REG - dotDigital Group plc - Final Results <Origin Href="QuoteRef">DOTD.L</Origin> - Part 2
13/10/2015 07:00
- Part 2: For the preceding part double click ID:nRSM0296Ca
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
1. GENERAL INFORMATION
dotdigital Group Plc ("dotdigital") is a company incorporated in England and Wales and quoted on the AIM Market. The
address of the registered office is disclosed on the inside back cover of the financial statements.
2. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by
the European Union (IFRS's as adopted by the EU) and those parts of Companies Act 2006 applicable to companies reporting
under IFRS. The financial statements have been prepared under the historical cost convention.
The Group has applied all accounting standards and interpretations issued by the International Accountancy Standards Board
and International Accounting Interpretations Committee effective at the time of preparing the financial statements.
New and amended standards adopted by the Group
There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on or
after 1 July 2014 that would be expected to have a material impact on the Group.
Standards, interpretations and amendments to published standards that are not yet effective
The following new standards, amendments to standards and interpretations have been issued, but are not effective for the
financial year beginning 1 July 2014 and have not been early adopted:
Reference Title Summary Application date of standard (Periods commencing on or after)
IFRS 14 Regulatory deferral accounts Aims to enhance the comparability of financial reporting by entities subject to rate-regulations 1 January 2016
IFRS 15 Revenue from contracts with customers Specifies how and when to recognise revenue from contracts as well as requiring more information and relevant disclosures. 1 January 2017
Amendments to IFRS 11 Joint arrangements On acquisitions of interest in joint operations 1 January 2016
Amendments to IAS 16 and IAS 41 IAS 16: Property plant and equipment and IAS 41: Agriculture On Bearer plants 1 January 2016
Amendments to IAS 16 and IAS 38 Intangible Assets Clarification of acceptable methods of depreciation and amortization 1 January 2016
Amendments to IAS 27 Separate financial statements Equity method in separate financial statements 1 January 2016
Amendments to IFRS 10 and IAS 28 IFRS 10:Consolidated financial and IAS 28: Investments in Associates Investment entities: Applying the consolidation exception 1 January 2016
Amendments to IFRS 10 and IAS 28 IFRS 10:Consolidated financial and IAS 28: Investments in Associates Sale or contribution of assets between an investor and its associate or joint venture 1 January 2016
Amendments to IAS 1 Presentation of Financial statements Disclosure initiative 1 January 2016
Improvements to IFRS 5 Non current assets held for sale and discontinued operations Methods of disposal 1 January 2016
Improvements to IFRS 7 Financial instruments Disclosures on servicing contracts and interim financial statements 1 January 2016
Improvements to IAS 19 Employee benefits Determining the discount rates for post-employment obligations 1 January 2016
Improvements to IAS 34 Interim financial reporting Information disclosed elsewhere in the interim financial report 1 January 2016
IFRS 9 Financial instruments Requirements on the classification and measurement of financial assets and liabilities and includes an expected credit losses model which replaces the current incurred loss impairment model. Also includes the hedging amendment that was issued in 2013 1 January 2018
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material
impact on the financial statements of the Group. The Group does not intend to apply any of these pronouncements early.
The financial statements are presented in sterling (£), rounded to the nearest thousand pound.
Basis of consolidation
In the period ended 2009 the Company acquired via a share for share exchange the entire issued share capital of dotmailer
Limited, whose principle activity is that of web and email based marketing.
Under IFRS 3 'Business combinations' the dotmailer Limited share exchange has been accounted for as a reverse acquisition.
Although these consolidated financial statements have been issued in the name of the legal parent, the company it
represents in substance is a continuation of the financial information of the legal subsidiary, dotmailer Limited. The
following accounting treatment has been applied in respect of the reverse acquisition:
- The assets and liabilities of the legal subsidiary, dotmailer Limited are recognised and measured in the consolidated
financial statements at their pre combination carrying amounts, without restatement to their fair value;
- The retained reserves recognised in the consolidated financial statements for the beginning of the prior period reflect
the retained reserves of dotmailer Limited to 30 April 2008. However, in accordance with IFRS3 'Business combinations' the
equity structure appearing in the consolidated financial statements reflects the equity structure of the legal parent
dotdigital Plc, including the equity instruments issued under the share exchange to effect the business combination;
- A reverse acquisition reserve has been created to enable the presentation of a consolidated balance sheet which combines
the equity structure of the legal parent with the non statutory reserves of the legal subsidiary;
- Comparative numbers are prepared on the same basis.
The following accounting treatment has been applied in respect of the acquisition of dotdigital Plc:
- The assets and liabilities of dotdigital are recognised and measured in the consolidated financial statements at their
fair value at the date of acquisition.
- The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities
incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets
acquired and liabilities assumed in a business combination are measured initially at their fair values at the date of
acquisition, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value
of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less
than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income
statement.
Subsidiaries
A subsidiary is an entity whose operating and financing policies are controlled by the Group. Subsidiaries are consolidated
from the date on which control was transferred to the Group. Subsidiaries cease to be consolidated from the date the Group
no longer has control. Intercompany transactions, balances and unrealised gains on transactions between Group companies
have been eliminated on consolidation.
As a result of applying reverse acquisition accounting since 30 January 2009, the consolidated IFRS financial information
of dotdigital Group Plc is a continuation of the financial information of dotmailer Limited.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the
ordinary course of the Group's activities. Revenue is shown net of value added tax returns, rebates and discounts after
eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably measured and it is probable that the future
economic benefits will flow to the entity. The Group bases its estimates on historical results, taking in to consideration
the type of customer, the type of transaction and the specifics of each arrangement.
The Group sells web based marketing services to other businesses and services are either provided on a usage basis or fixed
price bespoke contract. Revenue from contracts are recognised under percentage of completion method based on a percentage
of services performed to date as a percentage of the total services to be performed.
Going concern
The directors, at the time of approving the financial statements, a reasonable expectation that the Company and the Group
have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the
going concern basis of accounting in preparing the financial statements.
Operating profit
Operating profit is stated after charging operating expenses but before finance costs.
Dividends
Final dividend distributions to the Company's shareholders are recognised as a liability in the financial statements in the
period in which the dividends are approved by the Company's shareholders while interim dividends distributions are
recognised in the period in which the dividends are declared and paid.
Goodwill
Goodwill represents the excess of the fair value of the consideration over the fair values of the identifiable net tangible
and intangible assets acquired.
Under IFRS 3 "Business Combinations" goodwill arising on acquisitions is not subject to amortisation but is subject to
annual impairment testing. Any impairment is recognised immediately in the income statement and not subsequently reversed.
Investments in subsidiaries
Investments are held as non-current assets at cost less any provision for impairment. Where the recoverable amount of the
investment is less than the carrying amount, impairment is recognised.
Intangible assets
Intangible assets are recorded as separately identifiable assets and recognised at historical cost less any accumulated
amortisation. These assets are amortised over their useful economic lives 4-5 years, with the charge included in
administrative expenses in the income statement.
Intangible assets are reviewed for impairment annually. Impairment is measured by determining the recoverable amount of an
asset or cash generating unit (CGU) which is the greater of its value in use and its fair value less costs to sell. 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 or CGU. For the
purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest Group of
assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or
CGU.
- Domain names
Acquired domain names are shown at historical cost. Domain names have a finite life and are carried at cost less
accumulated amortisation. Amortisation is calculated using straight line method to allocate the cost of domain names over
their useful lives of four years.
- Software
Acquired software and websites are shown at historical cost. They have a finite life and are carried at cost less
accumulated amortisation. Amortisation is calculated using straight line method to allocate the cost of software and
websites over their useful lives of four years.
- Product development
Product development expenditure is capitalised when it is considered that there is a commercially and viable technically
product, the related expenditure is separable identifiable and there is a reasonable expectation that the related
expenditure will be exceeded by future revenues. Following initial recognition, product developments are carried at cost
less any accumulated amortisation and any accumulated impairment losses. The useful lives of these intangible assets are
assessed to have a finite life of five years. Amortisation is charged on assets with finite lives and until economic
benefit can be received and recognised, this expense is taken to the income statement and useful lives are reviewed on an
annual basis. Amortisation is charged from the point when the assets is available for use.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised development costs
are recorded as intangible assets and amortised from the point at which they are ready for use on a straight line basis
over its useful life.
Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as
intangible assets when the following criteria are fulfilled:
- It is technically feasible to complete the intangible asset so that it will be available of use or resale
- Management intends to complete the intangible asset and use or sell it
- There is an ability to use or sell the intangible
- It can be demonstrated how the intangible asset will generate possible future economic benefits
- Adequate technical, financial and other resource to complete the development and to use or sell the intangible asset are
available and
- The expenditure attributable to the intangible asset during its development can be reliably measured.
- Impairment of non financial assets (excluding goodwill)
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible 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 the
asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for
impairment annually and whenever there is an indication that the asset may be impaired.
Property, plant and equipment
Tangible non-current assets are stated at historical cost less accumulated depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits are associated with the item will flow to the company and the cost of the item
can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred. Depreciation is provided at the
following rates in order to write off each asset over its estimated useful life and are based on the cost of assets less
residual value. Significant components of individual assets are assessed and if a component has a useful life that is
different from the remainder of that asset, that component is depreciated separately.
Short leasehold: over the term of the lease
Fixtures and fittings: 25% on cost
Computer equipment: 25% on cost
The asset's residual values and useful economic lives are reviewed and adjusted, if appropriate, at each reporting date. An
asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater
then its estimated recoverable value.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
other (losses) or gains in the income statement.
Capital risk management
The Group manages its capital to ensure it is able to continue as a going concern while maximising the return to
stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of cash
equivalents and equity attributable to the owners of the parent as disclosed in the Statement of Changes in Equity.
Taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the Income Statement, extent to the
extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is
also recognised in other comprehensive income for directly in equity, respectively.
Current tax
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules,
using tax rates enacted or substantially enacted by the balance sheet date.
Deferred taxation
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available
against which the temporary difference will be utilised.
Deferred income tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date
and are expected to apply when they related deferred income asset is realised or deferred income tax liability is settled.
Operating leases
Rent payable under operating leases is not recognised in the Group's statement of financial position. Such costs are
expensed on a straight line basis over the term of the lease. Lease incentives received are recognised as an integral part
of the total expense, over the term of the lease.
Financial instruments
Financial assets and financial liabilities are recognised on the statement of financial position when an entity becomes a
party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured
at fair value. Transaction costs that is directly attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at
fair value through profit or loss are recognised immediately in the income statement.
- Financial assets
The Group's accounting policies for financial assets are set out below.
Management determine the classification of its financial assets at initial recognition depending on the purpose for which
the financial assets were acquired and where allowed and appropriate, revaluate this designation at every reporting date.
All financial assets are recognised on a trade date when, and only when, the Group becomes a party to the contractual
provisions of an instrument. When financial assets are recognised initially, they are measured at fair value plus
transaction costs, except for those finance assets classified as at fair value through profit or loss ('FVTPL'), which are
initially measured at fair value.
Financial assets are classified into the following specified categories: financial assets at FVTPL, 'held-to-maturity'
investments, 'available for sale' (AFS) financial assets and loans and receivables. The classification depends on the
nature and purpose of the financial assets and is determined at the time of recognition.
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are
transferred and substantially all of the risks and rewards of ownership have been transferred.
At each reporting date, financial assets are reviewed to assess whether there is objective evidence of impairment. If any
such evidence exists, impairment loss is determined and recognised based on the classification of the financial asset.
Loans and receivables (including trade receivables, prepayments, deposits and other receivables, cash and bank balances)
are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. At each
reporting date subsequent to initial recognition, loans and receivables are carried at amortised cost using the effective
interest method, less any identified impairment losses. An impairment loss is recognised in the statement of comprehensive
income when there is objective evidence that the asset is impaired, and is measured as the difference between the asset's
carrying amount and the present value of estimated future cashflows discounted at the original effective interest rate.
Impairment losses are reversed in subsequent periods when an increase in the asset's recoverable amount can be related
objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of
the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment
not been recognised.
- Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial institutions,
and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to
an insignificant risk of changes in value, having been within three months of maturity at acquisition. Bank overdrafts that
are repayable on demand and form an integral part of the Group's cash management are also included as a component of cash
and cash equivalents for the purpose of the consolidated statement of cash flows.
- Trade receivables
Trade receivables are recognised initially at the lower of their original invoiced value and recoverable amount. A
provision is made when it is likely that the balance will not be recovered in full. Terms on receivables range from 30 to
90 days.
- Financial liabilities and equity
Financial liabilities and equity are recognised on the Group's statement of financial position when the Group becomes a
party to a contractual provision of an instrument. Financial liabilities and equity instruments issued by the Group are
classified according to the substance of the contractual arrangements entered into and the definitions of a financial
liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets
of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds
received, net of transaction costs.
The Group's financial liabilities include trade payables and accrued liabilities.
- Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method. Terms on accounts payables range from 10 to 90 days.
Foreign currency risk
Currency risk is the risk that the holding of foreign currencies will affect the Group's position as a result of a change
in foreign currency exchange rates. The Group has no significant foreign currency risk as most of the Group's financial
assets and liabilities are denominated in functional currencies of relevant group entities. Accordingly, no quantitative
market risk disclosures or sensitivity analysis for currency risk have been prepared.
The results and financial position of all the group entities (none of which has the currency of a hyper-inflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
(a) Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance
sheet;
(b) Income and expenses for each income statement are translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income
and expenses are translated at the rate on the dates of the transactions); and
(c) All resulting exchange differences are recognised in other comprehensive income.
Equity
Share capital is the amount subscribed for shares at their nominal value.
Share premium represents the excess of the amount subscribed for the share capital over the nominal value of the respective
shares net of share issue expenses.
Retained earnings represent the cumulative earnings of the Group attributable to equity Shareholders.
The reverse acquisition reserve relates to the adjustment required by accounting for the reverse acquisition in accordance
with IFRS3 'Business combinations'.
Other reserves relate to the charge for share based payments in accordance with IFRS2 'Share based payments'.
Share based payments
For equity settled share based payment transactions the Group, in accordance with IFRS 2 "Share Based Payments" measures
their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments
granted. The fair value of those equity instruments is measured at the grant date using the trinomial method. The expense
is apportioned over the vesting period of the financial instrument and is based on the number which is expected to vest and
the fair value of those financial instruments at the date of grant. If the equity instruments granted vested immediately,
the expense is recognised in full.
Functional currency translation
- Functional and presentation currency
Items included in the financial statements of the company are measured using the currency of the primary economic
environment in which the entity operates (functional currency), which is mainly pounds sterling (£) and it this currency
the financial statements are presented in.
- Transaction and balances
Foreign currency transactions are translated in to the functional currency using exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at the year end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement.
Employee benefit costs
The Group operates a defined contribution pension scheme. Contributions payable by the Group's pension scheme are charged
to the income statement in the period in which they relate.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provide to the chief operating
decision-maker. The chief operating decision maker who is responsible for allocating resources and assessing performance of
the operating segments as identified by the board of directors.
Critical accounting adjustments
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated
based on historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below:
Judgements
(a) Capitalisation of development costs
Our business model is underpinned by our email and cross-channel marketing automation platform, dotmailer. Internal
activities are continually undertaken to enhance and maintain the product in a bid to stay ahead of our competition.
Management review the work of developers during the period and make the following judgements:
- Internal work relating to product development is reviewed against IAS 38 criteria and will be capitalised if management
feel the criteria have been met.
- Internal work relating to the maintenance of existing products is expensed to the income statement and accounted for in
payroll costs.
Estimates and assumptions
(a) Impairment testing of goodwill
The Directors have carried out a detailed impairment review in respect of goodwill. The Group assesses at each reporting
date whether there is an indication that an asset may be impaired, by considering the net present value of discounted cash
flows forecasts which have been discounted using a pre-tax discount rate of 10%. The cash flow projections are based on the
assumption that the Group can realise projected sales. A prudent approach has been applied with no residual value being
factored.
Further details on the estimates and assumptions we make in our annual impairment testing of goodwill are included in Note
12 to the Financial Statements. At the period end, based on these assumptions there was no indication of impairing to
carrying value of goodwill.
(b) Share-based compensation
Key management believe that there will not be only one acceptable choice for estimating the fair value of share-based
payment arrangements. The judgements and estimates that management apply in determination of the share-based compensation
are summarised below:
- Selection of a valuation model
- Making assumptions used in determining the variables used in a valuation model
i. expected life,
ii. expected volatility,
iii. expected dividend yield,
iv. interest rate
Further detail on the estimates and assumptions we make in our share-based compensation are included in Note 27 to the
Financial Statements. The charge made to income statement for period is also disclosed here.
(c) Depreciation and amortisation
The Group depreciates short leasehold, fixtures and fittings, computer equipment and amortises computer software,
internally generated development costs and domain names on a straight line method over the estimated useful lives. The
estimated useful lives reflect the directors' estimate of the periods that the Group intends to derive future economic
benefits from the use of the Group's short leasehold fixtures and fittings, computer equipment, computer software,
internally generated development costs and domain names.
(d) Bad debt provision
We perform ongoing credit evaluations of our customers and grant credit based upon past payment history, financial
condition and anticipated industry conditions. Customer payments are regularly monitored and a provision for doubtful
accounts is established based upon specific situations and overall industry conditions. Hence the provision is maintained
for potential credit losses based upon management's assessment of the expected collectability of all accounts receivable.
In making this assessment, management takes into consideration (i) an circumstances of which we are aware regarding a
customer's inability to meet its financial obligations and (ii) our judgements as to potential prevailing economic
conditions in the industry and their potential impact on the Group's customers.
3. SEGMENTAL REPORTING
The Group's single line of business is the provision of web based marketing services. Last year more than 90% of the
Group's revenue arose in the UK and all of the Group's non-current assets were held there. This year the chief operating
decision maker considers the Group's only reportable segment to be by geographical location. This being UK and rest of the
world ("RoW") operations as shown below:
30.06.2015
UK Operations RoW Operations Total
£'000 £'000 £'000
Income statement
Revenue 18,274 3,092 21,366
Gross profit 16,676 2,398 19,074
Profit before income tax 3,476 1,767 5,243
Total comprehensive income attributable to the owners of the parent 2,895 1,764 4,659
Financial position
Total assets 21,591 819 22,410
Net current assets 12,964 660 13,624
Revenue from external customers are attributed to the geographical segments noted above based on the customers' location.
There was no customers who account for more than 10% of revenue (2014: none)
30.06.2014
UK Operations RoW Operations Total
£'000 £'000 £'000
Income statement
Revenue 14,647 1,566 16,213
Gross profit 13,267 1,413 14,680
Profit before income tax 2,430 1,211 3,641
Total comprehensive income attributable to the owners of the parent 2,205 1,210 3,415
Financial position
Total assets 17,002 293 17,395
Net current assets 10,030 (246) 9,784
4. DISCONTINUED OPERATIONS
Discontinued operations refers to the closure of the service division.
Analysis of continuing and discontinued operations is as follows:
Year ended 30 June 2015 Continuing operations Discontinuedoperations
30.6.15 30.6.15
£'000 £'000
Revenue 21,366 -
Cost of sales (2,292) -
Gross profit 19,074 -
Administrative expenses (13,858) -
Operating profit before exceptional items 5,216 -
Finance income 27 -
Income tax (587) -
Profit for the year attributable to owners of the parent 4,656 -
Year ended 30 June 2014 Continuing operations DiscontinuedOperations
30.6.14 30.6.14
£'000 £'000
Revenue 16,213 199
Cost of sales (1,533) (122)
Gross profit 14,680 77
Administrative expenses (11,059) (118)
Operating profit/(loss) before exceptional items 3,621 (41)
Finance income including exceptional items 20 -
Income tax (181) -
Profit/(loss) for the year attributable to owners of the parent 3,460 (41)
5. EMPLOYEES AND DIRECTORS
30.6.15 30.6.14
£'000 £'000
Wages and salaries 7,711 6,024
Social security costs 871 679
Other pension costs 221 147
8,803 6,850
The average monthly number of employees during the year are as follows
30.6.15 30.6.14
Directors 7 7
Sales and Marketing 84 80
SEO and Product Developers 48 41
Administration 47 44
186 172
Remuneration of key management personal is included in note 25 During the year the Group also capitalised staff related costs of £1,549,066 (2014 - £1,232,341) in relation to internally generated development costs.
6. NET FINANCE INCOME
30.6.15 30.6.14
£'000 £'000
Finance income:
Deposit account interest 27 20
27 20
7. OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS
Costs by nature
Profit from continuing operations has been arrived after charging/(crediting):-
30.6.15 30.6.14
£'000 £'000
Direct marketing 1,516 1,033
Outsourcing 415 471
Other costs 361 29
Total cost of sales 2,292 1,533
30.6.15 30.6.14
£'000 £'000
Staff related costs (inc Directors emoluments) -note 5 8,803 6,850
Operating leases: Land and buildings 834 586
Operating lease: Other 44 68
Audit remuneration 38 36
Amortisation of intangibles 1,159 866
Depreciation charge 397 251
Legal, professional and consultancy fees 417 480
Computer expenditure 828 584
Bad debts 103 302
Foreign exchange losses 61 67
Travelling 351 250
Office running 217 160
Other costs 606 559
Total administration costs 13,858 11,059
During the year the Group obtained the following services from the Group's auditor at costs detailed below:
30.6.15 30.6.14
£'000 £'000
Fees payable to the Company's auditor for the audit of Parent Company and consolidated financial statements 7 7
Fees payable to the Company's auditor for other services
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