Between two and five years
-
208,347
-
282,611
16
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sale of services
Payments for services
2016
2015
2016
2015
$
$
$
$
Entities with control, joint control or significant influence over the company
836,051
1,328,081
-
470,863
The following amounts were outstanding at the reporting end date:
2016
2015
Amounts owed to related parties
$
$
Entities with control, joint control or significant influence over the company
-
226,947
Other related parties
-
60,005
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2016
16
Related party transactions
(Continued)
- 22 -
The following amounts were outstanding at the reporting end date:
2016
Balance
Amounts owed by related parties
$
Entities with control, joint control or significant influence over the company
105,716
There were no amounts owed in the previous period.
17
Controlling party
The parent company of Viber UK Limited is Viber Media Ltd, a company incorporated in Cyprus. The ultimate parent company is Rakuten Inc, a company incorporated in Japan and listed on the Tokyo Stock Exchange. The financial statements of Rakuten Inc are publicly available from http://global.rakuten.com/corp/investors/documents/annual.html.
18
Cash generated from operations
2016
2015
$
$
Profit for the year after tax
155,901
135,087
Adjustments for:
Taxation charged
56,382
7,741
Finance costs
831
2,735
Loss on disposal of property, plant and equipment
76,720
-
Depreciation and impairment of property, plant and equipment
5,388
15,942
Movements in working capital:
Decrease/(increase) in trade and other receivables
813,295
(781,226)
(Decrease)/increase in trade and other payables
(1,267,284)
911,584
Cash (absorbed by)/generated from operations
(158,767)
291,863
2016-12-31
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