Company Registration No. 09002309 (England and Wales)
VIBER UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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 - 2
Director's report
3 - 4
Independent auditor's report
5 - 6
Income statement
7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
VIBER UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
- 1 -
The director presents the strategic report for the year ended 31 December 2018.
Business Review
The company provides marketing consultancy services with the objective to create awareness and enhance the Viber messaging services across Europe. The key performance indicators are those relating to the continuous growth of users of Viber in Europe and profitability of the group entities.
The Viber brand provides a number of services such as Viber free calling, messaging services, mobile gaming and advertising.
The directors believe that the company has helped to enhance the Viber brand and achieve increased unique ID’s for the parent company.
Principal risks and uncertainties
The company and in particular the Viber brand face a number of business risks and uncertainties. In particular, the table below sets out the key risks that have been identified, along with the company’s approach to mitigating those risks.
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Breach of data security could impact on
the reputation of the Viber brand
resulting in user numbers to decrease.
|
Security measures such as end to end use encryption and data storage are reviewed on a regular basis by the Viber technicians to ensure data breaches are prevented.
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Competition
taking market
share
|
The company has competition in every
area it operates. If it were to lose
market share to existing or new entrants,
this would negatively impact on revenues
and profitability for the group.
|
The company actively monitors the market to ensure the marketing services are relevant to the users and to create awareness of the Viber brand and related services.
|
Risk to the company is low as its main objective is to provide marketing consultancy services to group companies dealing with the Viber brand.
Future Developments
The directors anticipate that the business environment will remain competitive but believe that the company is in a good financial position and that the key risks have been identified and are being well managed. The directors see significant development opportunities that the business and the Viber brand can capitalise on and build on the current position.
VIBER UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 2 -
Financial Instruments
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.
M Yosef
Director
23 September 2019
VIBER UK LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
- 3 -
The director presents his annual report and financial statements for the year ended 31 December 2018.
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 Yosef
C Constandche
(Resigned 1 October 2018)
Results and dividends
The results for the year are set out on page 7.
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.
VIBER UK LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 4 -
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.
On behalf of the board
M Yosef
Director
23 September 2019
VIBER UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VIBER UK LIMITED
- 5 -
Opinion
We have audited the financial statements of Viber UK Limited (the 'company') for the year ended 31 December 2018 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, 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 FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2018 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.
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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Opinions 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 r
eport 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.
VIBER UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VIBER UK LIMITED
- 6 -
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
r
eport
.
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 director's remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the Director's Responsibilities Statement
set out on page 3,
the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the director is responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
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 financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://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.
John Donohoe FCA (Senior Statutory Auditor)
for and on behalf of Arram Berlyn Gardner LLP
15 October 2019
Chartered Accountants
Statutory Auditor
30 City Road
London
EC1Y 2AB
VIBER UK LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2018
- 7 -
2018
2017
Notes
$
$
Revenue
3
2,483,531
1,986,694
Administrative expenses
(2,327,539)
(1,859,358)
Profit before taxation
155,992
127,336
Tax on profit
7
(707)
(18,677)
Profit for the financial year
155,285
108,659
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 2018
- 8 -
2018
2017
$
$
Profit for the year
155,285
108,659
Other comprehensive income
Currency translation differences
(28,304)
8,962
Total comprehensive income for the year
126,981
117,621
VIBER UK LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2018
31 December 2018
- 9 -
2018
2017
Notes
$
$
$
$
Non-current assets
Property, plant and equipment
8
32,515
34,458
Current assets
Trade and other receivables
9
707,957
283,576
Cash and cash equivalents
447,821
810,438
1,155,778
1,094,014
Current liabilities
10
(678,472)
(788,708)
Net current assets
477,306
305,306
Total assets less current liabilities
509,821
339,764
Equity
Called up share capital
13
299
168
Share premium account
14
42,945
-
Retained earnings
466,577
339,596
Total equity
509,821
339,764
The financial statements were approved by the board of directors and authorised for issue on 23 September 2019 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 2018
- 10 -
Share capital
Share premium account
Retained earnings
Total
Notes
$
$
$
$
Balance at 1 January 2017
168
-
221,975
222,143
Year ended 31 December 2017:
Profit for the year
-
-
108,659
108,659
Other comprehensive income:
Currency translation differences
-
-
8,962
8,962
Total comprehensive income for the year
-
-
117,621
117,621
Balance at 31 December 2017
168
-
339,596
339,764
Year ended 31 December 2018:
Profit for the year
-
-
155,285
155,285
Other comprehensive income:
Currency translation differences
-
-
(28,304)
(28,304)
Total comprehensive income for the year
-
-
126,981
126,981
Issue of share capital
13
131
42,945
-
43,076
Balance at 31 December 2018
299
42,945
466,577
509,821
VIBER UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
- 11 -
2018
2017
Notes
$
$
$
$
Cash flows from operating activities
Cash (absorbed by)/generated from operations
18
(372,139)
618,152
Income taxes refunded
680
11,103
Net cash (outflow)/inflow from operating activities
(371,459)
629,255
Investing activities
Purchase of property, plant and equipment
(7,863)
(35,998)
Net cash used in investing activities
(7,863)
(35,998)
Financing activities
Proceeds from issue of shares
43,076
-
Net cash generated from/(used in) financing activities
43,076
-
Net (decrease)/increase in cash and cash equivalents
(336,246)
593,257
Cash and cash equivalents at beginning of year
810,438
208,192
Effect of foreign exchange rates
(26,371)
8,989
Cash and cash equivalents at end of year
447,821
810,438
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
- 12 -
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. The principal place of business is 2 rue des Fosse, L - 1536 Luxembourg.
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
true
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.
T
he Directors consider the going concern basis to be appropriate because, in their opinion, the Company will continue to obtain sufficient funding
, from fellow group companies and if required from other related companies under common control,
to enable it to pay its debts as they fall due.
1.3
Revenue
Revenue
represents fees which are charged to a fellow group company on a cost plus basis and are recognised in the period to which they relate.
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 2018
1
Accounting policies
(Continued)
- 13 -
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)
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’ 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.
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.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 14 -
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.
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.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 15 -
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 transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
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.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
1
Accounting policies
(Continued)
- 16 -
1.12
Share-based payments
The fair value of equity-settled share based payments to employees is determined at the date of grant and is expensed on a straight-line basis over the vesting period based on the
company’s
estimate of shares or options that will eventually vest.
The fair value of the options was
measured using the share price at the grant date.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.13
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.
1.14
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.
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
There are no critical judgements deemed to have had a significant effect on amounts recognised in the financial statements.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 17 -
3
Revenue
Turnover represents the amounts derived from the provision of services which fall within the company’s ordinary activities, stated net of value added tax.
2018
2017
$
$
Revenue analysed by class of business
Rendering of services
2,483,531
1,986,694
2018
2017
$
$
Revenue analysed by geographical market
Europe
2,483,531
1,986,694
4
Operating profit
2018
2017
Operating profit for the year is stated after charging:
$
$
Exchange losses
1,662
9,484
Fees payable to the company's auditor for the audit of the company's financial statements
11,172
11,118
Depreciation of owned property, plant and equipment
7,873
1,513
Operating lease charges
104,774
77,867
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 $1,662 (2017 - $9,484).
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2018
2017
Number
Number
Administrative staff
7
4
Their aggregate remuneration comprised:
2018
2017
$
$
Wages and salaries
1,681,001
1,395,877
Social security costs
178,488
141,143
Pension costs
24,824
17,894
1,884,313
1,554,914
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 18 -
6
Director's remuneration
2018
2017
$
$
Remuneration for qualifying services
839,526
21,788
Remuneration disclosed above include the following amounts paid to the highest paid director:
2018
2017
$
$
Remuneration for qualifying services
842,307
-
In 2017 director's renumeration is less than $200k, so no disclosure was made in the accounts.
7
Taxation
2018
2017
$
$
Current tax
UK corporation tax on profits for the current period
82,596
78,838
Deferred tax
Adjustment in respect of prior periods
(81,889)
(60,161)
Total tax charge
707
18,677
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
7
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:
2018
2017
$
$
Profit before taxation
155,992
127,336
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2017: 19.25%)
29,638
24,512
Tax effect of expenses that are not deductible in determining taxable profit
52,763
64,941
Permanent capital allowances in excess of depreciation
(1,494)
(6,930)
Depreciation on assets not qualifying for tax allowances
1,496
297
Other permanent differences
123
357
Under/(over) provided in prior years
(81,889)
(60,161)
Foreign exchange differences
70
(4,339)
Taxation charge for the year
707
18,677
8
Property, plant and equipment
Leasehold land and buildings
Fixtures and fittings
Computers
Total
$
$
$
$
Cost
At 1 January 2018
5,705
17,368
12,925
35,998
Additions
-
4,338
3,525
7,863
Exchange adjustments
(320)
(975)
(725)
(2,020)
At 31 December 2018
5,385
20,731
15,725
41,841
Depreciation and impairment
At 1 January 2018
191
371
978
1,540
Depreciation charged in the year
1,077
3,709
3,087
7,873
Exchange adjustments
(11)
(21)
(55)
(87)
At 31 December 2018
1,257
4,059
4,010
9,326
Carrying amount
At 31 December 2018
4,128
16,672
11,715
32,515
At 31 December 2017
5,514
16,997
11,947
34,458
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 20 -
9
Trade and other receivables
2018
2017
Amounts falling due within one year:
$
$
Amounts owed by group undertakings
623,375
187,523
Other receivables
55,292
79,610
Prepayments and accrued income
29,290
16,443
707,957
283,576
10
Current liabilities
2018
2017
$
$
Trade payables
7,334
10,449
Corporation tax
82,596
81,209
Other payables
29,304
38,355
Accruals and deferred income
559,238
658,695
678,472
788,708
11
Retirement benefit schemes
2018
2017
Defined contribution schemes
$
$
Charge to profit or loss in respect of defined contribution schemes
24,824
17,894
12
Share-based payment transactions
The company operates a share option scheme whereby options over shares in the ultimate parent, Rakuten Inc, were granted to employees.
Number of share options
Weighted average exercise price
2018
2017
2018
2017
Number
Number
$
$
Outstanding at 1 January 2018
85,500
-
0.01
-
Granted
10,000
85,500
0.01
0.01
Outstanding at 31 December 2018
95,500
85,500
-
-
Exercisable at 31 December 2018
-
-
-
-
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
12
Share-based payment transactions
(Continued)
- 21 -
10,000 options were granted on 1 November 2018. The weighted average fair value of the options on the measurement date was $6.43.
Inputs were as follows:
2018
2017
Weighted average share price
6.41
9.74
Weighted average exercise price
0.01
0.01
Expected life
10.00
10.00
Risk free rate
0.02
0.02
13
Share capital
2018
2017
$
$
Ordinary share capital
Issued and fully paid
200 Ordinary of $1.495 each
299
168
299
168
During the year 100 Ordinary Shares were issued at a premium of $429.45 per share.
14
Share premium account
2018
2017
$
$
At the beginning of the year
-
-
Issue of new shares
42,945
-
At the end of the year
42,945
-
On 27 July 2018 the company issued 100 Ordinary Shares at a premium of $429.45 per share.
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 22 -
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:
2018
2017
$
$
Within one year
72,264
56,749
Between two and five years
54,198
99,311
126,462
156,060
16
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sale of services
Issue of shares
2018
2017
2018
2017
$
$
$
$
Entities with control, joint control or significant influence over the company
2,483,531
1,986,694
42,945
-
The following amounts were outstanding at the reporting end date:
2018
2017
Amounts due to related parties
$
$
Entities with control, joint control or significant influence over the company
25,508
30,617
The following amounts were outstanding at the reporting end date:
2018
2017
Amounts due from related parties
$
$
Entities with control, joint control or significant influence over the company
623,523
187,523
VIBER UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
- 23 -
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
2018
2017
$
$
Profit for the year after tax
155,285
108,659
Adjustments for:
Taxation charged
707
18,677
Depreciation and impairment of property, plant and equipment
7,873
1,513
Movements in working capital:
(Increase) in trade and other receivables
(424,381)
(173,672)
(Decrease)/increase in trade and other payables
(111,623)
662,975
Cash (absorbed by)/generated from operations
(372,139)
618,152
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