NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

 

 

1.         GENERAL INFORMATION

 

 Digitalbox Plc is a public limited company incorporated and domiciled in the United Kingdom. The address of the registered office 2-4 Henry Street, Bath, England, BA1 1JT. The Company is listed on AIM of the London Stock Exchange.

 

The principal activity of the Group and of the Company are disclosed in the Directors' Report.

 

These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates. Foreign operations are included in accordance with the policies set out in note 4.

 

2.         STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED IN THE CURRENT             FINANCIAL    YEAR ENDED 31 DECEMBER 2021

 

 

The following IFRS standards, amendments or interpretations became effective during the year ended 31 December 2021 but have not had a material effect on this Consolidated Financial Information:

 

Standard

Amendments to IFRS 16: Leases (Covid-19-Related Rent Concessions)             

 

All new standards and amendments to standards and interpretations effective for annual periods beginning on or after 1 January 2021 that are applicable to the Group have been applied in preparing these Consolidated Financial Statements.

 

 

3.         NEW AND REVISED IFRS STANDARDS IN ISSUE BUT NOT YET EFFECTIVE

 

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Consolidated Financial Statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.

 

Standard	Effective date
Amendments to IFRS 3          Reference to the Conceptual Framework	1 January 2022
Amendments to IAS 16          Property Plant and Equipment (Proceeds before intended use)	1 January 2022
Amendments to IAS 37          Onerous Contracts (Cost of fulfilling a contract)	1 January 2022
Amendments to IFRS 1, Annual Improvements to IFRS Standards 2018-2020 IFRS 9, IFRS 16 and IAS 41	1 January 2022
Amendments to IAS 1              Disclosure of accounting policies	1 January 2023
Amendments to IAS 8    Definition of accounting estimates	1 January 2023
Amendments to IAS 12  Deferred tax related to assets and liabilities arising from a single transaction	1 January 2023

 

The Directors are continuing to assess the potential impact that the adoption of the standards listed above will have on the Consolidated Financial Statements for the year ended 31 December 2022.

 

4.         ACCOUNTING POLICIES

 

Principal accounting policies

The Group is a public Group incorporated and domiciled in the United Kingdom. The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

 

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as adopted by the United Kingdom ("adopted IFRSs") and those parts of the Companies Act 2006 which apply to companies preparing their financial statements under IFRSs. The financial statements are presented to the nearest round thousand (£'000) except where otherwise indicated.

Basis of Consolidation

The Group comprises the parent company and its subsidiaries, as detailed in note III to the company financial statements. All of these have been included in the consolidated financial statements in accordance with the principles of acquisition accounting as laid out by IFRS 3 Business Combinations.

 

Going concern

Considering the profit generated during the year of £396k (2020: loss of £191k), the Group had closing net assets of £13,073k (2020: £12,534k), net current assets of £2,913k (2020: £2,373k) and cash at bank and in hand of £2,186k (2020: £1,853k).

 

The Group generated cashflows from operating activities of £510k during the year. The Group has remained cash generative during a difficult economic period which saw the profound impact of COVID-19.

 

In considering going concern, the Directors consider the current financial position and performance of the business, as well as reviewing financial information for a period of at least 12 months from the date of approval of the financial statements. Given the financial performance of the Group, the successful acquisition and integration of Tab Media in 2020 and the expectations from forecast financial information, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

 

The Directors believe that they can continue to mitigate the impact of COVID-19 as has been demonstrably achieved in the year ended 31 December 2021, and accordingly continue to adopt the going concern basis in preparing the financial statements.

 

Business combinations and goodwill

Acquisitions of subsidiaries and business are accounted for using the acquisition method. The assets and liabilities and contingent liabilities of the subsidiaries are measured at their fair value at the date of acquisition. Any excess of acquisition over fair values of the identifiable net assets acquired is recognised as goodwill. Goodwill arising on consolidation is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss accounts and is not subsequently reversed. Acquisition related costs are recognised in the income statement as incurred.

 

Transactions between wholly owned group members involving the hive-up or hive-across of trade and / or assets and liabilities are outside the scope of IFRS 3 on the grounds that they represent common control business combinations. The group has elected to apply IFRS 3 in accounting for all such transactions, which involves a full fair value exercise at the date of the transaction. This accounting policy has been consistently applied to all such transactions, and has been chosen on the grounds that the nature of these transactions is the amalgamation of acquired businesses into the existing trading business, which generally takes place shortly after the original acquisition.

 

             Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

 

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

 

The Group monitors the performance obligations in accordance with IFRS 15 considering that the performance obligations are met upon the Group delivering the advertisement to the customer.

 

A receivable is recognised when the services are delivered at this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

 

Rendering of services

Revenue from providing services is recognised in the accounting period in which the services are rendered.

 

Revenue from the sale of advertising space is recognised upon the advertisement being generated and the Group delivering the advertisement to the customer. The Group recognises revenue when the amount of revenue can be reliably measured, it is probable future economic benefits will flow to the entity and the Group has satisfied the performance obligations. Revenue is not received in advance and therefore the Group does not account for contract liabilities.

 

Leases

The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

 

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. The Group assesses its discount rate using its incremental borrowing rate.

 

Lease payments included in the measurement of the lease liability comprise fixed lease payments (including in-substance fixed payments), less any lease incentives.

 

The lease liability is included in Payables in the Statement of Financial Position.

 

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the payments made.

 

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

 

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciation over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

 

The right-of-use assets are included in the tangible fixed assets in the Statement of Financial Position.

 

The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts any identified impairment losses.

 

Foreign currency

The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group company are expressed in pound sterling, which is the functional currency of the Group, and the presentational currency for the consolidated financial statements.

 

In preparing the financial statements of the individual companies, transactions in currencies other than the individual company's functional currency (foreign currencies) are recorded at rates of exchange prevailing on the dates of the transactions. At the reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of the gain or loss is also recognised directly in equity.

                                                          

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised as income and expense in the period in which the operation is disposed of. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rates.

 

Intangible assets

Intangible assets include goodwill arising on the acquisition of subsidiaries and represents the difference between the fair value of the consideration payable and the fair value of the net assets that have been acquired. The residual element of Goodwill is not being amortised but is subject to an annual impairment review.

 

Also included within intangible assets are various assets separately identified in business combinations (such as brand value) to which the Directors have ascribed a fair value and a useful economic life. The ascribed value of these intangible assets is being amortised on a straight-line basis over their estimated useful economic life, which is considered to be 7 years.

 

Other intangible assets purchased by the Group are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. Amortisation is recognised so as to write off the cost less their residual values over their useful lives, which is considered to be 3 years straight line.

 

Financial instruments

The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument.

 

Contract liabilities

Contract liabilities comprise payments in advance of revenue recognition and revenue deferred due to contract performance obligation not being completed. They are classified as current liabilities if the contract performance obligations payments are due to be completed within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Contract liabilities are recognised initially at fair value and subsequently at amortised cost.

 

Trade and other receivables

Trade and other receivables are measured at initial recognition at fair value, and subsequently measured at amortised cost using the effective interest method. A provision is established when there is objective evidence that the Group will not be able to collect all amounts due. The amount of any provision is recognised in profit or loss.

 

The Group always recognises lifetime expected credit losses (ECL) for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Group's historical credit loss experience, adjusted for facts that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast director of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

Cash and cash equivalents

Cash and cash equivalents are recognised as financial assets. They comprise cash held by the Group and short-term bank deposits with an original maturity date of three months or less.

Trade payables

Trade payables are initially recognised as financial liabilities measured at fair value, and subsequent to initial recognition measured at amortised cost.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deduction of all its liabilities. Equity instruments issued by the Group are recorded at the proceeds received net of direct issue costs.

 

 

 

Share based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the statement of comprehensive income on a straight-line basis over the vesting period.

 

Non-market vesting conditions are taken into account by adjusting the number of options expected to vest at each statement of financial position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

 

Fair value is calculated using the Black-Scholes model, details of which are given in note 22.

 

Pensions

The pension schemes operated by the Group are defined contribution schemes. The pension cost charge represents the contributions payable by the Group.

 

Property, plant and equipment

Property, plant and equipment are stated at cost net of accumulated depreciation and provision for impairment. Depreciation is provided on all property plant and equipment, at rates calculated to write off the cost less estimated residual value, of each asset on a straight-line basis over its expected useful life. The residual value is the estimated amount that would currently be obtained from disposal of the asset if the asset were already of the age and in the condition expected at the end of its useful economic life.

 

The method of depreciation for each class of depreciable asset is:

 

Office equipment                               - 25% reducing balance

Right-of-Use asset                             - over term of lease

 

Impairment of Assets

Impairment tests on goodwill are undertaken annually at the balance sheet date. The recoverable value of goodwill is estimated on the basis of value in use, defined as the present value of the cash generating units with which the goodwill is associated. This is computed by applying an appropriate discount rate to the estimated value of future cashflows. When value in use is less than the book value, an impairment is recorded and is irreversible.

 

Other non-financial assets are subject to impairment tests whenever circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its estimated recoverable value (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly. Where it is not possible to estimate the recoverable value of an individual asset, the impairment test is carried out on the asset's cash-generating unit. The carrying value of property, plant and equipment is assessed in order to determine if there is an indication of impairment. Any impairment is charged to the statement of comprehensive income. Impairment charges are included under administrative expenses within the consolidated statement of comprehensive income. 

 

Taxation and deferred taxation

            Corporation tax payable is provided on taxable profits at prevailing rates.

 

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from its tax base, except for differences arising on:

·    the initial recognition of goodwill; and

·    the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit.

 

Recognition of deferred tax assets is restricted to those instances where it is probable that future taxable profit will be available against which the asset can be utilised. The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).

 

Taxation and deferred taxation (continued)

Deferred tax assets and liabilities are offset when the Group 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 on either:

·    the same taxable Group company; or

·    different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

 

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Executive Directors, who are responsible for allocating resources and assessing performance of the operating segments.

 

A business segment is a group of assets and operations, engaged in providing products or services that are subject to risks and returns that are different from those of other operating segments.

 

A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments. The Executive Directors assess the performance of the operating segments based on the measures of revenue, profit before taxation and profit after taxation. Central overheads are not allocated to business segments.

 

Government grants

Government grants are recognised when there is reasonable assurance that the grant conditions will

be met and the grants will be received, and are recognised as a separate component of other operating income, rather than being offset against the costs to which they relate.

 

5.         CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

In the application of the Group's accounting policies, which are described in note 4, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on experience and other factors 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The following are the critical judgements and estimations that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

 

 

 

Critical accounting judgements

Impairment of goodwill

Impairment of the valuation of the goodwill relating to the acquisition of cash generating units is considered annually for indicators of impairment to ensure that the asset is not overstated within the financial statements. The annual impairment assessment in respect of goodwill requires estimates of the value in use (or fair value less costs to sell) of cash generating units to which goodwill has been allocated.

 

This requires the Directors to estimate the future cash flows and an appropriate discount factor, in order that the net present value of those cash flows can be determined. Discounted cash flow forecasts give due consideration to the impact of COVID-19 on the future cash flows, and are stress tested under a range of scenarios. In all instances, the headroom is sufficient to satisfy the Directors that there are no indicators of impairment based on circumstances that were present or could be reasonably foreseen at the reporting date.

 

Critical accounting Estimates

Amortisation of intangible assets

The periods of amortisation adopted to write down capitalised intangible assets requires judgements to be made in respect of estimating the useful lives of the intangible assets to determine an appropriate amortisation rate. Development costs (domain names and website costs) are being amortised on a straight-line basis over the period during which the economic benefits are expected to be received, which has been estimated at 3 years. Intangible assets recognised in relation to the brand names are being amortised straight-line over 7 years.

 

Depreciation

The useful economic lives of tangible fixed assets are based on management's judgement and experience. When management identifies that actual useful economic lives differ materially from the estimates used to calculate depreciation, that charge is adjusted retrospectively.

 

Share based payment expense

Non-market performance and service conditions are included in the assumptions about the number of options that are expected to vest. At the end of each reporting period the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to the original estimates, if any, in the consolidated statement of comprehensive income, with a corresponding adjustment to equity.

This requires a judgement as to how many options will meet the future vesting criteria as well as the judgements required in estimating the fair value of the options.

 

IFRS 16 discount rates

The Group estimates an appropriate discount rate based on an incremental rate of borrowing for the calculation of the IFRS 16 right-of-use assets. This requires judgement as to an appropriate discount rate.

 

Provision for bad and doubtful debts

The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar ageing. The expected loss rates are based on the Group's historical credit losses experience over the twelve month period prior to the period end. Forward looking issues have been considered, including in relation to the ongoing impact of the COVID-19 pandemic. This has had an immaterial effect on the expected credit loss rate.

 

6.       SEGMENTAL INFORMATION

 

A segmental analysis of revenue and expenditure is as follows:

 

2021		Entertainment Daily		Mashed Productions	The Tab	Head Office	Total 2021
		£'000		£'000	£'000	£'000	£'000
Revenue		2,463		308	896	-	3,667
Cost of sales		(205)		(171)	(153)	-	(529)
Administrative expenses*		(474)		(86)	(287)	(1,272)	(2,119)
Other operating income		-		-	-	10	10
Adjusted EBITDA			1,784	51	456	(1,262)	1,029
Amortisation		-		-	-	(215)	(215)
Depreciation		-		-	-	(31)	(31)
Share based payments		-		-	-	(143)	(143)
Finance income		-		-	-	1	1
Finance costs		-		-	-	(14)	(14)
Tax		-		-	-	(231)	(231)
		-------------		-------------	------------	-------------	-------------
Profit/(loss) for the year		1,784		51	456	(1,895)	396
		======		======	======	======	======

 

 

6.         SEGMENTAL INFORMATION (continued)

 

2020		Entertainment Daily		Mashed Productions	The Tab	Head Office	Total 2020
		£'000		£'000	£'000	£'000	£'000
Revenue		1,641		334	208	4	2,187
Cost of sales		(307)		(192)	(30)	-	(529)
Administrative expenses*		(447)		(40)	(71)	(819)	(1,377)
Other operating income		-		-	-	24	24
Adjusted EBITDA			887	102	107	(791)	305
Amortisation		-		-	-	(149)	(149)
Depreciation		-		-	-	(30)	(30)
Acquisition costs		-		-	-	(98)	(98)
Capital restructure costs		-		-	-	(29)	(29)
Share based payments		-		-	-	(140)	(140)
Finance costs		-		-	-	(2)	(2)
Tax		-		-	-	(48)	(48)
		-------------		-------------	-------------	-------------	-------------
Profit/(loss) for the year		887		102	107	(1,287)	(191)
		======		======	======	======	======

 

*Administrative expenses exclude depreciation, amortisation, share based payments and acquisition and listing costs.

 

The segmental analysis above reflects the parameters applied by the Board when considering the Group's monthly management accounts.

 

 

	External revenue by location of customer		Total assets by location		Net tangible capital expenditure by location
	31 December 2021 Continuing	31 December 2020 Continuing	31 December 2021	31 December 2020	31 December 2021	31 December 2020
	£'000	£'000	£'000	£'000	£'000	£'000
United Kingdom	1,683	1,024	14,205	13,475	58	-
Europe	665	704	141	103	-	-
Rest of World	1,319	459	366	180	-	-
	-------------	-------------	-------------	--------------	-------------	-------------
	3,667	2,187	14,712	13,758	58	-
	======	======	======	======	======	======

 

 

 

 

 

 

7.	REVENUE
		2021	2020
	Revenue by stream is split:	£'000	£'000
	Advertising	3,667	2,187
		-------------	-------------
		3,667	2,187
Revenue by location is split:
United Kingdom		1,683	1,024
Europe		665	594
Rest of world		1,319	569
		-------------	-------------
		3,667	2,187
		======	======
The Group had three customers whose revenue individually represented 10% or more of the Group's total revenue, being 21.1%, 15.0% and 11.5% respectively.

 

8.	PROFIT/LOSS FROM OPERATIONS
		2021	2020
		£'000	£'000
	This is arrived at after charging/(crediting):
	Continuing operations
	Staff costs (see note 9)	1,584	1,078
	Direct costs of business combinations	-	98
	Depreciation of property, plant & equipment	31	30
	Amortisation of intangible fixed assets	215	149
	Foreign exchange differences	17	(27)
	Government grants	(10)	(24)
		======	======
Auditors' remuneration in respect of the Company		18	18
Audit of the Group and subsidiary undertakings		34	33
Auditors' remuneration - corporate finance fees		-	25
-------------			-------------
52			76
======			======

In 2021, government grants of £10k (2020: £24k) were received as part of the Government's initiatives to provide immediate financial support as a result of the COVID-19 pandemic. There are no future related costs associated with these grants which were received solely as compensation for costs incurred in the year.

 

 

 

 

9.	STAFF COSTS
		2021	2020
		£'000	£'000
	Staff costs for all employees, including Directors consist of:
	Wages and salaries	1,284	838
	Social security costs	101	90
	Pensions	14	10
		-----------	-----------
		1,399	938
	Share based payment charge	143	140
		-----------	-----------
		1,542	1,078
		=====	=====

 

		2021	2020
	The average number of employees of the group during the year was as follows:	Number	Number
	Directors	6	6
	Management and administration	3	3
	Content	20	11
		-----------	-----------
		29	20
		======	======

 

Directors' Detailed Emoluments

 

Details of individual Directors' emoluments for the year are as follows:

	Salary	Consultancy	Bonus	Pension	Total	Total
	2021	2021	2021	2021	2021	2020
	£'000	£'000	£'000	£'000	£'000	£'000
N Burton (resigned 17 February 2021)	3	-	-	-	3	25
J Carter	127	-	*160	1	288	128
J Douglas	127	-	*160	1	288	128
M Higginson	-	25	-	-	25	25
D Joseph	41	-	-	-	41	41
R Miller (resigned 17 February 2021)	3	11	-	-	14	35
M Armitage (resigned 1 July 2021)	13	-	-	-	13	-
P Machray (joined 1 July 2021)	**13	-	-	-	13	-
M Rich (joined 17 February 2021)	***30	-	-	-	30	-
	-----------	-----------	-----------	-----------	-----------	-----------
Total	357	36	320	2	715	382
	=====	=====	=====	=====	=====	=====

 

*100% of net proceeds from bonus payment used to repay the directors company loans.

**annual salary is £25k p.a.

***annual salary is £35k p.a.
 

9.	STAFF COSTS (continued)

 

All pension contributions represent payments into defined contribution schemes.

 

The Executive Directors have service contracts with the Company which are terminable by the Company or relevant director after a fixed term of 12 months followed by 6 months' notice.

 

The Directors' interests in the issued ordinary share capital of the Company was as follows:

 

				Shares of £0.01								Shares of £0.01
Director				31/12/2021								31/12/2020
James Carter			10,908,078		9.4%						10,908,078		9.4%
James Douglas			10,908,078		9.4%						10,908,078		9.4%

Details of the EMI options over the Company's shares held by the directors are as follows:

 

	Type of Option	Options held at 31 December 2021	Exercise price £	Date of grant	Exercise period
James Carter	EMI option	1,504,404	0.14	28 February 2019	28 February 2022
James Douglas	EMI option	1,504,404	0.14	28 February 2019	28 February 2022

 

In addition, effective options in Digitalbox plc exist due to three directors having warrants in its subsidiary company, Digitalbox Publishing (Holdings) Limited, which, when exercised, are satisfied by issuing shares in Digitalbox plc.

 

These are set out in the table, below;

'Effective Option' Holder	Number of Shares
James Carter	681,958
Jim Douglas	681,958
Martin Higginson	1,590,936
	2,954,852

 

The warrants had vested prior to admission onto AIM on 28 February 2019 and carry an effective exercise price of 2.28 pence per share issued in Digitalbox plc.

 

On 16 February 2022 Martin Higginson exercised his warrants in full. This is noted as a post balance sheet event at note 27.

 

Further information on share options is included in note 22.

 

The market price of the shares at 31 December 2021 was 8.70p with a quoted range from throughout 2021 of 5.25p to 9.25p. The EMI options vest based on performance criteria detailed in note 22.

 

10.	FINANCE COSTS
		2021	2020
		£'000	£'000
	Interest on lease liabilities	2	1
	Bank charges and interest payable	-	1
	Interest on bank loans	12	-
		------------	------------
		14	2
		======	======

 

11.	TAXATION ON PROFIT/LOSS FROM ORDINARY ACTIVITIES
		2021	2020
		£'000	£'000
	Corporation tax - current period	165	50
	Corporation tax - adjustment in respect of prior periods	24	12
	Deferred tax - current period	27	(14)
	Deferred tax - adjustments in respect of prior periods	15	-
		------------	------------
	Tax credit/(charge) for the year	231	48
		======	======

The tax assessed for the year differs from the standard rate of corporation tax in the UK applied to loss before tax.

 

		2021	2020
		£'000	£'000
	Total profit/(loss) on ordinary activities before tax	627	(143)
		------------	------------
	Profit/(loss) on ordinary activities at the standard rate of corporation tax in the UK of 19% (2020: 19%)	119	(27)
	Effects of:
	Expenses not deductible for tax purposes	30	46
	Income not taxable	-	(1)
	Adjustments to prior periods	39	15
	Deferred tax not recognised - loss relief in current period	(23)	-
	Effect of changes in tax rates on deferred tax	66	15
		-------------	-----------
	Tax credit for the year	231	48
		======	======

 

In the Budget on 3 March 2021, the Chancellor announced the intention to increase the main rate of UK corporation tax to 25% for the financial year beginning 1 April 2023. This was substantively enacted on 24 May 2021. Deferred tax at the balance sheet date has therefore been measured using the newly enacted tax rate of 25% (2020: 19%) in these financial statements.

There were unused tax losses at 31 December 2021 amounting to £3,434k. In the majority, these were restricted for use for 5 years against future taxable profits arising from the trade formerly carried on in Tab Media Limited and now carried on in Digitalbox Publishing Limited. No deferred tax asset has been recognised owing to materiality in the short term.

12	EARNINGS PER SHARE
		2021	2020
		£'000	£'000
	The earnings per share is based on the following:
	Continuing earnings post tax attributable to shareholders	396	(191)
		==========	===========
	Basic weighted average number of shares	116,332,457	96,425,598
	Diluted weighted average number of shares	118,297,010	96,425,598
		==========	===========
	Basic earnings per share (£)	0.00340	(0.00198)
	Diluted earnings per share (£)	0.00335	(0.00198)
		==========	==========

 

Earnings/(Loss) per ordinary share has been calculated using the weighted average number of shares in issue during the relevant financial periods. IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease earnings per share or increase the loss per share. The exercise price of the outstanding share options has been tracked against the quoted share price of the business from time to time during the year, and taken into account in the calculation of diluted EPS. 

 

 

 

13.	TANGIBLE FIXED ASSETS
				IFRS 16 Right-of-Use Asset		Office equipment			Total
				£'000		£'000			£'000
	Cost
	Balance at 1 January 2020 and 1 January 2021			33			27			60
	Additions			56			2			58
	Disposals			(33)			-			(33)
				---------			---------			---------------
	Balance at 31 December 2021			56			29			85
				---------			---------			---------------
	Accumulated depreciation
	Balance at 1 January 2020			8		3			11
	Depreciation charge			23		7			30
				---------		---------			---------------
	Balance at 1 January 2021			31		10			41
	Depreciation charge			27		4			31
	Depreciation eliminated on disposal			(33)		-			(33)
				---------		---------			---------------
	Balance at 31 December 2021			25		14			39
				---------		---------			---------------
	Net Book Value
	At 31 December 2021			31		15			46
				=====		=====			=====
	At 31 December 2020			2		17			19
				=====		=====			=====
	At 31 December 2019			25		24			49
				=====		=====			=====

 

The net book value of owned and leased assets included as "Property, plant and equipment" in the Statement of Financial Position is as follows:

 

		2021 £'000	2020 £'000
	Tangible fixed assets owned	15	17
	Right-of-Use tangible fixed assets	31	2
		---------	---------
		46	19

 

Information about the Right-of-Use assets is summarised below:

 

	Net Book Value	2021 £'000	2020 £'000
	Property	31	2
		---------	---------
		31	2
		=====	=====

 

 

 

Depreciation charge in respect of the Right-of-Use asset is as follows:

 

					2021 £'000		2020 £'000
		Property			27		23
					---------		---------
					27		23
					=====		=====
14.	INTANGIBLE FIXED ASSETS		Goodwill	Other		Development		Total
	GROUP		Arising on	Intangible		costs
			Consolidation	Assets
			£'000	£'000		£'000		£'000
	Cost
	Balance at 1 January 2020		9,492	854		35		10,381
	Additions		118	622		-		740
			-----------	-----------		-----------		---------------
	Balance at 1 January 2021		9,610	1,476		35		11,121
	Additions		-	-		86		86
			-----------	-----------		-----------		---------------
	Balance at 31 December 2021		9,610	1,476		121		11,207
			-----------	-----------		-----------		---------------
	Accumulated amortisation
	Balance at 1 January 2020		-	102		31		133
	Amortisation		-	145		4		149
			-----------	-----------		-----------		---------------
	Balance at 1 January 2021		-	247		35		282
	Amortisation		-	211		4		215
			-----------	------------		------------		---------------
	Balance at 31 December 2021		-	458		39		497
			------------	------------		------------		---------------
	Net Book Value
	At 31 December 2021		9,610	1,018		82		10,710
			======	======		======		======
	At 31 December 2020		9,610	1,229		-		10,839
			======	======		======		======
	At 31 December 2019		9,492	752		4		10,248
			======	======		======		======

 

Amortisation is charged to administrative expenses in the Statement of Comprehensive Income.

 

GOODWILL AND IMPAIRMENT
The carrying value of goodwill in respect of each cash generating unit is as follows:
						31 December 2021	31 December 2020
						£'000	£'000
Digitalbox Publishing (Holdings) Limited						9,171	9,171
Mashed Productions Limited						321	321
Tab Media Limited						118	118
						-------------	-------------
						9,610	9,610
						======	=======

The Group is obliged to test goodwill annually for impairment, or more frequently if there are indications that goodwill and indefinite life intangibles might be impaired, due to the goodwill deemed to have an indefinite useful life. In order to perform this test, management is required to compare the carrying value of the relevant cash generating unit ("CGU") including the goodwill with its recoverable amount. The recoverable amount of the CGU is determined from a value in use calculation. It is considered that any reasonably possible changes in the key assumptions would not result in an impairment of the present carrying value of the goodwill.

 

Digitalbox Publishing (Holdings) Limited

The recoverable amount of Digitalbox Publishing (Holdings) Limited relates to the Entertainment Daily segment and has been determined from a review of the current and anticipated performance of this unit. In preparing this projection, a discount rate of 7% has been used based on the weighted average cost of capital and a future growth rate of 3% has been assumed. It has been assumed investment in capital equipment will equate to depreciation over the year. The discount rate was based on the Group's cost of capital as estimated by management. After applying sensitivity analysis in respect of the results and future cash flows, in particular for presumed growth rates and discount rates, management is satisfied that it is highly improbable that such a change in key assumptions would reduce the recoverable amount below book value.

 

Mashed Productions Limited

The recoverable amount of Mashed Productions Limited has been determined with reference to the trade and assets hived across to Digitalbox Publishing Limited in the prior year, which continues to benefit from cash inflows through Mashed Productions. The recoverable amount has been determined from a review of the current and anticipated performance of this unit. In preparing this projection, a discount rate of 7% has been used based on the weighted average cost of capital and a future growth rate of 3% has been assumed. It has been assumed investment in capital equipment will equate to depreciation over the year. The discount rate was based on the Group's cost of capital as estimated by management. After applying sensitivity analysis in respect of the results and future cash flows, in particular for presumed growth rates and discount rates, management is satisfied that it is highly improbable that such a change in key assumptions would reduce the recoverable amount below book value.

 

Tab Media Limited

The recoverable amount of the Tab Media segment, which was hived up from Tab Media Limited to Digitalbox Publishing Limited on 1 October 2020, has been determined from a review of the current and anticipated performance of this unit. In preparing this projection, a discount rate of 7% has been used based on the weighted average cost of capital and a future growth rate of 3% has been assumed. It has been assumed investment in capital equipment will equate to depreciation over the year. The discount rate was based on the Group's cost of capital as estimated by management. After applying sensitivity analysis in respect of the results and future cash flows, in particular for presumed growth rates and discount rates, management is satisfied that it is highly improbable that such a change in key assumptions would reduce the recoverable amount below book value.

15.	TRADE AND OTHER RECEIVABLES				31 December 2021	31 December 2020
					£'000	£'000
	Trade receivables				1,428	758
	Prepayments and accrued income				104	42
	Other receivables				238	247
					-------------	-------------
					1,770	1,047
					======	======
16.	CASH AND CASH EQUIVALENTS				31 December 2021	31 December 2020
					£'000	£'000
	Cash at bank and in hand				2,186	1,853
					-------------	-------------
					2,186	1,853
					======	======
17.	LIABILITIES				31 December 2021	31 December 2020
					£'000	£'000
	Current liabilities
	Trade payables				86	84
	Social security and other taxes				144	209
	Accruals				508	146
	Lease liabilities				29	2
	Other payables				1	10
	Bank loans				112	25
	Corporation tax payable				163	51
					-------------	-------------
					1,043	527
					======	======
	Non-current liabilities
	Lease liabilities				2		-
	Bank loans				319		465
					------------		------------
					321		465
					======		======

 

 

18.	LOANS			31 December 2021	31 December 2020
				£'000	£'000
	Bank loans
	Due in less than one year			112	25
	Due in between one and two years			122	122
	Due in between two and five years			197	343
				-------------	-------------
				431	490
				======	======

On 7 October 2020, Digitalbox Publishing Limited drew down a loan facility amounting to £450k under the CBILS scheme. The present value of the loan at inception discounted at a market rate of interest was £440k. The loan is for a term of five years and is repayable in equal monthly instalments which commenced in 2021. Interest is charged at a fixed rate of 2.43% per annum, with the cost being fully subsidised by central Government for the first 12 months. The loan is secured by a debenture over the assets of the Digitalbox Publishing Limited and a £450k guarantee granted by Digitalbox plc. The outstanding balance at 31 December 2021 was £431k (2020: £440k).

 

Tab Media Limited had an outstanding loan amounting to £50k at 31 December 2020. This loan was repaid in full during the year.

 

 

19.	DEFERRED TAX
			Total
			£'000
	Balance at 1 January 2021		232
	Deferred tax charge for the year		43
			-------------
	Balance at 31 December 2021		275
			=======

 

The deferred tax provision comprises:			31 December 2021	31 December 2020
			£'000	£'000
Intangible asset timing differences			275	232
			-------------	-------------
			275	232
			======	======
The expected net reversal of deferred tax in 2022 is £53k.

 

 

 

20.  FINANCIAL RISK MANAGEMENT

 

The Group is exposed to risks that arise from its use of financial instruments. These financial instruments are within the current assets and current liabilities shown on the face of the statement of financial position and comprise the following:

 

Credit risk

 

The Group is exposed to credit risk primarily on its trade receivables. The Group maintains its cash reserves at a reputable bank. It is group policy to assess the credit risk of each new customer before entering into binding contracts.

 

The maximum exposure to credit risk is represented by the carrying value in the statement of financial position. The credit risk on liquid funds is low as the funds are held at a bank with a high credit rating assigned by international credit agencies.

 

				31 December 2021	31 December 2020
				£'000	£'000
	Current financial assets
	Trade receivables			1,428	758
	Other receivables			238	247
	Cash and cash equivalents			2,186	1,853
				-------------	-----------
				3,852	2,858
				======	======

 

The table below illustrates the due date of trade receivables:

				31 December 2021	31 December 2020
				£'000	£'000
	Current			577	278
	31 - 60 days			421	265
	61 - 90 days			267	202
	91 - 120 days			126	10
	121 and over			37	3
				-------------	-----------
				1,428	758
				======	======

 

The table below illustrates the geographical location of trade receivables:

				31 December 2021	31 December 2020
				£'000	£'000
	United Kingdom			921	475
	Europe			141	180
	Rest of world			366	103
				-------------	-----------
				1,428	758
				======	======

 

The directors have considered expected credit losses under IFRS9 and have adopted the simplified approach to their evaluation as the Group has limited exposure to them. The Directors have provided for expected credit losses on a specific basis and this has led to the Group carrying a provision against trade debtors of £28k (2020: £21k).

      

       Liquidity risk

Liquidity risk arises from the Group's management of working capital and the finance charges and repayments of its liabilities.

 

The Group's policy is to ensure that it will have sufficient cash to allow it to meet its liabilities when they become due and so cash holdings may be high during certain periods throughout the period.

      

The Group's policy in respect of cash and cash equivalents is to limit its exposure by reducing cash holding in the operating units and investing amounts that are not immediately required in funds that have low risk and are placed with a reputable bank.

 

Cash at bank and cash equivalents

				31 December 2021	31 December 2020
				£'000	£'000
	At the year end the Group had the following cash balances:			2,186	1,853
				======	======

 

Cash at bank comprises Sterling and US Dollar cash deposits.

All monetary assets and liabilities within the group are denominated in the functional currency of the operating unit in which they are held. All amounts stated at carrying value equate to fair value.

					31 December 2021 £'000	31 December 2020 £'000
Financial liabilities at amortised cost
Trade payables					86	84
Accruals					508	147
Lease liabilities					31	2
Bank loans					431	490
Other payables					1	10
					----------------	----------------
					1,057	733
					======	======

 

The table below illustrates the maturities of trade payables:

				31 December 2021 £'000	31 December 2020 £'000
	Current			45	69
	31 - 60 days			28	5
	61 - 90 days			12	-
	91 - 120 days			-	-
	121 and over			1	10
				----------------	---------------
				86	84
				========	========

The table below shows the maturities of financial liabilities:

 

	2021			Carrying amount	6 months or less	6-12 months	1 or more year
				£'000	£'000	£'000	£'000
	Trade payables			86	85	1	-
	Accruals			508	508	-	-
	Lease liabilities			31	14	15	2
	Loans			431	56	56	319
	Other payables			1	1	-	-
				----------------	---------------	---------------	---------------
				1,057	664	72	321
				========	========	========	========
	2020			Carrying amount	6 months or less	6-12 months	1 or more year
				£'000	£'000	£'000	£'000
	Trade payables			84	84	-	-
	Accruals			147	142	5	-
	Lease liabilities			2	2	-	-
	Loans			490	-	25	465
	Other payables			10	10	-	-
				----------------	---------------	---------------	---------------
				733	238	30	465
				========	========	========	========

 

       Capital Disclosures and Risk Management

 

       The Group's management define capital as the Group's equity share capital and reserves.

 

The Group's objective when maintaining capital is to safeguard its ability to continue as a going concern, so that in due course it can provide returns for shareholders and benefits for other stakeholders.

 

The Group manages its capital structure and makes adjustments to it in the light of changes in the business and in economic conditions. In order to maintain or adjust the capital structure, the Group may from time to time issue new shares, based on working capital and product development requirements and current and future expectations of the Company's share price.

 

Share capital is used to raise cash and as direct payments to third parties for assets or services acquired.

 

Market risk

Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group considers the interest rates available when deciding where to place cash balances.

 

Foreign currency risk

Foreign exchange transaction risk arises when individual Group operations enter into transactions denominated in a currency other than the functional currency. The principal risk arises from the Group's US based subsidiary, Digitalbox Inc. The general policy for the Group is to sell to customers in the same currency that services or goods are purchased in, reducing the transactional risk.

 

 

21.	SHARE CAPITAL		No.		Value		No.	Value
		31 December 2021		£'000		31 December 2020			£'000
	Called up share capital
	Allotted, called up and fully paid
	Ordinary shares of £0.01 each	116,332,457		1,163		116,332,457			1,163
		------------		------------		----------			------------
		116,332,457		1,163		116,332,457			1,163
		======		======		======			======

 

22.	SHARE BASED PAYMENTS
	During the year, the Group incurred a £143k share based payment charge (2020: £140k). Of this total, £100k (2020: £101k) was recorded as an expense in Digitalbox plc and £43k (2020: £39k) was recorded as an expense in Digitalbox Publishing Limited.
	2021 No. of share options Weighted average exercise price 2020 No. of share options Weighted average exercise price               Outstanding at beginning of year 8,298,757 8.19p 8,298,757 9.94p   Granted during the year 1,002,906 6.00p 2,005,812 6.75p   Cancelled during the year - - (2,005,812) 14.00p   Expired during the year (160,000) 20.00p - -     Outstanding at the end of the year 9,141,663 7.74p 8,298,757 8.19p     169,285 options relate to Warrants and are exercisable 1 year after admission. 6,017,526 options are exercisable after 3 years, or an exit event. 2,954,852 options relate to Warrants issued prior to the group's admission by Digitalbox Publishing (Holdings) Limited, a subsidiary of the company. These are exercisable upon the exercise of those warrants in a share for share exchange arrangement, under which the company acquires all shares issued in Digitalbox Publishing (Holdings) Limited and in consideration, issues shares to the warrant holders.   A Black-Scholes model has been used to determine the fair value of the share options on the date of grant. The fair value is expensed to the income statement on a straight-line basis over the vesting period, which is determined annually.  The model assesses a number of factors in calculating the fair value.  These include the market price on the date of grant, the exercise price of the share options, the expected share price volatility of the Company's share price, the expected life of the options, the risk-free rate of interest and the expected level of dividends in future periods.       For those options granted during the year where IFRS 2 "Share-Based Payment" is applicable, the fair values were calculated using the Black-Scholes model.  The inputs into the model were as follows:       Risk free rate Share price volatility Share price at date of grant   24 February 2021 0.10% 65.00% 6.00p
	Expected volatility was determined by calculating the historical volatility of the Company's share price for 12 months prior to the date of grant.  The expected life used in the model is the term of the options.

23.  RESERVES

 

Full details of movements in reserves are set out in the consolidated statement of changes in equity. The following describes the nature and purpose of each reserve within owners' equity:

 

Share premium: Amount subscribed for share capital in excess of nominal value.

 

Retained earnings: Cumulative net gains and losses recognised in the consolidated statement of comprehensive income.

 

Share based payment reserve: Cumulative charges recognised in the consolidated statement of comprehensive income in relation to share based payments.

 

24.	LEASING COMMITMENTS
	Group as a lessee
	The Group leasing arrangements for their head office.
	Lease liabilities are due as follows:
		31 December 2021	31 December 2020
		£'000	£'000
	Current	29	2
	Non-current	2	-
		-------------	-------------
		31	2
		=====	=====
	Contractual undiscounted cash flows are due as follows:
		31 December 2021	31 December 2020
		£'000	£'000
	Current	30	2
	Non-current	3	-
		-------------	-------------
		33	2
		=====	=====
	There is not considered to be any significant liquidity risk by the Group in respect of leases.
	The following amounts in respect of leases, where the Group is a lessee, have been recognised in the profit or loss:
		31 December 2021	31 December 2020
		£'000	£'000
	Interest expense on lease liabilities	2	1
	Expenses relating to short-term leases	29	24
		-------------	-------------
		31	25
		=====	=====

25.     CAPITAL COMMITMENTS

 

At 31 December 2021 and 31 December 2020 there were no capital commitments.

 

 

26.     RELATED PARTY TRANSACTIONS

 

At 31 December 2021, the Group was due £171k (2020: £171k) from James Carter and Jim Douglas, two Directors of the company. Prior to the readmission of Digitalbox plc (formerly Polemos plc) onto AIM, and its subsequent acquisition of Digitalbox Publishing Holdings Ltd, James Carter and Jim Douglas each bought shares in Digitalbox Publishing Holdings Ltd using a company loan. The outstanding balance is split equally between the directors and is included within trade and other receivables. The amounts are repayable either on sale of shares by the Directors, by prior charge over the proceeds of dividends or distributions due to the directors' net of tax or by prior charge over remuneration payments in excess of a pre-determined level. Interest is charged at 0.75% per annum. The Directors have chosen to use the entirety of their 2021 bonus payments to pay off the loans in full which results in a positive cash return to the balance sheet.

 

During the year, Integral 2 Limited billed £53k (2020: £57k) to the Group, a company related by virtue of David Joseph, a member of key management personnel, having control over the entity. As at 31 December 2021, £5k (2020: £5k) was owed to Integral 2 Limited.

 

During the year, the Group received revenue of £nil (2020: £1.5k) from Immotion Group Plc, a company related by virtue of Martin Higginson being a member of key management personnel of both entities. As at 31 December 2021, £nil (2020: £nil) was owed to the Group.

 

During the year, M Capital Investment Partners (Holdings) Limited billed £23k (2020: £25k) to the Group, a company related by virtue of Martin Higginson, a member of key management personnel, having control over the entity. The Group accrued a further £2.0k for unbilled costs as at 31 December 2021 (2020:Nil). As at 31 December 2021, £2.5k (2020: £2.5k), was owed to M Capital Investment Partners (Holdings) Limited.

 

During the year, Robin Miller Consultants Limited billed £11k (2020: £17k) to the Group, a company related by virtue of Robin Miller, a member of key management personnel for part of the year, having control over the entity. As at 31 December 2021, £1.7k (2020: £1.7k), was owed to Robin Miller Consultants Limited. The balances stated here were for transactions up to the point that Robin Miller resigned as a director and was therefore no longer a related party.

 

The key management personnel are considered to be the Board of Directors. Their remuneration is disclosed in detail in note 9. Key management were remunerated £715k in the year ended 31 December 2021 (2020: £382k).

 

The key management personnel have been provided with a total of 5,963,660 share options resulting in a charge of £100k in the period (2020: £100k).

 

 

27.       POST BALANCE SHEET EVENT

 

On 16 February 2022, Martin Higginson exercised his warrants over 7,085 shares in Digitalbox Publishing (Holdings) Limited which were satisfied by the issuance of 1,590,936 shares in Digitalbox plc in accordance with a Warrant Acquisition Agreement dated 7 February 2019 under which Digitalbox plc acquires all such warrant shares. Accordingly, Digitalbox plc's issued share capital increased to 117,923,393 shares. The consideration received by the company amounted to £36,275.
 

COMPANY STATEMENT OF FINANCIAL POSITION  FOR THE YEAR ENDED 31 DECEMBER 2021
			At 31 December 2021   £'000		At 31 December 2020 As restated £'000
Fixed assets
Investments	III		11,127		11,084
			-----------------		-----------------
			11,127		11,084
Current assets
Trade and other receivables	IV		1,747		1,244
Cash and cash equivalents	V		20		99
			-----------------		-----------------
			1,767		1,343
Current liabilities
Trade and other payables	VI		(467)		(68)
			----------------		----------------
Total current liabilities			(467)		(68)
Non-current liabilities
Other payables			-		-
			----------------		----------------
Total liabilities			(467)		(68)
Net current assets/(liabilities)			1,300		1,275
			---------------		---------------
Total assets less total liabilities			12,427		12,359
			=======		=======
Capital and reserves
Called up share capital	VII		1,163		1,163
Share premium account	IX		11,149		11,149
Share-based payment reserve	IX		464		321
Retained reserves	IX		(349)		(274)
			------------------		------------------
Shareholders' funds			12,427		12,359
			=========		=========

  

   The Company has taken advantage of the exemptions allowed under section 408 of the Companies Act 2006 and has not presented its income statement in these financial statements. The Group loss for the year included a loss on ordinary activities after tax of £75k (2020: £135k loss as restated) in respect of the Company which is dealt with in the financial statements of the Parent Company.

 

   The financial statements were approved by the Board and authorised for issue on 28 March 2022.

 

   James Carter                                                             David Joseph

CEO                                                                            CFO

 

 

Company registration number: 04606754

 

 

COMPANY STATEMENT OF CHANGES IN EQUITY  FOR THE YEAR ENDED 31 DECEMBER 2021
	Share Capital	Share Premium			Share-based payment		Retained reserves		Total
	£'000	£'000			£'000		£'000		£'000
Balance at 1 January 2020	21,331		29,757		181		(40,122)		11,147
Prior year adjustment	-			-	-	55		55
	-------------			-------------	-------------	-------------		-------------
Balance at 1 January 2020 as restated	21,331			29,757	181	(40,067)		11,202
Issue of shares	260			976	-	-		1,236
Share issue costs	-			(84)	-	-		(84)
Capital reduction	(20,428)			(19,500)	-	39,928		-
Loss after tax (restated)	-			-	-	(135)		(135)
Share-based payments	-			-	140	-		140
	-------------			-------------	-------------	-------------		-------------
31 December 2020 as restated	1,163			11,149	321	(274)		12,359
	-------------			--------------	-------------	-------------		-------------
Loss after tax	-			-	-	(75)		(75)
Share-based payments	-			-	143	-		143
	-------------			--------------	--------------	--------------		--------------
31 December 2021	1,163			11,149	464	(349)		12,427
	-------------			--------------	-------------	-------------		-------------

 

NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

 

 

I.         ACCOUNTING POLICIES

 

The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by the Act the separate financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

 

The company has taken advantage of the following disclosure exemptions under FRS 101:

·    the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment

·    the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64 (o)(ii), B64(p), B64(q)(ii), B66 and B67of IFRS 3 Business Combinations;

·    the requirements of IFRS 7 Financial Instruments: Disclosures;

·    the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers;

·    the requirements of paragraph 58 of IFRS 16, provided that the disclosure of details of indebtedness required by paragraph 61(1) of Schedule 1 to the Regulations is presented separately for lease liabilities and other liabilities, and in total;

·    the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of: (i) paragraph 79(a) (iv) of IAS 1, (ii) paragraph 73(e) of IAS 16 Property Plant and Equipment and (iii) paragraph 118 (e) of IAS 38 Intangibles Assets

·    the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 40A to 40D ,111 and 134-136 of IAS 1 Presentation of Financial Statements;

·    the requirements of IAS 7 Statement of Cash Flows;

·    the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;

·    the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures; and

·    the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

 

Where required, equivalent disclosures are given in the group financial statements of Digitalbox plc.

 

The principal accounting policies adopted are the same as those set out in note 4 to the consolidated financial statements except as noted below:

                       

            Valuation of investments

Investments in subsidiaries are stated at cost less any provision for impairment in value.

 

 

II.         OPERATING PROFIT

The auditor remuneration for audit and other services is disclosed in note 8 to the consolidated financial statements.

 

The average number of employees of the company during the year was 5 (2020: 6) and total staff costs were £815k (2020: £382k). Directors remuneration is disclosed in note 9 to the consolidated financial statements.

 

The operating loss in the prior year is stated after charging an impairment loss on the investment in Mashed Productions Limited amounting to £238k. This impairment loss is reflective of the receipt of dividend income from this subsidiary amounting to £238k, which was subsequently dissolved on 10 March 2020 following an earlier hive across of trade to Digitalbox Publishing Limited. The impairment arose owing to the realisation of the distributable reserves, and these two transactions have had a net £nil effect on the result for the prior year. These transactions had no effect on the operating profit in the current year.

 

 

III.	FIXED ASSET INVESTMENTS		31 December 2021
			£'000
	Subsidiary undertakings
	Cost
	Balance at 1 January 2021		11,228
	Prior year adjustment		94
			--------------
	Balance at 1 January 2021 as restated		11,322
	Additions		43
	Disposals		-
			--------------
	Balance at 31 December 2021		11,365
	Provisions
	Balance at 1 January 2021		238
	Charge for the year		-
			--------------
	Balance at 31 December 2021		238
			--------------
	Carrying value of investments		11,127
			=======

The investment addition relates to equity settled share based payments issued to employees of the company's subsidiary, Digitalbox Publishing Limited, as disclosed in Note 22 to the consolidated financial statements.

 

At the year end the Company had the following subsidiaries:

 

Subsidiary name		Class of shares		Proportion of ownership	Registered office
Digitalbox Publishing Limited		Ordinary		100% Indirect	2-4 Henry Street, Bath, BA1 1JT
Digitalbox Inc		Ordinary		100% Direct	19 Courtland Drive, Hudson, MA 01749
Digitalbox Publishing (Holdings) Limited		Ordinary		100% Direct	2-4 Henry Street, Bath, BA1 1JT
Tab Media Limited		Ordinary		100% Indirect	Jubilee House, 92 Lincoln Road, Peterborough, PE1 2SN
Subsidiary name			Principal activity
Digitalbox Publishing Limited			Sale of digital advertising space
Digitalbox Inc			Sale of digital advertising space
Digitalbox Publishing (Holdings) Limited			Holding company
Tab Media Limited			Dormant company

 

IV.	RECEIVABLES: due within one year		31 December  2021	31 December  2020
			£'000	£'000
	Amounts owed by group undertakings		1,636	1,213
	Other receivables		-	10
	Prepayments and accrued income		52	21
			------------	------------
			1,688	1,244
			=====	=====

 

V.       CASH AND CASH EQUIVALENTS

 

						31 December 2021		31 December 2020
						£'000		£'000
Cash at bank and in hand						20		99
						-------------		-------------
						20		99
						======		======
VI.	PAYABLES: amounts falling due within one year
							31 December  2021	1 December  2020
							£'000	£'000
	Trade payables						29	5
	Accruals						403	38
	Corporation tax payable						18	-
	Other tax and social security						16	16
	Other payables						1	9
							------------	------------
							467	68
							======	======

VII.      SHARE CAPITAL

           

   Details of the Company's share capital can be found in Note 21 to the consolidated financial statements.

 

 

VIII.     SHARE OPTIONS

       

Share Option Scheme

 

Details of the share options outstanding at 31 December 2021 can be found in Note 22 to the consolidated financial statements.

 

IX.       RESERVES

       

Details of the reserves can be found in Note 23 to the Consolidated financial statements.

 

 

 

X.        RELATED PARTY TRANSACTIONS

 

Details of the Company's related party transactions can be found in Note 26 to the consolidated financial statements.

 

 

XI. PRIOR PERIOD ADJUSTMENT 

 

Certain employees of the company's subsidiary, Digitalbox Publishing Limited, have been granted rights to equity instruments in the company in consideration for services provided to its

subsidiary. The associated share based payment charge has been recorded in the financial statements of the company, but instead should have been recorded as an expense in the subsidiary's financial statements.

 

As a result, at 1 January 2020 the investment in the subsidiary has been increased by £55k by increasing retained earnings by the same amount. The loss for the year ended 31 December 2020 has decreased by £39k, with a corresponding increase in the investment in the subsidiary.

 

The consolidated financial statements and accordingly earnings per share are unaffected by this error and the associated correction. The impact on the financial statements is analysed below. 

 

 

 

 XI. PRIOR PERIOD ADJUSTMENT (continued)

  

	At 1 January 2020				At 31 December 2020
	Previously reported £'000	Prior year adjustment £'000	As restated £'000		Previously reported £'000	Prior year adjustment £'000	As restated £'000
Fixed assets
Investments	11,192	55	11,247		10,990	94	11,084
Current assets
Trade and other receivables	155	-	155		1,244	-	1,244
Cash and cash equivalents	22	-	22		99	-	99
	1,343	-	1,343		1,343	-	1,343
Current liabilities
Trade and other payables	(214)	-	(214)		(68)	-	(68)
Total current liabilities	(214)	-	(214)		(68)	-	(68)
	At 1 January 2020				A 31 December 2020
	Previously reported £'000	Prior year adjustment £'000	As restated £'000		Previously reported £'000	Prior year adjustment £'000	As restated £'000
Non-current liabilities
Other payables	(8)	-	(8)		-	-	-
Total liabilities	(222)	-	(222)		(68)	-	(68)
Net current assets/(liabilities)	(37)	-	(37)		1,275	-	1,275
Total assets less total liabilities	11,147	55	11,202		12,265	94	12,359
Capital and reserves
Called up share capital	21,331	-	21,331		1,163	-	1,163
Share premium account	29,757	-	29,757		11,149	-	11,149
Share-based payment reserve	181	-	181		321	-	321
Retained reserves	(40,122)	55	(40,067)		(368)	94	(274)
Shareholders' funds	11,147	55	11,202		12,265	94	12,359