BLINKX
ANNUAL  
REPORT 
AND 
ACCOUNTS
YEAR ENDED
3 1 M A R C H  
2016
COMPANY NO: 06223359
BLINKX ANNUAL REPORT AND ACCOUNTS YEAR ENDED 31 MARCH 2016 This Annual Report contains forward-looking  
statements. These include, but are not  
limited to, statements regarding:
  the growth of our business and revenues; 
  our expectations about the factors that 
 business; 
   forecasts regarding Internet usage and 
advertising spend, which are likely to cause  
 
 
  our plans to continue to invest in our  
people, processes and products; 
   our plans to continue our current pace  
of acquisitions; 
 
 the potential for declines in our revenue, 
 
 
 projected levels of growth in our markets; 
  our investments in international and  
emerging markets and sectors; 
 
 estimates of future compensation expenses; 
 
 
 
 
our plans to use funds; 
  
operating expenses; and 
  other statements regarding our future  
 
prospects, and business strategies. 
By their nature, forward-looking statements involve 
risk and uncertainty because they relate to future 
events and circumstances, including, but not limited 
to, US and UK domestic and global economic and 
business conditions, the effects of blogs and media 
coverage, the effects of continued volatility in credit 
markets, market-related risks such as changes in 
interest rates and exchange rates, the policies and 
actions of governmental and regulatory authorities, 
changes in legislation, the further development of 
standards and interpretations under International 
Financial Reporting Standards (IFRS) applicable to 
past, current and future periods, evolving practices 
with regard to the interpretation and application of 
standards under IFRS, the outcome of pending and 
future litigation, the success of future acquisitions 
and other strategic transactions, and the impact of 
competition—a number of which are beyond  
blinkx’s control.
As used herein, “blinkx,” “the Company,” “the Group,” 
“we,” “our,” and similar terms include blinkx plc 
and its subsidiaries, unless the context indicates 
otherwise. “blinkx” and other trademarks of ours 
appearing in this report are our property. This report 
contains additional trade names and trademarks of 
other companies. We do not intend our use or display 
of other companies’ trade names or trademarks to 
imply an endorsement or sponsorship of us by  
such companies, or any relationship with any of 
these companies. 
Except as required by the Financial Conduct 
Authority (FCA), Alternative Investment Market 
(AIM), or applicable law, blinkx expressly disclaims 
any obligation or undertaking to release publicly 
any updates or revisions to any forward-looking 
 any changes in blinkx’s expectations with regard 
thereto or any changes in events, conditions or 
circumstances on which any such statement is based. 
Neither the content of the Company’s website (or 
any other website) nor the content of any website 
accessible from hyperlinks on the Company’s website 
(or any other website) is incorporated into, or forms 
part of, this report. None of these statements should 
 recommendation to invest in the Company.
SAFE HARBOR DISCLOSURE CONTENTS
STRATEGIC REPORT
KEY HIGHLIGHTS  1 
BUSINESS OVERVIEW  2 
CHAIRMAN’S STATEMENT  5 
THE CEO’S REPORT  6 
THE CFO‘S REPORT  8 
STRATEGY AND BUSINESS MODEL  12 
COMMERCIAL MODEL  16
GOVERNANCE 
CORPORATE GOVERNANCE REPORT  19
BOARD OF DIRECTORS  22
REMUNERATION COMMITTEE REPORT  25 
AUDIT COMMITTEE REPORT  28 
NOMINATION COMMITTEE REPORT  30 
DIRECTORS’ REPORT  31
FINANCIALS 
FINANCIAL STATEMENTS  34 
INDEPENDENT AUDITOR’S REPORT  35 
CONSOLIDATED INCOME STATEMENT  37 
CONSOLIDATED BALANCE SHEET   39 
CONSOLIDATED CASH FLOW STATEMENT  41 
NOTES TO FINANCIAL STATEMENTS  42 
SHAREHOLDER INFORMATION AND ADVISORS 71 
GLOSSARY  72 AS ANTICIPATED, FY2016  
WAS A YEAR OF INTEGRATION 
AND INVESTMENT AS THE  
INDUSTRY CONTINUED TO  
TRANSFORM AND EVOLVE.  
THE COMPANY FOCUSED ON ITS 
CORE CAPABILITIES OF MOBILE, 
VIDEO AND PROGRAMMATIC 
TRADING, WHICH NOW  
REPRESENT OVER 70% OF  
REVENUES, COMPARED TO  
LESS THAN 50% LAST YEAR. 1
REVENUE
$166.7M
$215.0M
ADJ. EBITDA
-$10.5M
$3.5M
NET CASH &  
MARKETABLE  
SECURITIES
$78.5M
$95.7M
As anticipated, FY2016 was a year of integration and investment as the Industry continued 
to transform and evolve. The Company focused on its Core capabilities of mobile, video and 
programmatic trading, which now represent over 70% of revenues, compared with less than 50% 
last year. The Company deliberately drew down certain historical Non-Core product lines that were 
 top-line growth.
Key business highlights for the year include:
 programmatic trading, which grew to $116M (FY2015: $103M) and now represent 70% of total 
revenues (FY2015: 48%, FY2014: 25%); 
  Invested approximately $20M in research and development to build and launch integrated 
programmatic platform, ending the Period with a strong debt-free balance sheet with over $78M 
in cash, cash equivalents and marketable securities;
 
the usual fourth quarter seasonality;
  Executed planned drawdown of certain historical, Non-Core product lines, which are no longer 
strategic to Company or Industry growth, reducing annual revenues by over $60M;
  Approximately $81M of the statutory loss before taxation of $94.3M was non-cash in nature, 
 
 restructuring at a cost of $3M, to better align the Company’s cost structure with Core products, 
operations and market dynamics; 
 programmatic trading platform that drove over 68% growth in programmatic revenues  
year-on-year, well ahead of Industry growth rates; 
  Programmatic platform volumes grew over 1,200% during the Period, trending to almost  
1.2 trillion requests per month in Q42016 since production launch in September 2015;
  The RhythmOne platform ranks #5 in quality and #6 by volume, as measured by Pixalate  
(April 2016) and comScore (March 2016) respectively, featuring within the top 5% of the 
competitive set;
  quality partners, The Media Trust and RiskIQ; 
  Added 27 programmatic demand side partners, including marquee platforms such as DataXu, 
MediaMath, BidSwitch, Criteo and The Trade Desk;
 Pubmatic, Sovrn, Rubicon Project and AOL;
 Macy’s, JCPenney, Iams, Pedigree and Kellogg’s Froot Loops; 
  Signed over 500 publisher partners, including Monster, Topix, Hubbard Broadcasting,  
  Appointed Mr. Raj Chellaraj as Chairman of the blinkx Board of Directors; and
  Appointed Ms. Andy Cunningham as an Independent, Non-Executive Director.
KEY HIGHLIGHTS
     2
BLINKX
blinkx (LSE AIM: BLNX) is an online advertising company 
that connects digital audiences with brands through premium 
 marketplace for digital advertising. 
FY2016 was a year of integration and investment, set against a 
rapidly evolving Industry backdrop. During the year, the Company 
undertook a broad restructuring of the business and deliberately 
 growing segments within online advertising. Simultaneously, blinkx 
 lines. As a result of this shift, Core products constituted 70% of 
revenues in FY2016, compared with less than 50% in FY2015. 
 integrated programmatic trading platform. The platform offers a 
common point of access to RhythmOne inventory across owned, 
controlled and extended supply sources. As a result, blinkx now 
represents one of the largest supply footprints in the Industry, 
ranking #6 US platform by comScore and #12 by Quantcast, as at 
 supply side of the value chain, streamlining interactions between 
 effectiveness of online advertising campaigns. 
blinkx believes the online advertising sector will continue to 
grow and transform at a rapid pace. The Company also believes that 
advertisers will continue to reward fully integrated supply partners 
that deliver audience-centric, cross-screen advertising capabilities 
and clear measurement around campaign effectiveness and supply 
quality. 
The Company’s recent product integration efforts are expected to 
augment supply scale, enhance audience targeting and provide 
greater return on spend for advertisers, as a result of eliminating 
intermediary point-solutions from the value chain. blinkx is 
 United States and Canada. 
MARKET OUTLOOK
A number of key trends are driving evolution of the digital consumer 
and Industry. 
More than ever, users are consuming content online, bypassing 
traditional television service providers. Cord cutting, and the 
rise of Over-the-Top (‘OTT’) service providers, demonstrates the 
convergence between traditional television and digital video. US 
advertising spend is growing at 11% per year and budgets continue 
to shift from traditional to digital channels, as advertisers follow 
 outpace television spend over the next few years. 
In addition, users’ attention is becoming increasingly fragmented, 
 encompassing both user-generated and professionally produced 
content. Advertisers are challenged with following consumers 
across devices, targeting them with the right message at the right 
time, and managing a more diverse suite of channels and formats 
than ever. As a result, cross-screen advertising has emerged as a 
high-growth industry sub-sector, with advertisers seeking seamless 
audience targeting across devices. This cross-screen expansion is 
especially apparent in the growth of mobile and video spend. Mobile 
ad spend is expected to exceed desktop spend, with channel growth 
 mobile video spend is expected to grow at an impressive 18% 
 campaigns are viewed. By all accounts, audience targeting across 
devices will become a required capability in every supply provider’s 
arsenal. 
Media buying mechanics also have shifted. Media buying is executed 
 Programmatic trading is now the dominant buying modality as the 
majority of media inventory is bought and sold through automated 
trading mechanisms, including auction-based Real-Time Bidding 
 was bought programmatically (59%) than through direct channels. 
 double by 2019. RTB is expected to account for 48% of display ad 
spending in 2020, with non-RTB programmatic accounting for an 
additional 17% of spend. Within RTB sales, mobile and video are 
 62% between 2015 and 2018. 
This dynamic landscape is coupled with increased advertiser 
 audience quality and brand safety. A number of third parties have 
 assessing inventory quality. The Company has grown its quality 
supply footprint through the addition of owned and operated web 
 fraud screening technology that is integrated within the RhythmMax 
platform. 
Finally, ad blocking and consumer privacy concerns are dominating 
headlines. This has resulted in an active dialogue around the value 
exchange that governs content consumption, as well as increased 
pressure on advertisers and brands to create compelling, relevant 
ad experiences for consumers. It has also led to increased interest 
in native advertising (where the ad experience mirrors the natural 
form and style of the digital medium in which it is placed), longer-
form and experiential advertising. 
BUSINESS OVERVIEW
BLINKX PLATFORM
CONTENT
APPS
BLINKX
CONSUMERS ADVERTISERS 3
FORWARD INTEGRATION
THROUGH THE VALUE CHAIN
Uniﬁed, Unique Programmatic Platform to target 
engaged audiences at scale.
ATD: Agency Trading Desk, DSP: Demand Side Platform, SSP: Supply Side Platform, NWK: Network
 BRAND             AGENCY         ATD         DSP          EXCHANGE           SSP           NWK        WEBSITE          CONSUMER
PURPOSE AND OBJECTIVE
The Company’s purpose is to connect digital audiences and brands 
through premium content across devices, at scale. By achieving 
this goal, blinkx adds value and aligns the interests of the three key 
constituents in its value chain: 
CONSUMERS: Facilitate access to digital content. 
 and sustain the fair value exchange. 
STRATEGY
blinkx’s strategy for Core product line growth incorporates a number 
of key components: 
 (video, search, display, social, etc.) and channel (desktop, mobile, 
 simplify the dialogue with customers, harnessing the breadth of 
the Company’s supply footprint, cross-screen targeting capabilities 
 reach discrete audiences across devices at scale, using the most 
appropriate formats to achieve campaign goals. This results in more 
 resulting in greater demand and cross-sell opportunity. 
 Today, over 2/3 of the US population consumes video online. Online 
 targeting and tracking capabilities inherent to online user activity. 
blinkx continues to focus heavily on video as a priority advertising 
format, and has enabled video advertising within its programmatic 
marketplace. As technology continues to develop and video buying 
continues to shift toward programmatic channels, this strategy will 
allow blinkx to capture migrating spend and position its inventory at 
premium rates within its marketplace. 
 
THE SUPPLY CHAIN 
blinkx historically has occupied portions of the supply side of 
the ecosystem. As the value chain has become more complex to 
accommodate programmatic trading, the revenue share equation 
has fragmented further to accommodate supply side platforms, 
demand side platforms and exchanges. blinkx has deliberately 
forward-integrated within the value chain, and assembled the 
 at scale to a buying platform for advertisers. The Company’s 
integrated programmatic platform further includes proprietary 
brand safety technology that screens and eliminates suspicious 
 around supply quality and brand safety. As a result, blinkx can 
 
ranked #5 on Pixalate’s Trusted Seller Index, as at April 2016. This 
 one-stop shop for all advertiser needs, the opportunity to capture 
a greater share of each advertising dollar spent, and the ability 
to overlay data, quality metrics and targeting attributes on the 
Company’s supply base, resulting in greater demand and  
higher pricing. 
OPERATING MODEL
The blinkx operating model consists of four key components: supply 
partners, demand partners, content (including desktop and mobile 
app providers) and underlying technology. blinkx matches audiences 
across thousands of sites and apps with content and ads in real 
time, using its contextual algorithms and programmatic trading 
capabilities. The Company earns revenue from advertisers seeking 
to present their messages to relevant consumers across devices and 
formats, and distributes a share of this revenue to the publishers, 
app owners and content providers within its ecosystem. 
 operating model, with supply and demand entities supported by 
 and legal functions. The sales function is fully consolidated to 
encourage cross-platform, integrated campaign selling. 
Over the past year, the Company strengthened its Core strategic 
capabilities of mobile, video and programmatic trading and took 
 device programmatic platform and consolidating the Company’s 

access. Concurrently, blinkx accelerated its drawdown of certain 
historical product lines that are considered Non-Core to future 
growth and will no longer be the focus of ongoing operations. 
In addition to the supply consolidation within RhythmMax, further 
integration achievements during the Period included consolidation of 
 infrastructure and technology to reduce redundancies and streamline 
 cost structure and better align with changing Industry conditions, 
 OUTLOOK
blinkx anticipates a number of positive outcomes as a result of 
executing against its strategy. In the coming year, the Company 
 deriving from a number of well-understood growth drivers. These 
 inventory sources onto the RhythmMax platform; higher pricing as a 
result of value-added targeting through proprietary data; increased 
throughput from existing supply and demand side partners; new 
direct and programmatic supply and demand side partners; delivery 
of high-impact, high-margin video and rich media campaigns 
programmatically; and the establishment of private (trading) 
marketplaces to directly connect preferred supply and demand 
partners within the RhythmMax platform.
 with a product portfolio that is well aligned with Industry growth 
trends. The Company continues to anticipate that FY2017 will be a 
 I FEEL CONFIDENT IN 
OUR COMPANY’S FUTURE 
AS WE CONTINUE TO 
DILIGENTLY STREAMLINE 
OPERATIONS, DEVELOP 
INNOVATIVE PRODUCTS 
AND FOCUS ON OUR 
MISSION TO BE THE 
DOMINANT PROVIDER 
OF QUALITY DIGITAL 
AUDIENCES, ACROSS 
DEVICES, AT SCALE.
4 Financial Year 2016 was a pivotal year for the online advertising 
industry in general and blinkx in particular.  Consolidation dominated 
 supply side players seeking to complete end-to-end technology 
 scale challenges. Consumer privacy and concerns about supply 
quality placed additional pressure on the ecosystem as advertisers 
 challenges, digital advertising spend projections remain strong, 
 programmatic trading. The Company’s investment in Core product 
areas, integration achievements and actions to streamline operations 
place blinkx in a position of strength and differentiation in this 
dynamic environment.
During this past year, blinkx consolidated its offerings under a new 
brand, RhythmOne, which allowed the Company to make inroads 
with advertisers and brands looking for turnkey, cross-device 
solutions at scale. The Company actively focused on integration and 
investment in its Core mobile, video and programmatic offerings, 
which have grown from 50% of revenues in FY2015 to over 70% in 
FY2016. The Company successfully aggregated supply through its 
 its owned and operated web properties, and direct relationships with 
publishers and app developers.  The platform is also one of the few 
 their digital marketing investments. 
In addition to a strong, integrated product offering, the Company 
has also taken deliberate steps to drawdown on historical products 
that were considered Non-Core to future growth.  As a result, 
 the expense of revenue associated with Non-Core streams. This 
operating discipline enabled the Company not only to preserve cash 
in an uncertain industry environment but, more importantly, build 
 future as we continue to diligently streamline operations, develop 
innovative products and focus on our mission to be the dominant 
provider of quality digital audiences, across devices, at scale. 
The entire blinkx team deserves recognition and praise for their 
 over the past year, which have helped to re-position the Company 
 During the year, blinkx also made several executive hires in product, 
sales, technology and marketing, who will play a critical role in 
driving future growth. This past year, the Board continued to bolster 
 was pleased to announce the appointment of Ms. Andy Cunningham 
as an independent Non-Executive Board member.  She brings 
 management and strategic communications. Concurrently, after 
almost nine years on the Board (eight as Chairman), Mr. Anthony 
Bettencourt stepped down from the Board.  The Company is grateful 
for his service and invaluable contributions to the Company over  
the years.
I would like to offer my thanks to all our shareholders, both private 
and institutional, as well as our customers, employees and partners, 
for their support of blinkx during this transformative year. The 
Board continues to be inspired by monumental changes that blinkx 
and the management team successfully executed during FY2016 
 I am enthusiastic about the near- and long-term prospects for 
the Company and its shareholders, and am looking forward to a 
successful FY2017.
Raj Chellaraj 
Chairman of the Board of Directors 
blinkx plc 
16 May 2016
Raj Chellaraj 
Chairman of the Board  
of Directors
CHAIRMAN’S STATEMENT
5 one that was focused on integration and investment designed to 
reposition the Company given the rapid sector changes. blinkx 
 programmatic products and consolidated the Company’s supply 
sources, enabling advertisers to access inventory across devices 
and formats from a single platform. Simultaneously, blinkx 
accelerated the drawdown of certain historical Non-Core product 
lines that were no longer aligned with advertiser requirements. 
 alignment with Industry trends.
During FY2016, the online advertising industry continued  
 advertisers followed consumers online. As a testament to this 
trend, digital advertising spend in the US is set to overtake 
television spend in the next few years. Within digital, mobile  
 time this year, more display ads were bought programmatically 
than through direct channels. While the growth trajectory for 
mobile, video and programmatic trading remains strong, factors 
such as brand safety, viewability and consumer privacy have 
continued to impact industry dynamics.  This has triggered  
scrutiny of supply quality, and highlighted a discrepancy in the 
value exchange equation between digital consumers, advertisers 
 
 integrated offering, and point solutions that face challenges of 
scale and scope, making them ripe for consolidation. 
Against this industry backdrop, blinkx successfully grew its Core 
 over 70% of revenue during the Period, compared with 50% last 
year. As part of the RhythmOne portfolio, the Company launched 
 RhythmOne inventory across Owned, Controlled and Extended 
supply sources. The Company now boasts one of the largest supply 
footprints in the Industry, ranking #6 US platform by comScore 
and #12 by Quantcast, as at 31 March 2016. Our offering 
covers a comprehensive range of formats and devices, including 
desktop and mobile, video, rich media, social and native. Through 
RhythmOne, advertisers can reach target audiences to achieve 
measurable ROI at their desired spend level through  
a single entry point.  
With growing advertiser concerns around viewability and 
 approach to brand safety. Our RhythmMax platform includes 
 our marketplace. The ability to prevent fraud before it occurs, 
rather than just measure fraud after a campaign has run,  
is a radically different approach to operating a programmatic 
 and enrich the inventory made available to advertisers through our 
 inventory quality.  
 been the ability to mine data across our inventory, covering over 
300M users and all campaigns that run across our platforms. 
Increasingly, brands seek partners with proprietary data that  
 segment, target and deliver relevant advertising messages  
to their audiences. These capabilities support the Company’s 
audience-centric value proposition and help us break down 
traditional format- or channel-centric silos in how online 
 to the advertiser’s target audience and campaign performance.  
Indeed, the delineation between mobile and desktop spend will 
continue to blur, as advertisers focus instead on integrated  
 performance regardless of device.
The Company has also continued to innovate around its creative 
 blindness and the prevalence of ad blockers has become a distinct 
concern. In today’s environment, however, the need for high-
impact creative must be balanced with practical requirements 
 enhanced its creative offering by adopting the Interactive 
Advertising Bureau’s LEAN (Light, Encrypted, Ad-choice supported, 
Non-invasive) formats and investing in a proprietary creative 
 ad units that can be deployed in direct or automated buying 
environments. Through these developments, blinkx is able to 
 teams and improving the experience for consumers.
Throughout the year, the Company consistently displayed strong 
 cost structure and better align with changing industry conditions, 
 as well as the Company’s integration efforts, we were able to 
 areas of the business.  This included consolidating our physical 
 scalable hybrid cloud infrastructure and decreasing the number 
of data centers from 12 to 5. In addition, the Company reduced 

 industry change will be instrumental as we look to drive future 
organic and acquisition growth. 
In closing, FY2016 was transformative for the industry and pivotal 
for the Company. We believe that we now have the technology, 
talent and relationships in place to scale both organic and inorganic 
growth as the industry continues to evolve and consolidate. 
Through strong cost discipline and a strategic focus on Core 
mobile, video and programmatic products, we are now aligned  
 Subhransu (“Brian”) Mukherjee 
 
blinkx plc 
16 May 2016
THE CEO’S REPORT
6 Subhransu 
(“Brian”) 
Mukherjee 
Chief Executive 
 THROUGH STRONG COST  
DISCIPLINE AND A STRATEGIC  
FOCUS ON CORE MOBILE,  
VIDEO AND PROGRAMMATIC  
PRODUCTS, WE ARE NOW  
ALIGNED WITH BROADER  
STRUCTURAL MARKET TRENDS. 
WE FEEL ENERGIZED AS WE  
ENTER A NEW FINANCIAL YEAR 
AND PLAN TO FOCUS OUR  
ATTENTION ON REVENUE  
GROWTH AND PROFITABILITY.
7 During the year we focused on integrating the acquisitions of the prior years, investing in our Core product 
lines, and made tremendous progress to increase the scale, scope and reach of the business in mobile, 
video and programmatic trading. Simultaneously, the Company drew down certain Non-Core product lines, 

 via an advertising-supported distribution model, where revenues are derived from online advertising. 
Advertisers select from several product types that are priced based on criteria of their choosing. Almost 
 bespoke online advertising goals.  It is therefore not meaningful to separate the revenues by primary 
 operating segment, namely online advertising.
Total revenue for the year ended 31 March 2016 was $166.7 million compared with $215.0 million for the 
year ended 31 March 2015.  The change in revenue was principally driven by a deliberate reduction of our 
Non-Core revenue streams that was partially offset by an accelerated trend toward programmatic trading.
Cost of revenue decreased to $100.4 million in the current year, compared to $120.4 million for the year 
 percentage of revenue increased due to a shift in product mix towards higher volume but lower margin 
products, which was in line with management expectations. The product mix shift supports management 
 operating expenditures.
 2016, and represented 18% of revenue (2015: 14%) as we continue to invest in our Core programmatic 
platform.
Sales and marketing expenditure decreased by $17.1 million to $41.5 million for the year ended 31 March 
2016, compared to $58.6 million for the year ended 31 March 2015. The decrease was attributable to cost 
reduction and integration initiatives, and the draw down of certain Non-Core product lines.
 
31 March 2016 from $13.7 million for the year ended 31 March 2015. Overall cost consistent with prior 
 incremental headcount and costs from the acquisitions. 
Edward Reginelli 
 THE CFO’S REPORT
8
KPI 2016 VS. 2015
2016 2015 2016 2015
Revenue 166.7 215.0 Headcount at 31 March 274 ees 363 ees
Research & Development Spend 30.2 30.1
Adjusted EBITDA* (10.5) 3.5      # of Publisher Partners 4,196 5,950
Net Loss (92.3) (20.8) # of Advertising Partners 656 1,269
Net Cash Used By Operating Activities (6.3) (3.0)
Cash and Marketable Securities 78.5 95.7
FINANCIAL ($’000) NON-FINANCIAL EARNINGS AND TAX
 
by the non-cash impairment of $62.3 million of carrying values of goodwill and intangibles related to historical 
acquisitions, and the transition in our industry as a whole toward mobile and programmatic trading. 
 
tax rate was 2% compared with 16% in the prior year.
CASH FLOW
 

loss from operations, technology investments and payment of deferred acquisition consideration.  Net cash used in 
operating activities during the period was $6.3 million compared with $3.0 million of net used for the year ended  
31 March 2015. Excluding payments of acquisition and exceptional costs of $3.0 million, the Company used $3.3 million 
 during the Period, compared to $2.5 million payment in the prior year.
The net cash used in investing activities was $70.2 million, compared to $27.9 million for the year ended 31 March 2015. 
 existing infrastructure and platforms.
 
31 March 2015.  The current year activity primarily represents the payment of capital lease obligations made during  
the Period for the technology platform.
EXPENDITURE AND INTANGIBLES
Capital expenditures of $0.7 million for the Period ended 31 March 2016 with was consistent with prior year spend.  
The current year spend was principally driven by the acquisition of computer equipment and servers, which are 
complementary to the software license and needed to support the programmatic platform. 
Investments in intangible assets of $4.4 million for the year ended 31 March 2016 decreased from the prior year spend  
 FINANCIAL POSITION AND OUTLOOK
 million as of 31 March 2015. Net trade receivables at 31 March 2016 were $22.8 million compared with $37.7 million  
at 31 March 2015, which equates to 49 days sales outstanding, a decrease from the prior year which was 63 days.  
OPERATING METRICS
Staff count at 31 March 2016 was 274 compared with 363 last year, the change primarily driven by restructuring 
reductions. The number of Publisher partner relationships decreased to 4,196 compared with 5,950 last year, driven  
by commercial efforts to improve quality supply and the shift in business to programmatic. The count of Advertiser 
 
 
advertiser concentration. 
CONCLUSION
 invested in our key strategic priorities of mobile, video and programmatic trading to better align with broader Industry 
trends.  Key hires were recruited in the product, sales, and technology and marketing teams, further strengthening our 
ability to respond to the continuing changes in the Industry landscape. We have taken major cost-reduction initiatives 
 continues to explore acquisition opportunities to further accelerate the scale, scope and reach of our business.
Edward Reginelli 
 
blinkx plc 
16 May 2016
FY2016 HAS BEEN A YEAR OF INTEGRATION AND INVESTMENT 
FOR THE GROUP. WE HAVE INVESTED IN OUR KEY STRATEGIC 
PRIORITIES OF MOBILE, VIDEO AND PROGRAMMATIC TRADING 
TO BETTER ALIGN WITH BROADER INDUSTRY TRENDS. WE HAVE 
TAKEN MA JOR COST-REDUCTION INITIATIVES DURING THE YEAR 
TO ENSURE THAT WE PROTECT OUR CASH BASE, AND TO ENABLE 
THE GROUP TO TAKE ADVANTAGE OF BOTH CURRENT AND  
FUTURE OPPORTUNITIES.
9 PRINCIPAL RISKS AND UNCERTAINTIES
New devices, content and ad formats, targeting features 
and distribution channels are constantly being introduced 
in the online advertising sector. There is therefore risk 
 latest innovations across the industry. We support 
internal research and development, and actively seek 
partnerships that allow us to access and serve ads against 
new and emerging digital content types. Moreover, we 
have a proprietary creative platform through which we 
are regularly introducing new ad types, features and 
functionality in response to competitor offerings or the 
unique needs of the brands and advertisers with whom we 
work.
The advertising technology industry has undergone rapid 
consolidation. Margin-compressed point solutions are being 
eliminated in favor of full-stack, end-to-end solutions. The 
newly consolidated environment presents risks in terms 
 both the supply and demand sides of the value chain as 
advertisers and publishers look to streamline relationships 
and platforms. 
 supply chain, allowing us to offer one of the few truly 
end-to-end solutions for advertisers and publishers. As 
 including owned and operated web properties and direct 
or exclusive relationships with top-tier publishers and app 
developers. In addition, one of the key differentiators 
 technology. The ability to prevent fraud before it occurs, 
rather than just measure fraud post-campaign, is a 
radically different approach to operating a programmatic 
 omni-channel providers.
The digital advertising space is rapidly changing and 
common standards around quality assurance have yet 
 viewability and other key advertising requirements could 
cause us to incur substantial development costs, and failure 
to comply with these industry standards could harm our 
reputation and business. 
 respected partners that we believe will lead the way to 
establishing this common bar for the industry. We are 
contributing to help shape these standards through our 
 and our work with several leading third-party experts to 
continuously test our product offerings. By continuously 
monitoring and contributing to this ongoing convergence 
of standards, we intend to stay on the cutting edge of 
what is expected and required of industry leaders. 
Our business model is built on the value exchange 
between consumers and content providers. Ad blocking 
and consumer privacy concerns pose potential risks to our 
ability to serve and target advertising at scale. 

 the IAB’s LEAN (Light, Encrypted, Ad choice supported, 
 mitigate this risk by serving ads natively, in partnership with 
publishers, while still adhering to consumer preferences.
Our business depends on our core technology and 
we will continue to develop both the technology and 
its applications in online advertising. Technology that 
 claims against our technology, would present a risk  
 Management continually reviews the competitive 
landscape and newly developing technology in the sector. 
 and take appropriate action as necessary. 
 based and capture discretionary advertising spend. Such 
advertising spend is dependent on macro environmental 
industry conditions and elements outside of our direct 
control. If there is a negative change in economic and 
market conditions, this could impact the growth  
of the business. 
 product mix addresses multiple advertiser objectives, 
helping us avoid risk associated with product concentration.
Within the online advertising value chain, we use 
 Our business relies on our relationships with these entities, 
on which we place a high degree of importance.
 
to address different marketing objectives. The Company 
focuses on continuously expanding both its customer base 
and relationships with its commercial partners.
RISK MITIGATION
10 RISK MITIGATION
 properties for advertising inventory. Because only a small 
 third-party supply is variable and must be carefully 
 detect fraud or other actions that impact advertising 
 
in our products, which could cause our business to suffer.
 advertising environment for users and advertisers. Our 
 and screening technology and processes that make use  
of multiple sources of internal and external data, including 
whitelists, blacklists, scoring and blocked IPs. In addition, 
we have partnered with several third-party providers that 
offer independent and objective screening of our inventory 
 technology and partnerships, as well as publisher teams 

 pace with the industry. We have also appointed a Senior 
 Interruptions of services from our bandwidth providers, 
data centers, electricity providers and service providers 
may disrupt our business.
 several geographic regions, each with their own service 
providers; bandwidth is provided by multiple ISPs in each 
physical location; data centers provide redundant power 
with battery and generator back-up in each physical 
location; and functions are distributed across the data 
 infrastructure for redundant and burst capacity.
 interests may use personal communication platforms  
to freely disseminate information, which may be incorrect 
or misleading, and even sensational, damaging our 
reputation and commercial relationships.
 that may impact commercial and investor relationships. 
 showcasing all aspects of the business. We intend to host 
further events to take the opportunity to communicate 
 foster a clear understanding of its business model.
Acquisitions have been, and are likely to remain, a critical 
 management attention. Any acquisitions we undertake 
may adversely affect our operations and, if not properly 
integrated, could disrupt our business model  

 impact, and ensure timely integration. This process covers 
 cultural match, deal execution and post-merger integration. 
The timely and impactful integration of our previous 
acquisitions, both throughout our history and over the past 
 for inorganic growth in the future.
 and acquisitions since its inception. These growth paths 
 able to derive the full value of its acquisitions if it is unable 
to successfully integrate these acquisitions into its existing 
infrastructure and culture.
 targets post-acquisition. This includes appointing a Corporate 
 processes, procedures and culture, and help integrate all key 
 the best available options for key functions or technologies to 
upgrade its infrastructure and staff.
Our contracts with buyers are generally not exclusive and 
do not typically require minimum volumes or long-term 
commitments leading to demand side risk. Our buyers 
generally work with competitors as well, meaning that any 
strain in the relationship due to service failures or other 
reasons may lead to that buyer canceling or scaling back 
their spend with us in favor of a competitor.
 continuously develops new products and services designed 
to capture demand and further extend our relationships with 
partners. Additionally, we aim to comply with high service 
levels to ensure partner satisfaction and retention rates.
 and its peers may lead to stock price volatility, negative 
 The Company works closely with analysts and shareholders 
to help explain the changes in the Industry, and has taken 
cost-control actions to align its cost structure to current 
market conditions.
11 STRATEGY AND BUSINESS MODEL
2015 2016 2017 2018 2019 2020
Source: eMarketer, March 2016
69 69
77
87
105
71 72
74 75
77
52 52 52 52
SECTOR OVERVIEW
The advertising industry continues to demonstrate healthy 
growth with spend estimated to be $192 billion in the US in 
 is currently the largest spend category, estimated at $71 billion 
in 2016. US online ad spend represents approximately 36% of 
total ad spend, but is growing at over double that of advertising 
 eMarketer estimates that digital advertising spend will be on par 


This aligns with increasing online consumption trends 


2016 alone, this translates to 5 hours and 43 minutes of time 
spent with connected devices compared with only 4 hours and 
 slow to transition, advertising spend is beginning to align with 
 mobile and video.
TOTAL US AD SPEND BY MEDIA, 2015-2020 ($B)
Digital           TV            Traditional (Ex. TV)
60
54
96
53
12 Digital Ad Spend: Continued Strong Growth
Today, digital advertising is still dominated by search, which 
is estimated at 44% of total digital ad spend in 2016. While 
this direct response-focused channel is highly effective for 
advertisers, it’s estimated that display advertising (including 

This growth is led by mobile and video, which are expected 




users regularly consume video content through  
their smartphones.
Mobile & Video: Where Consumption Happens
Within online advertising, reaching consumers on  
mobile devices, and especially through video ad formats,  

connected devices per capita is expected to reach 1.5 by 
2020 (Cisco). According to eMarketer, while 34% of media 


smartphones and tablets.  Mobile is quickly becoming the 
device of choice for consumers. Time spent on mobile vs. 
desktop devices was approximately equal only three years ago. 
In 2016, consumers will spend over three hours/day on mobile 
devices, while just over two hours per day on their desktops 
(eMarketer, April 2016). Increased mobile consumption is 
driving budget shifts away from desktop to the mobile channel 

consumers. By 2020, mobile spend will be well over double 
that of desktop ad spend ($77B vs. $28B) and mobile spend 

years.  While time and budgets spent on mobile devices are 
increasing, because of the fundamental technical convergence 
of the two channels (mobile and desktop), the opportunity 
 challenge being to target the user, not the device.
Concurrent with the growth of mobile is also a rise in digital 
video consumption.  With 213 million viewers in the US this 
year, digital video is reaching over 2/3 of the US population 
(based on 2016 Census estimates, which put the US 
population at 323 million). According to Cisco, global consumer 

 and tracking capabilities inherent to digital experiences, 
making it an ideal format to deliver brands to an engaged 


$10 billion in 2016 to approximately $17 billion by 2020. 
This healthy growth is due in part from shifting budgets from 
television, but also from additional digital channels (connected 

consumption.
With mobile networks that enable consumers to watch video 
content anytime, anywhere, it is not surprising that mobile 
video, as a device and format combination, is one of the 
 
a relatively small base. This spend is expected to grow from  
an estimated $4.2 billion in 2016 to approximately $8.1 billion  
in 2020.
US DIGITAL AD SPEND, BY FORMAT 2015-2020 ($B)
Search           Banners & other          Video           Rich media
27
12
14
15
17
18
20
8
10
12
13
15
17
6
8
9
11
13
14
2 22 22 2
33
30
2015 2016 2017 2018 2019 2020
37
42
46
Sponsorships
US DIGITAL AD SPEND BY DEVICE, 2015-2020 ($B)
Desktop           Mobile
28
25
32
2015 2016 2017 2018 2019 2020
Source: eMarketer, March 2016
25 25 27
44
53
61
28
69
77
TOTAL US DIGITAL VIDEO VIEWERS, 2015-2020 (M)
206
219
213
2015 2016 2017 2018 2019 2020
225
229 232
TOTAL US DIGITAL VIDEO AD SPEND 2015-2020 ($B)
8
12
10
2015 2016 2017 2018 2019 2020
Source: eMarketer, March 2016
13
15
17
13
Source: eMarketer, March 2016
Source: eMarketer, March 2016 Programmatic: The New Norm
 display advertising was bought programmatically (59%) than 
through direct buys. This trajectory is anticipated to continue 
through 2017, at which time it is estimated it will represent almost 
three-fourths of all digital display ad spend (72%). 
There are several ways to trade programmatically, one of the 
 model that allows advertisers to bid on advertising placements 
 
over four years, RTB budgets in the digital display space will 
 
nearly double from $12 billion in 2016 to $23 billion by 2019, 
according to BI Intelligence. Further, RTB will grow to be the 
dominant approach to programmatic buying by 2020, where it 
is estimated to represent 48% of spend in this category. Within 
RTB sales, mobile and video are projecting strong growth with an 
 These sector trends reinforce blinkx’s strategy to focus on Core 
areas of mobile, video and programmatic trading. Product, 
technology and integration efforts have coalesced around these 
growth vectors as we seek to create a turnkey environment for 
 
buying methods.
GROWTH AND OPPORTUNITIES
Enhancing Our Core
Revenue, growth and investment in FY2016 focused on our Core areas of mobile, video and programmatic trading. The Company has 
 this investment and commitment deepening over the next 12 months. 
 to make enhancements and integrate supply sources through 
 included bringing together supply from our owned-and-operated 
properties (All Music, All Movies, SideReel, blinkx.com and 
 our extended network of aggregated supply. Integral to this 
were the 2015 acquisitions of All Media Networks and AdKarma.  
Collectively representing over 25M unique users per month, All 
Media represented an important step forward in the Company’s 
 bolstered the Company’s position within the programmatic 
segment of the digital video advertising market. The addition of 
transparent desktop and mobile video inventory at scale enabled 
the Company to expand its premium video advertising footprint 
through its direct and programmatic demand side relationships.
After its mid-year launch, the RhythmMax platform grew 
exponentially and now offers one of the largest supply footprints 
in the industry. According to comScore, a leading cross-platform 
measurement company, in the US, blinkx currently boasts 176.7M 
 platform. According to Quantcast, a prominent data-intelligence 
 (as at 31 March 2016). The Company will continue to deepen 
and broaden its supply partnerships, looking to expand beyond 
 out-of-home. In addition, the Company will explore opportunities 
 these audiences continues to represent one of our key organic 
 today represent a captive and well-understood organic growth 
opportunity for the Company, which we are actively seeking 
to convert through direct and programmatic demand side 
relationships. In support of this, the Company has formed or 
renewed relationships with over 27 demand side platforms this 
year, including industry leaders such as The Trade Desk, Media 
Math, DataXu, BidSwitch, Criteo and Feature Forward,  
to name a few.  
US PROGRAMMATIC DIGITAL DISPLAY 
AD SPEND, 2014-2017 ($B)
Source: eMarketer, October 2015
$10
$22
$15
2014 2015 2016 2017
$27
49%
59%
67%
72%
Programmatic digital display 
ad spending
% of total
14
SHARE OF DIGITAL AD REVENUE (US),  
2015-2020
Source: BI Intelligence estimates based on historical 
data from IDC, PubMatic, and Magna Global
RTB         Non-RTB         Non-Programmatic
36% 37% 38%
42%
48%
2015 2016 2017 2018 2019
18%
19% 20%
22%
22%
47%
44%
42%
37%
31%
35%
2020
17%
48%
RTB AD SALES BY FORMAT,  
2015-2018 ($B)
Desktop Display       Mobile       Video
Source: BI Intelligence Estimates, IDC
2015 4.9 1.4 1.1
6.5 2.9 2.0
2016
2017
2018
7.1 4.9 3.1
7.5 6.8 3.9
DEMAND
SUPPLY
RHYTHM
EXCHANGE
DIRECT      
NETWORK
PROGRAMMATIC
RHYTHM
GUARD
AD
SERVER
TAG
MANAGER
RHYTHMMAX FOR PUBLISHERS
OWNED      
CONTROLLED
EXTENDED
TECHNOLOGY PLATFORM Integral to the success of the RhythmMax programmatic platform 
has been the Company’s focus on audience quality and ad 
viewability. The mobile and video advertising space is rapidly 
changing and standards around quality assurance have yet to 
converge, though downward pressure from demand partners 
 released by the IAB in 2015, ad fraud is costing the US marketing 
and media industry an estimated $8.2 billion each year. blinkx 
 enhance its supply quality. In addition to integrating our high-
quality owned and operated properties into our supply footprint, 
 marketplace. Through this technology, we now operate one of the 
 inventory according to our measurement and demand partners. 

the way to establishing a common bar for the industry. We are 
contributing to help shape these standards through our work 
 Bureau (‘IAB’), our participation in the Trustworthy Accountability 
 party experts, including Nielsen, Pixalate, comScore, Integral Ad 
 test our audience quality.
In addition to ongoing enhancements to the programmatic 
platform, blinkx has also improved the experience for its 
publishers and mobile app developers by providing a new 
publisher portal and universal ad tag, and making improvements 
to our mobile software development kit (SDK) to allow for faster 
installation, easier management and improved reporting. This 
aligns with our overall strategy to provide industry-leading 
management tools and reporting to our publisher partners to help 
 opportunities. These direct-to-publisher relationships help 
strengthen our controlled supply footprint, and offer additional 
and unique placement and targeting opportunities to brands.
Data and Targeting
 with third-party proprietary data to better segment, target and 
deliver relevant advertising messages to their audiences. This 
is part of an overall trend in the industry that sees advertising 
technology converging with marketing technology, and a 
compression in the number of intermediaries and point solutions 
between the consumer and the advertisers. Brands are willing to 
pay a premium for data that provides insight and transparency 
 of aggregating supply has been our ability to leverage the data we 
 IDs and data from campaigns run across our platforms.  Not only 
will this allow the Company to offer more effective cross-device 
targeting, it also presents an opportunity to enhance location and 
 Company has already begun to explore packaging this data in 
ways that resonate with advertisers, making our supply and ad 
units more attractive because of their ability to reach consumers 
with a compelling message any time, on any device, at scale.
Creative Innovation 
Throughout the Company’s history, blinkx has provided 
differentiated ad units that enable an advertiser’s message to 
stand out in an often crowded marketplace, including unique 
video, rich media and native ad units. The call for this kind of 
 2016), 27% of US Internet users use some variety of ad blockers. 
This is due, in part, to the impact of less relevant, distracting, 
or performance-hindering creative. Thus, the need for creativity 
 and trackability. This trend is what has driven the IAB to create 
standards for L.E.A.N (Light, Encrypted, Ad choice supported, 
Non-invasive) ad formats. Not only has the Company adapted to 
support these formats, but blinkx has also invested in a creative 
management platform that allows for simple development and 
 buying environments. Through these developments, blinkx is 
able to streamline operations and simplify campaign execution, 
 experience for consumers.
The Impact of Consolidation
There are other factors that will likely impact the Company’s 
trajectory. Key among these is consolidation. According to Ad 
Exchanger, there were over 120 major M&A transactions in 
 programmatic and mobile deals. Point solutions are becoming 
increasingly unsustainable and some platforms that have achieved 
 by developing a full-stack, end-to-end platform that connects 
audiences with brands across devices, at scale, from a  

Through our Core focus on key growth areas of mobile, video and 
programmatic, blinkx is well-positioned to capture the budgets 
 solutions to reach their audience in compelling and dynamic ways. 
Over the next 12-18 months, the Company will remain focused 
on deepening our supply footprint, maintaining the highest 
quality standards, and innovating around data targeting and 
 operating environment. We are fortunate to have a capable, 
 15
US RANKINGS
RANK SELLER NAME FINAL SCORE REACH SCORE NETWORK SCORE
1 OpenX 93  A 98  A88  B89  A98    A91        A92    A
2Sovrn 93  A 96  A91  B89  A98    A91        A89    A
3
Google 
AdExchange
92  A 99  A85  B85  B97    A89        A99    A
4
Index 
Exchange
92  A 95  A92  B90  A92    A89        A87    A
5RhythmOne 91  A 93  A 90  B 88  B 97    A 88        A 97    A   
INTERNATIONAL (EX-US)
RANK SELLER NAME FINAL SCORE REACH SCORE NETWORK SCORE
1 Sovrn 94  A 95  A 96  A92  A99    A92        A86    A
2RhythmOne 94  A 92  B 97  A 93  A 98    A 86        B 89    A
3OpenX 93  A 96  A90  B93  A96    A89        A89    A
4 PubMatic 93  A 96  A94  B93  A94    A85        B87    A
5
Google 
AdExchange
93  A 99  A91  B85  B98    A87        B99    A
Pixalate’s Global Seller Trust Index, April, 2016
QUALITY RANKINGS ECOSYSTEM
The digital advertising ecosystem functions on the principle of fair value exchange. Consumers gain access to quality content online 


 producer and advertiser. 
In exchange for the consumer’s engagement, the advertiser pays the web publisher or app developer, who shares a portion of the 
revenue with the content producer. This event is repeated millions of times daily, creating a massive fragmentation challenge that must 
be solved in milliseconds at scale. blinkx solves this challenge by aggregating audiences from thousands of supply sources, and matching 
these audiences with relevant content and ads, using sophisticated algorithms and high-speed trading technology. Looking at our value 
exchange diagram, the left side of the diagram represents demand. The right half represents supply. We have grown our supply footprint 
through organic audiences and acquisitions to extend the scale, scope and reach of our revenue model. On the demand side, we have 
 prevalent means of buying and selling inventory. In the future, we expect to continue to add audiences from new and emerging sources, 

The majority of blinkx’s revenue is generated from online 
advertising through a wide range of formats and pricing options 
that include video, mobile, social, display, native, text and rich 
media covering brand and performance advertising campaigns, 
sold both directly and programmatically. Through organic growth, 
selective acquisitions and unique technological advancements, 
we have created a growing ecosystem of audiences, publishers 
and app developers. In addition to our scale, scope and reach 
across the online advertising ecosystem, we believe that blinkx 
is uniquely positioned within our competitive arena. We have 
strategically forward-integrated to enable us to service the entire 
supply side of the value chain, across all connected devices. 
This breadth includes access to professionally generated content 
through our extensive web publisher and mobile app developer 
 programmatic advertising relationships. As purchasing behavior 
within the sector has transitioned to automated, omni-channel 
 adapted in response. 
At the core of blinkx’s commercial model is technology that lets 
us target consumers by deeply understanding the context of any 
online medium, including the device they are using to access the 
 they are viewing (text, video, etc.) and the type of consumer 
 enabling us to serve the right message, at the right time. This 
proprietary technology helps us deliver ROI to the advertiser 
and relevance to the consumer. Coupled with our brand safety 
 the ad impression is viewed, and avoid the waste generated by 
 has enabled us to move from selling units to executing  
integrated, goals-driven campaigns on behalf of advertisers. 
 products that include display, rich media, contextual advertising, 
social media solutions and more. 
 audiences these partners have built. Content partners achieve 
distribution of existing content assets to an incremental audience, 
with the associated revenue share. Demand partners can access 
audiences at scale within a brand-safe environment, based on 
blinkx’s audience data and targeting capabilities. Over time, 
we have built a thriving partner ecosystem and network-effects 
model that grows in all dimensions each day, and constitutes a 
 COMMERCIAL MODEL
16
AWARENESS
(Video, Display)
INTEREST
(Social)
CONSIDERATION
(Email)
CONVERSION
(Search)
VISITS
$0.01/Visit
AUDIENCES
$0.05/Proﬁle
SIGNUPS
$0.25/Lead
PURCHASE
$1.00/Click
BRAND
PERFORMANCE
OBJECTIVES
(FORMATS)
METRICS
(EXAMPLE PRICING)
DIGITAL MARKETING
THE VALUE EXCHANGE
ATD: Agency Trading Desk, DSP: Demand Side Platform, SSP: Supply Side Platform, NWK: Network
PUBLISHERS
WEBSITE, APP
CONTENT PRODUCER
TEXT, VIDEO, PHOTOS
CONSUMER
AUDIENCE
ADVERTISER
AGENCY / BRAND
 BRAND             AGENCY         ATD         DSP           EXCHANGE         SSP            NWK         WEBSITE         CONSUMER
$$
ATTENTION ! PROGRAMMATIC TRADING
An increasingly dominant subset of our commercial model is devoted to programmatic buying and selling of inventory. The programmatic 
value chain has supply and demand sides, with a central stack of technology that enables Real-Time Bidding (RTB). The edges of this 
 planning and creative execution. The center tends to be high-tech, with value chain elements devoted to scale and trade automation. On 
the supply side, consumers are aggregated by publishers that are aggregated by ad networks, which in turn are aggregated by SSPs.
 aggregated by agencies (and their trading desks), which in turn are aggregated by DSPs.
 brand-safe environment across devices programmatically. It also enables the Company to offer its publisher partners a universal platform 
 Traditional exchanges serve as brokers between supply and demand partners, leaving advertisers to assess and measure inventory 
 blinkx’s ability to run query-time algorithms to identify poor quality impressions and block them from entering its marketplace. By 
 PRODUCTS
T E C H N O L O G Y  
(PLATFORM)
RHYTHMONE PLATFORM TECHNOLOGY
C O N T E N T  
(TEXT, VIDEO, APPS)
RHYTHMONE FOR CONTENT
CONSUMERS
(PUBLISHERS)
RHYTHMONE FOR PUBLISHERS
BRANDS
(ADVERTISERS)
RHYTHMONE FOR ADVERTISERS
ATD: Agency Trading Desk, DSP: Demand Side Platform, SSP: Supply Side Platform, NWK: Network
17
 BRAND             AGENCY         ATD         DSP           EXCHANGE          SSP           NWK         WEBSITE          CONSUMER BLINKX BELIEVES THE ONLINE  
ADVERTISING SECTOR WILL CONTINUE  
TO GROW AND TRANSFORM AT A RAPID  
PACE. THE COMPANY ALSO BELIEVES 
THAT ADVERTISERS WILL CONTINUE  
TO REWARD FULLY INTEGRATED  
SUPPLY PARTNERS THAT DELIVER  
AUDIENCE-CENTRIC, CROSS-SCREEN  
ADVERTISING CAPABILITIES AND CLEAR 
MEASUREMENT AROUND CAMPAIGN  
EFFECTIVENESS AND SUPPLY QUALITY.
18 CORPORATEGOVERNANCEREPORT
OVERVIEW
The Directors recognize the value and importance of the highest standards of Corporate Governance. We strive to comply with the
principles and provisions of corporate governance as far as practicable for a Group of its size and structure, even though as the Group is
listed on the AIM Market of the London Stock Exchange, it is not required to comply fully with the principles of Corporate Governance as
set out in the UK Corporate Governance Code (the Code). This report sets out the Governance approach.
ROLEANDCOMPOSITIONOFTHEBOARD
The Board’s role is to provide entrepreneurial leadership of the Company within the controls framework of the Group, which enables risk
to be assessed and mitigated. The Board is focused on ensuring that the risk register and management of those risks remain pertinent
in the face of a continually evolving business. The principal risks and uncertainties are reviewed regularly, and are set out on pages 10
to 11. Whilst it is recognized that the Group is subject to a number ofrisksgreaterthanthislist,weincludethosethatareofmost
concern and relevance to the business at this point in time. The Board is also responsible for articulating the Company’s strategic aims
and ensuring that the business has the resources necessary to enable the Company to meet its objectives. It also determines the
Company’s values and standards, and ensures that its obligations to shareholders are met.
The Board is comprised of one Executive Director, and the remaining six Board members are Non-Executive Directors. Corporate
governance guidelines for AIM companies issued by the Quoted Companies Alliance requirethatboardsshouldbe“balancedbetween
Executive and Non-Executive Directors, and should have at least two independent, Non-Executive Directors.” At the year-end date,
blinkx exceeds this requirement, with six of the seven Board Directors being independent, Non-Executive Directors.
The beneficial interests of the Non-Executive Directors in the share capital of the Company are set out on page 26. In the opinion of the
Board, these interests do not detract from the Directors’ independence. In the event of a conflict of interest, the relevant Director is
required to declare the conflict and, where appropriate, abstain from voting on any resolutions connected to it.
DIVISIONOFRESPONSIBILITIES
There is a clear division of responsibility at the head of the Company between the running of the Board, which is delegated to the
Chairman, Mr. Raj Chellaraj, and the executive responsibility for the running of the Company’s business, which is delegated to the Chief
Executive Officer, Mr. Subhransu (“Brian”) Mukherjee. As Chairman, Mr. Chellaraj is responsible for leadership of the Board, setting the
Board’s agenda, and ensuring that there is sufficient time available for discussion of all agenda items. The Non-Executive Directors do
not have any day-to-day involvement in the running of the business. They work together to constructively challenge and assist in the
development of strategic proposals and to fulfill the Board committee roles.
The Board convenes at regular scheduledintervalsandfollowsaformalagendaof matters specifically reserved for discussion, including
such matters as:
! determine the Group’s strategy;
! ensure open and informative communication with shareholders;
! review and manage risks;
! evaluate major capital expenditures;
! evaluate material contracts to be entered into;
! shape key operational policies;
! review and approve the Group’s business plan and forecasts;
! measure performance; and
! approve the annual and interim financial statements.
It also meets outside of the formal schedule of meetings as and when required. The number of formal meetings of the Board during the
year ended 31 March 2016, and attendance at each are summarized below:
DIRECTOR
NUMBER OFMEETINGS
DURINGAPPOINTMENT
NUMBER OFMEETINGS
ATTENDED
Raj Chellaraj 14 14
Subhransu (“Brian”) Mukherjee 14 13
Suranga Chandratillake 14 11
Mark Opzoomer 14 13
Ujjal Kohli 14 11
Judy Vezmar (resigned 18 August 2015) 73
Anthony Bettencourt (resigned 31 March 2016) 14 8
Andrea Lee (“Andy”) Cunningham (appointed 1 March 2016) - -
In the event that any Director is unable to attend a meeting, theyhavetheopportunitytorelaytheircommentsthroughtheChairman.
If the Chairman is absent, another Non-Executive Director is appointed Chairman for that meeting. At certain times, where there may
be a perceived conflict due to the subject matter of a meeting, a Director is recused from that meeting. The size and composition of the
19 Board is regularly reviewed to ensure that it is of an appropriate size and structure. The Directors may take independent professional
advice at the Group’s expense, and all are covered by Directors and Officers insurance.
BOARDCOMMITTEES
The Board has established an Audit Committee, Nomination Committee and a Remuneration Committee. These Committees comprise a
small sub-committee of the main Board and are entirely made up of Non-Executive Directors. Each has its own terms of reference and
responsibilities. The reports of each Board Committee are set out later in this document.
EFFECTIVENESS
We have considered the overall balance between Executive and Non-Executive Directors and believe that the structure of the Board,
coupled with the integrity and commitment of the individuals which make up the Board, ensures that no one individual has a greater
proportion of decision-making power. The Board has a good balance between financial, industry-specific and general business
knowledge experience, with a highly experienced executive management team. All Directors are considered able to dedicate sufficient
time to their role to ensure that they can discharge their responsibilities effectively.
On joining the Board, all new Directors receive a comprehensive induction to introduce them to thebusiness,enhancetheirknowledge
of the industry and to meet the key personnel across the Group. The Board is committed to a culture of continued personal
development, and all members of the Board are encouraged to undertake any training which will enhance their understanding or ability
to serve the Board and refresh their knowledge. Regular updates on Corporate Governance are also provided.
Board effectiveness is reviewed regularly. The most recent review, shortly after the year end, concluded that the Board and its
individual members continue to perform effectively. The review considered a general overview as to the operation of the Board, opinions
on shareholder relationships, views on the Board’s inputs into strategy, governance and compliance, risk management and succession
planning.
INFORMATIONANDSUPPORT
The Board is supplied with information in a form that enables it to discharge its responsibilities effectively. Board papers are supplied on
atimelybasis,withsufficienttimefortheBoardtoreviewandraise questions ahead of the formal meeting to which they relate. The
culture of the Board is to encourage participation andactivedebateinaconstructiveandsupportivemanner.
RELATIONSHIPSWITHSHAREHOLDERS
The Board believes in open and regular dialogue with shareholders to ensure that theobjectivesandoverallbusinessstrategyofthe
Group are effectively communicated. As such, the Chief Executive Officer, Chief Financial Officer and the Chairman, working in
consultation with the Group’s corporate brokers and advisors, make themselves available to meet shareholders at least once a year at
the Annual General Meeting. There are also a series of meetings with analysts and institutional investors in relation to the Company’s
annual and interim financial statements.
The Non-Executive Directors make themselves available to meet shareholders on an ad hoc basis as necessary, and consider the Annual
General Meeting a good opportunity to canvas opinion and hold discussions with individual shareholders. The Board makes constructive
use of the Annual General Meeting to communicate with investors and encourages full participation.
Trading updates and press releases are issued as appropriate and the Company’s brokers provide information on shareholder opinion
and compile independent feedback from investor meetings.
INTERNALCONTROLANDRISKMANAGEMENT
The Board acknowledges its responsibility for ensuring that the Group maintains a sound system of internal control to provide them with
reasonable assurance that the assets of the Group are safeguarded and that the shareholders’ investments are protected. It has
established a continuous process for identifying, evaluating and monitoring the significant risks to which the Group is exposed.
The Board has overall responsibility for ensuring the Group maintains an adequate system of internal control and risk management,
while the Audit Committee reviews the effectiveness of thosesystemsonbehalfoftheBoard.Thisreviewisperformedatleast
annually. The implementation of internal control systems is the responsibility of executive management. The organizational structure of
the Group has clearly defined lines of responsibility and delegation of accountability and authority.
The Board’s review of the significant risks in the year covered financial, operational, commercial, regulatory, fraud and R&D risks. The
risk review is an ongoing process with at least annual input and review from the Board. The prime purpose of this review is to ensure
that, having considered the controls that are in place to mitigate risks, the Board is satisfied with the residual level of risk being taken in
pursuit of the Company’s strategy.
Our risk review comprised:
! the review of the risk register, considering the ongoing pertinence of each risk, and whether changes in the business meant that
additional risks had been identified which should be added to the register. All risks were recorded in a centrally maintained register;
20 ! risk assessment, which is performed in terms of the likelihood of occurrence and the potential impact on the Group; and
! identification of appropriate mitigating actions for each risk, with responsible parties and a timetable for completion assigned.
Any system of internal control is designedtomanage,rather,thaneliminate,therisks inherent in a fast-moving industry, and can
therefore, only provide reasonable, and not absolute assurance against the possibility of material misstatement or loss. However, during
the course of its reviews of the system of internal control during theyear,theBoardhasnotidentified,norbeeninformedofany
instances of control failings or significant weaknesses.
The Board also operates a whistleblowing policy which provides for all employees to raise concerns to the Audit Committee, in strict
confidence about any unethical behaviors, suspected fraud, misconduct or wrongdoing without fear of recrimination. There were no
whistleblowing reports throughout financial year 2016, and to the date of this report.
FINANCIALREPORTING
The Board is responsible for reviewing and approving the annual and halfyearfinancialstatements,andforensuringthattheypresenta
fair, balanced and understandable assessment of the Group’s position and performance. The Strategic Report, on pages 12 to 18 sets
out the information necessary to enable readers to understand the business model and strategy.
Drafts of the annual and half year financial statements are reviewedbytheBoardpriortoapprovalwithaformalprocessforaddressing
comments from the Board.
The Board is cautious and measured in respect to investing the Group’s surplus funds and in relation to treasury planning. The Board’s
objectives are to minimize risk whilst achieving maximum return on liquid assets. Risk is limited by investing cash surplus only in
highly-rated financial institutions andinstruments.Foreigncurrencyrisksaremanagedthroughnaturalhedgeswithcurrencybank
accounts. The Group has not experienced any material exposure to price risk, liquidity risk or cash flow risk that would affect the
ultimate objectives of the Group. Further details on the Group’s financial risk management policies are included in note 25 to the
financial statements.
Detailed working capital projections and forecasts are prepared by management, and reviewed and approved by the Board at least
annually. These are updated throughout the year for significant events. Actual monthly results are comparedtoforecastsandvariances
investigated and explained by the executive management team. There are no external capital requirements or financial covenants that
the Group has to abide by, and the Board’s consideration of going concern is discussed on page 32.
21 BOARDOFDIRECTORS
The Directors who served throughout the year to 31 March 2016 and to the date of this report were as follows:
NAME AGE POSITION
Raj Chellaraj 60 Non-Executive Chairman
Suranga Chandratillake 38 Non-Executive Director
Andrea Lee (“Andy”) Cunningham 59 Non-Executive Director
Ujjal Kohli 57 Non-Executive Director
Subhransu (“Brian”) Mukherjee 49 Executive Director
Mark Opzoomer 59 Non-Executive Director
Ms. Judy Vezmar indicated her intention to resign from the Board of Directors, which was accepted by the Board on 19 May 2015.
Ms. Vezmar served out her notice period on the Board, through 18 August 2015.
On 1 July 2015, Mr. Anthony Bettencourt stepped down as Chairman of the Board of Directors and concurrently Mr. Raj Chellaraj
assumed the role.
Mr. Anthony Bettencourt indicated his intention to resign from the Board of Directors, which was accepted by the Board on 1 March
2016. Mr. Bettencourt’s resignation was effective on 31 March 2016.
On 1 March 2016, Andrea Lee (“Andy”) Cunningham joined the Board of Directors as a Non-Executive Director.
RAJCHELLARAJ
Based in Palo Alto, California, Raj currently serves as the Non-Executive Chairman of blinkx.
He also serves as Associate Dean for Finance and Administration at the Stanford Business
School and as the Chief Operating Officer at the Stanford Institute for Innovation in
Developing Economies (SEED). Prior to joining Stanford University, Raj held several senior
government positions. Most recently, he was the Assistant Secretary of State for
Administration in the United States Department of State, to which he was nominated by
President George W. Bush and confirmed unanimously by the United States Senate.
Previously, he was a Senior Executive Officer at the United States Mint in Washington DC. In
addition to his public sector expertise, Mr. Chellaraj has several years of senior corporate
leadership experience, most recently as Vice President, Planning, at Hostess Brands
Corporation, part of Ripplewood Holdings, where he was a member of the CEO’s Senior
Leadership Team. Earlier, he served as Director of Corporate Development at Celanese
Corporation, a Blackstone Group Company. He also held various management, finance,
operations and planning roles at Exxon Corporation, Strategic Analysis Inc. and FMC
Corporation. Raj holds an M.P.A. in Business and Government Policy from Harvard University, an M.B.A. in Finance from New York
University, an M.S. in Chemical Engineering from Clarkson University and a B.S. in Chemical Engineering from Madras University, India.
SURANGACHANDRATILLAKE
Suranga is a General Partner at Balderton Capital. He was previously an entrepreneur
and engineer. Suranga founded blinkx, the intelligent search engine for video and
audio content, in Cambridge in 2004. He then led the company for eight years as CEO
through its journey of moving to San Francisco, building a profitable business and
going public in London. He continues toserveontheblinkxBoard.Beforefounding
blinkx, Suranga was an early employee at Autonomy Corporation—joining as an
engineer in the Cambridge R&D team and ultimately serving as the company’s US
CTO in San Francisco.
Suranga has an M.A. in Computer Science from the University of Cambridge. He
holds patents in the areas of video discovery and online video advertising, was
elected a Fellow of the Royal Academy of Engineering in 2012, and was chosen as one
of the World Economic Forum’s Young Global Leaders in 2009.
22 ANDREALEE(“ANDY”)CUNNINGHAM
Andy brings over thirty years’ experience in buildingworldclassbrands,helpingtoaccelerate
commercial growth, increase shareholder value and advance corporate reputation. She
currently serves as founder and president ofCunninghamCollective,abrandstrategyfirm
dedicated to bringing innovation to market. The firm has worked with numerous premier
brands in various sectors including telecommunications, search, energy, media and publishing,
finance, mobile, healthcare and big data.
Andy began her career at Regis McKenna and helped Steve Jobs and Apple launch the
Macintosh computer in 1984. When Jobs left Apple to form NeXT and acquire Pixar, he
selected Andy to represent him for several years. Following her work with NeXT, Andy has
focused on marketing, branding and communication strategies for game-changing
technologies and companies. She directedproductlauncheswithinanumberofemerging
categories such as video games, personal computers, desktop publishing, digital imaging,
microprocessors, software, performance jet aviation and clean technology. Andy has previously served as CMO for both Avaya (formerly
apartofLucentTechnologiesandAT&T)andDeem(formerlyRearden Commerce), and as CEO of several organizations namely Bite
Communications, CXO Communication and Citigate Cunningham.
Ms. Cunningham currently serves on several Boards: Specialized Bicycle Components, Inc., Finelite, Inc., The Aspen Institute, Menlo
College, Northwestern University Medill School of Journalism, and ZERO1: The Art & Technology Network. Her past Board positions
include the international Board of Young Presidents’ Organization (YPO), the NorthernCaliforniachapteroftheWorldPresidents’
Organization (WPO), the international Board of Chief Executives Organization (CEO), the Peninsula Open Space Trust (POST) and the
Computer History Museum. She is an Aspen Institute Henry Crown FellowandholdsmembershipsinWPO,CEO,TEDandWomen
Corporate Directors. Andy holds a B.A. from Northwestern University.
UJJALKOHLI
Ujjal Kohli joined the Board of Directors in 2014 as a Non-Executive Director. Ujjal brings over
twenty-five years of executive management, engineering, marketing, strategy, M&A and
Board level experiences to blinkx. Ujjal co-founded and led Mountain View-headquartered
Rhythm NewMedia (“Rhythm”) as CEO, before its acquisition by blinkx in December 2013.
Under his leadership, Rhythm emerged as a dominant mobile video technology and advertising
platform for tablets and smartphones—working with ultra-premium media partners, including
NBC Universal, CBS, ABC, Fox, and Warner Bros., as well as top brand advertisers, such as
Disney, McDonald’s, General Motors, Ford, AT&T, Verizon, and Macy’s.
Ujjal is currently the CEO of Preact, a SaaS company in predictive analytics, and before Rhythm,
Ujjal co-founded and served as CEO of Meru Networks (NASDAQ: MERU). Prior to this he was
EVP of Marketing and National Sales for AirTouch Cellular, and was part of the Executive team
there. AirTouch merged with Vodafone (LSE: VOD) in a $60B transaction in 1999.
Previously, Ujjal was a consultant with McKinsey and Company in London, Los Angeles and Silicon Valley. Mr. Kohli has also been an
investor, advisor, and a previous Board member at several technology companies, including Magma Design Automation, Berkeley
Networks, ByteMobile, Maverick Semiconductor, Convergenet, and WirelessHome. Ujjal holds an M.B.A. from Harvard Business School,
an M.S. in Electrical Engineering from the University of Rochester and a BTech in Electrical Engineering from the Indian Institute of
Technology, New Delhi.
SUBHRANSU(“BRIAN”)MUKHERJEE
Brian is the Chief Executive Officer of blinkx (LSE: BLNX.L). With a strong Strategy,
Operations and Engineering background, Brian has helped build and transform several public
and private Technology and Media businesses globally. Brian joined the Company in 2011
through the acquisition of Prime Visibility Media Group, Inc. (PVMG), where he was the
President & CEO after its sale to blinkx. Before PVMG, Brian was the Senior Vice President &
Group Managing Director of Miva, Inc. (NASDAQ: MIVA), responsible for the turnaround and
eventual sale of its global Media Division. Earlier in his career, Brian held executive, staff and
line management positions at several Private Equity and Venture-backed Internet, mobile and
software companies where he played pivotal roles in building high performance teams,
accelerating growth and profitability, raising capital, mergers, acquisitions and exits. Brian
started his career as an Engineer and a Strategy Consultant. He currently serves on the
Board of Directors of Strategic Pharma Solutions, LLC and Inflexxion, Inc. Brian holds B.E.
(Honors) and M.S. (Honors) degrees in Engineering, and an M.B.A. (Honors) from the
University of Chicago, Booth School of Business.
23 MARKOPZOOMER
Mark Opzoomer has extensive knowledge of Internet, communications and media markets in
many different countries and 25 years of corporate operating and deal making experience. Mark
is currently a partner in Bond Capital Partners, a Non-Executive Director of Entertainment One
Limited, Benross Golf Limited and Non-Executive Chairman of Somo Global Limited. Previous
Non-Executive directorships include Web Reservations International Limited, Newbay Software
Limited, Autonomy plc and Miva Inc. Previous operating experience includes CEO of Rambler
Media Limited, regional Vice-President of Yahoo! Europe, Deputy Chief Executive of Hodder
Headline plc, Commercial and Finance Director of Sega Europe Ltd and Commercial Director of
Virgin Communications Ltd. Mark qualified as a chartered accountant through the Canadian
Institute of Chartered Accountants and has an M.B.A. from IMD, Lausanne, Switzerland.
24 REMUNERATIONCOMMITTEEREPORT
(UNAUDITEDUNLESSSTATEDOTHERWISE)
The Remuneration Committee (hereafter referred to as “the Committee” in this report) is appointed by the Board, and is formed of Non-
Executive Directors. The Committee was chaired by Ms. Vezmar, up to her resignation date of 19 May 2015, and subsequently chaired
by Mr. Ujjal Kohli. Other members of the Committee included Anthony Bettencourt and Suranga Chandratillake. Mr. Bettencourt
resigned from the Board and Remuneration Committee effective 31 March 2016 and was replaced by Andy Cunningham.
The Committee’s principal responsibilities are:
! to review and make recommendations in relation to the remuneration policy;
! consult with key shareholders on compensation-related proposals and recommendations;
! apply these recommendations to the Executive Director, and senior members of the executive management team;
! determine the metrics for the bonus scheme of the executive management team;
! ensure that the policies and metrics are aligned with the Company strategy; and
! to consider and award other performance-related benefits such as Restricted Stock Units (RSUs) and Market Value Share Options
(MVSOs), as and when appropriate.
The Committee met twice during the year, and details of the attendance at the meetings of the Committee are as shown below. The
Committee’s terms of reference are available for public inspection on the Company’s website—www.blnx.com
26 JUNE 2015 4 FEBRUARY2016
Ujjal Kohli ✓✓
Suranga Chandratillake ✓✓
Anthony Bettencourt ✓✓
Judy Vezmar --
An external consultant, New Bridge Street (NBS),wasappointedtoadviseonallaspectsofseniorexecutiveremuneration.NBShasno
other connection with the Company other than in the provision of advice on executive and employee remuneration. In addition, the
Company participates in the Global Technology Survey conducted by Radford, a division of the AON Hewitt Company, to benchmark
compensation structures across functions, levels and locations.
PAY PHILOSOPHY
The remuneration policy continues to be designedtoensurethatseniormanagersandExecutive Directors are appropriately incentivized
and rewarded for their performance, responsibility and experience. The Remuneration Committee aims to ensure that the policy aligns
the interests of the Executive Director with those of the shareholders.
The Company’s pay policy is designed to ensure salaries and bonus amounts are paid at or around market levels. Equity awards are
linked to performance conditions which more closely aligns with long-term value creation for shareholders.
PAY POLICY FOR EXECUTIVE DIRECTORS
Remuneration at the Company for Executive Directors is comprised of three elements: base salary, annual bonus and long-term equity
incentives. Details of the CEO’s remuneration are indicated below.
BASE SALARY AND ANNUAL BONUS
The Chief Executive’s base salary and bonus opportunity was adjusted in FY2016 to bring in line with market levels when compared to
both US and UK competitors. The bonus opportunity for FY2016 was based on achievement of FY2016 Revenue, adjusted EBITDA
targets and Management Business Objectives (‘MBOs’).
LONG-TERM INCENTIVES
During FY2016, equity awards were made in MVSOs that vest quarterly and have been in use within the Company since the IPO, but
with an additional performance component where the equity awards require a minimum stock price threshold for options to vest and an
accelerated vesting schedule upon the stock price reaching certain predetermined thresholds above the stock price at grant. The
Committee believes that along with the performance criteria for bonus eligibility that addresses operational excellence, the quantum and
performance criteria for the equity grants fully aligns the interestsoftheshareholdersandmanagement team to drive long-term value.
No other long-term plan awards, such as Restricted Share Units (RSUs), were granted during the fiscal year 2016.
25 The table below sets out the beneficial interests in shares and vested share options of the Directors holding office at year end (audited).
INTERESTSIN
ORDINARYSHARES
INTERESTSIN
SHAREOPTIONS
INTERESTSIN
RSUs TOTAL
DIRECTOR
AT
31 MARCH
2015
NUMBER
AT
31 MARCH
2016
NUMBER
AT
31 MARCH
2015
NUMBER
AT
31 MARCH
2016
NUMBER
AT
31 MARCH
2015
NUMBER
AT
31 MARCH
2016
NUMBER
AT
31 MARCH
2015
NUMBER
AT
31 MARCH
2016
NUMBER
Anthony Bettencourt 50,000 50,000 - - - - 50,000 50,000
Suranga Chandratillake 93,102 159,770 2,487,179 2,487,179 100,000 33,330 2,680,281 2,680,279
Ujjal Kohli 46,867 46,867 - - - - 46,867 46,867
Subhransu (“Brian”)
Mukherjee 550,000 750,000 2,080,000 9,080,000 300,000 100,000 2,930,000 9,930,000
Mark Opzoomer 400,000 400,000 ---- 400,000 400,000
Raj Chellaraj 50,000 50,000 - - - - 50,000 50,000
PAY POLICY FOR NON-EXECUTIVE DIRECTORS
Fees for Non-Executive Directors are set with reference to time commitment, the number of committees chaired and relevant external
market benchmarks. Other than covering travel expenses, no additional fees or equity compensation is provided to Non-Executive
Directors for ad hoc services, such as Committee memberships, Board meetings, etc.
PAY AND CONDITIONS ELSEWHERE IN THE GROUP
No element of remuneration is operated exclusively for Executive Directors and the philosophy of using variable remuneration to drive
the Company’s performance is applied to all roles throughout the Group. All employees are eligible for an annual bonus and some senior
roles are eligible to receive share options. When setting the quantum of remuneration for Executive Directors, the Committee considers
the pay differential between Executive Directors and other roles.
SERVICE AGREEMENTS
The Chief Executive’s Service Agreement provides that his employment with the Company is onan“atwill”basiswhichmeansthat
either the Executive or the Company shall be entitled to terminate employment at any time, and for any reason, with or without cause.
In line with typical US practice, the Service Agreement includes a number of protections for the Chief Executive in the event of a
termination of his employment in certain circumstances.
All Non-Executive Directors’ appointments are terminable on at least three months’ notice on either side.
The current service contracts and letters of appointment of the Directors include the following terms:
DIRECTOR DATEOFCONTRACT NOTICEPERIOD
EXECUTIVE DIRECTORS:
Subhransu (“Brian”) Mukherjee 19 July 2012 3 months
NON-EXECUTIVE DIRECTORS:
Ujjal Kohli, Chairman 20 February 2014 3 months
Suranga Chandratillake 9May2007 3months
Mark Opzoomer 9May2007 3months
Raj Chellaraj 1October2014 3months
Andrea Lee (“Andy”) Cunningham 1March2016 3months
26 DIRECTORS’REMUNERATIONREPORT(AUDITED)
The Directors received the following remuneration for the years ended 31 March 2016 and 31 March 2015.
DIRECTOR
BASE
SALARY/
NED FEES
$
ANNUAL
BONUS
$
LONG-TERM
INCENTIVES
$
OTHER
FEESPAID
INRSUs
$
YEARENDED
31 MARCH
2016 TOTAL
$
YEARENDED
31 MARCH
2015 TOTAL
$
EXECUTIVE DIRECTOR AND
HIGHEST PAID DIRECTOR:
Subhransu (“Brian”) Mukherjee 500,000 62,000
2
913,000
3
-1,475,000 992,000
NON-EXECUTIVE DIRECTORS:
Anthony Bettencourt 75,000 - - - 75,000 81,000
Suranga Chandratillake 75,000 - 87,000 - 162,000 175,000
Raj Chellaraj 108,000 - - - 108,000 69,000
Ujjal Kohli 75,000 - - - 75,000 109,000
Mark Opzoomer 75,000 - - - 75,000 81,000
Judy Vezmar 30,000 - - - 30,000 81,000
AGGREGATE EMOLUMENTS 938,000 62,000 1,000,000 - 2,000,000 1,588,000
1
Non-Executive Directors’ fees are set at £50,000 for all Directors except for the Chairman of Board whose fees are set at £80,000. The
above table includes the value in $ using an exchange rate of $1.50 to £1.
2
Bonus payments are made to Executive Directors only andaredeterminedbasedonthefollowingperformanceconditions:individual
Executive Directors’ MBOs and Company operating performance. Annual Bonus amount was earned in FY2015, but paid in FY2016. No
additional Bonus was earned or paid in FY2016.
3
Long-term incentive awards represent awards of MVSOs and RSUs issued to Executive Directors which vested during the year. Long-
term incentive value represents the notional gain on MVSOs or RSUs, but are not realized until the awards are sold. The aggregate
value of the long-term incentives as at 31 March 2016 was $nil.
None of the Directors had pension, retirement benefits or similar entitlement. No payment or awards were made to former Directors
during the year, and no payments were made in compensation for loss of office.
Aggregate emoluments disclosed above do not include any amounts for the value of MVSOs to acquire ordinary shares or restricted
stock units in the Company granted to or held by any Directors. Details of the options and RSUs exercised during the year are as
follows:
DIRECTOR SCHEME NUMBER
RANGE OF
MARKET
PRICESAT
VESTDATE
£
GAINS ON
VESTIN
YEARENDED
31 MARCH2016
$
GAINS ON
VESTIN
YEARENDED
31 MARCH2015
$
Subhransu (“Brian”) Mukherjee RSUs 200,000 0.17–0.28 72,000 125,000
Suranga Chandratillake RSUs 66,670 0.17–0.28 24,000 42,000
TOTAL 266,670 96,000 167,000
Details of options and RSUs for Directors who served during the year are as follows:
DIRECTOR SCHEME(S)
AT31 MARCH
2015
NUMBER
GRANTED
NUMBER
VESTED
NUMBER
LAPSED
NUMBER
AT31 MARCH
2016
NUMBER
Subhransu (“Brian”) Mukherjee Options
RSU
2,080,000
300,000
7,000,000
-
-
(200,000)
-
-
9,080,000
100,000
Suranga Chandratillake Options
RSU
2,487,179
100,000
-
-
-
(66,670)
-
-
2,487,179
33,333
LONG-TERMINCENTIVES
Details of the contractual RSU awards and long-term incentive awards vesting during the year are as follows:
DIRECTOR SCHEME(S)
NUMBER
VESTED
RANGE OF
MARKETPRICES
ATAWARDDATE
£
RANGE OFMARKET
PRICESAT
VESTINGDATE
£
Subhransu (“Brian”) Mukherjee blinkx US share option plan
RSUs
2,272,802
200,000
0.28–0.84
1.55
0.17–0.28
0.17–0.28
Suranga Chandratillake blinkx US share option plan
RSUs
88,416
66,670
0.49–0.84
1.55
0.17–0.28
0.17–0.28
TOTAL 2,627,888
27 AUDITCOMMITTEEREPORT
The Audit Committee (hereafter referred to as “the Committee” in this report) is appointed by the Board, and is formed of Non-
Executive Directors, chaired by Mark Opzoomer. Other members of the Committee are Suranga Chandratillake and Raj Chellaraj.
Its principal responsibilities are:
! monitoring the integrity of the financial statements of the Group and any formal announcements relating to the Group’s financial
performance;
! overseeing the involvement of the Group’s external auditors, in planning and reviewing the audit of the financial statements;
! recommending the appointment and fees of the external auditor, including maintaining an appropriate policy on the level of non-
audit fees;
! reviewing and monitoring the independence and objectivity of the external auditor, and the effectiveness of the external audit
process;
! reviewing, at least annually, the need for an internal audit function;
! reviewing the risk management process, and the effectiveness of internal controls, including identifying and implementing
improvements; and
! reviewing the arrangements through which staff may raise concerns about possible improprieties in confidence.
The Committee met five times during the year, and details of the attendance at the meetings of the Committee are as shown below. The
Committee’s terms of reference are available for public inspection on the Company’s website—www.blnx.com
12 MAY
2015
19 OCTOBER
2015
9 NOVEMBER
2015
4 FEBRUARY
2016
17 MARCH
2016
Mark Opzoomer, Chairman ✓✓✓✓✓
Suranga Chandratillake - - ✓✓ -
Raj Chellaraj ✓✓✓✓✓
Ujjal Kohli ✓ ----
As of 26 June 2015, Mr. Kohli was no longer a member of the Audit Committee.
The Committee promotes the highest standards of integrity, financial reporting, risk management and internal control. In addition to the
members of the Committee, meetings are typically also attended by the Chief Executive Officer and the Chief Financial Officer. The
Committee meets the external auditors at least three times a year, including at least one meeting each year without members of
executive management present. The Committee should include at least one financially qualified individual with recent and relevant
experience, and currently Mark Opzoomer, a qualified chartered accountant who trained with Coopers & Lybrand, and Raj Chellaraj, who
has an M.B.A. in Finance from New York University, fulfill these criteria.
The Board has overall responsibility for the establishment and oversight oftheGroup’sriskregister,including the identification and
evaluation of any newly recognized risks and implementing mitigating actions on a timely basis. The Committee assists the Board in its
oversight and monitoring of financial reporting, risk management and internal controls.
The Committee has considered the recent FRC guidance on audit committees, and has expanded its report to include more information
on significant matters considered by the Committee.
There has been a particular focus throughout the year on ensuring that the Group’s risk management and internal controls are
adequately evolving and developing in line with changes in the Group and best practices in the industry. During the year, the
Committee engaged Moss Adams LLP to continue a review of its controls overthekeyfinancialreportingareas,toensurethatcontrols
remained robust and enabled executive management to be satisfied as to the reliability of the Group’s internal systems and processes.
ASSESSMENTOFTHEEXTERNALAUDITOR
Each year the Committee assesses the expertise, independence and quality of the external auditor, and the objectivity and effectiveness
of the audit process. This assessment was carried out on the basis of the Committee’s own appraisal of the performance of the auditor
and the views of its senior management team as well as consideration of materials provided by the auditor.
The criteria used for this assessment remained unchanged from last year and were as follows:
! delivery of a thorough and efficient audit in compliance with agreed plan and timescales;
! provision of accurate, robust and perceptive advice on key accounting and audit judgments, technical issues and best practices;
! a high level of professionalism and technical expertise consistently demonstrated by all audit staff;
! plans for ensuring the maintenance of continuity within the core audit team; and
! strict adherence to independence policies and other regulatory requirements.
Independence and objectivity are regularly considered by the Committee, taking into consideration, the relevant UK professional and
regulatory requirements and the audit firm’s own policies to maintain auditor independence, which include rotation of the Senior
Statutory Auditor every five years.
Our policy on non-audit services is to appoint the adviser who we believe is in the best position to advise the Company on the matter in
question, and, where we believe we are best served by our audit firm, auditor objectivity and independence is carefully considered and
safeguarded via the monitoring of fees paid in respect of audit and non-audit work and approving all additional work performed by the
external auditor.
28 REVIEWOFFINANCIALSTATEMENTSANDAUDITFINDINGS
The Committee reviews the full- and half-year financial statements, and the reports from the auditor on these statements. It takes the
opportunity to discuss key accounting matters with the auditor and the range of approaches to each.
Significant matters which were specifically considered by the Committee in the year were as follows:
ISSUE SPECIFICCONSIDERATIONS
Impairment of goodwill and intangible assets In light of the current trading conditions and in accordance with IAS 36, management
prepared an impairment review on a CGU basis.
The Committee discussed the calculations, including the assumptions within, the
methodology applied and the anticipated forecasts. It also reviewed the auditor’s
report detailing the results and conclusion of the audit testing.
Revenue recognition The Committee keeps under close review, the revenue recognition policies of the
Group, with particular reference to the appropriateness of the revenue recognition
policies of acquired businesses, and the continued pertinence of the policies in the
legacy blinkx business.
INTERNALAUDIT
The Committee considers the need for an internal audit function at least annually. Given the size of the Group and the organization of
the finance team into centers of excellence,whichareoverseenbyanexperiencedCFO,and considering the robustness and integrity of
the internal controls of the Group which are overseen centrally, the Committee is of the opinion that no internal audit function is
required at this time, but will keep this matter under close scrutiny.
The Committee has however, engaged Moss Adams to document the Group’s key controls, and initiate a rolling testing strategy of those
controls, similar to the controls oversight that wouldbeexercisedbyaninternalauditfunction.
29 NOMINATIONCOMMITTEEREPORT
The Nomination Committee is appointed by the Board and is responsible for:
! the structure, size and composition of the Board;
! the diversity on the Board, and across the Group;
! advising the Board on areas where further recruitment may be appropriate;
! the overall leadership needs of the organization;
! consideration of succession planning for Directors; and
! the search for and selection of suitable candidates for the appointment or replacement of additional Directors.
The Nomination Committee (hereafter “the Committee” throughout this report) was chairedbyAnthonyBettencourt.Mr.Chellarajand
Ujjal Kohli are also members of the Committee. Mr. Bettencourt resigned from the Board and Nomination Committee effective 31 March
2016 and his responsibilities were absorbed by Raj Chellaraj.
The Committee met four times during the year, and details of the attendance at the meetings of the Committee are as shown below.
The Committee meets as required to initiate the selection process of, and make recommendations to the Board with regard to the
appointment of new Directors. The Committee’s terms of reference are available for public inspection on the Company’s
website—www.blnx.com
15 JULY
2015
4 SEPTEMBER
2015
4 FEBRUARY
2016
5 MARCH
2016
Raj Chellaraj ✓✓✓✓
Anthony Bettencourt ✓✓✓✓
Ujjal Kohli ✓✓✓✓
APPOINTMENTOFNEWDIRECTORS
During the year, the Committee met and made recommendations to the Board regarding the appointment of Andrea Lee (“Andy”)
Cunningham as Non-Executive Director.
Ms. Cunningham’s appointment was made in order to increase the Board’s independent Director base, strengthen marketing and public
relations experience, enhance the Board’s independence and to maintain the Board’s size and composition following Anthony
Bettencourt’s decision to step down from the Board effective 31 March 2016.
Where considered appropriate, the Committee will engage recruitment consultants to assist in the identification of and communication
with potential Board members. During the year the Committee engaged the consulting firm of Heidrick & Struggles to assist in the
Board of Directors search.
The Articles of Association require that any Director appointed by the Board shall, unless appointed at such meeting, hold office only
until the dissolution of the next Annual GeneralMeetingoftheCompanyfollowingappointment.
RE-ELECTIONTOTHEBOARD
Following evaluation of the Board, we consider that the performance of all members of the Board continues tobeeffective,andthatall
individuals demonstrate appropriate commitment to their roles. In accordance with best practice and the Company’s articles of
Association, which require at least one third of Directors to be subject to re-electionateachAnnualGeneralMeeting,MarkOpzoomer
and Ujjal Kohli retire by rotation and will stand for reappointment while Andrea Lee (“Andy”) Cunningham will stand for appointment at
the AGM on 16 June 2016.
DIVERSITYPOLICY
The Board recognizes the value in diversity in itsrichestsense,andconsidersitessential in maximizing its effectiveness. The Group
approaches diversity comprehensively, in order to recruit the best talent available at all levels in the business, based on merit, and
assessed against criteria such as: range of skills, experience and independence.
30 DIRECTORS’REPORT
The Directors present their annual report on the affairs of the Group, together with the Financial Statements and auditor’s report for the
year ended 31 March 2016. This report contains certain statutory, regulatory and other information and incorporates, by reference, the
strategic report and Corporate Governance reports included earlier in this document.
The table below sets out the location of certain information specifically related to thebusinessreview:
CONTENT SECTION PAGE(S)
Review of the Business and Future Developments Strategic Review, Chairman and CEO Reports 1–7
Principal Risk and Uncertainties CFO Report 10–11
Corporate Governance Corporate Governance Report 19-21
Directors, Re-election and Appointment Corporate Governance Report and Nomination Committee
report 19-30
Directors’ Interests Remuneration Committee Report 25-27
Key Performance Indicators CFO Report 8–9
Research and Development CFO Report 8–9
CAPITALSTRUCTURE
Details of the issued share capital, together with details of the movements in the Company’sissuedsharecapitalduringtheyear,
including the issue of 2,136,359 shares, are shown in note 20. The Company has one class of ordinary shares, which carry no right to
fixed income. Each share carries the right to one vote at general meetings of the Company.
There are no specific restrictions on the size of a holding nor on thetransferofshares,whicharebothgovernedbythegeneral
provisions of the Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of
the Company’s shares that may result in restrictions on the transfer of securities or on voting rights. Details of employee share schemes
are set out in note 24.
There are shares reserved to be issued relating to former Burst shareholders, as part of the consideration, who have not yet submitted
the paperwork to affect the exchange of Burst shares for blinkx shares. No person has any special rights of control over the Company’s
share capital and all issued shares are fully paid.
FINANCIALINSTRUMENTS
The Group’s financial risk management objective is to minimize risk whilst achieving maximum return on liquid assets. The Directors are
averse to principal loss and manage the safety and preservation of the Group’s invested funds by limiting default and market risks by
investing only with highly-rated financial institutions.
The Group’s financial instruments primarily comprise cash and cash equivalents, marketable securities,loans,tradereceivablesand
payables from operations. No derivative financial instruments are used. Foreign currency risks are managed through natural hedges
arising from currency bank accounts.
The Group has not faced any material exposure to price risk, liquidity risk, or cash flow risk that would affect the ultimate objectives of
the business. See note 25.
RESULTSANDDIVIDENDS
The results of the Group are set out in theConsolidatedStatementofComprehensiveIncomeonpage38.
The Directors do not recommend the payment of a dividend (2015: $nil). The Group’s current policy, which is kept under regular
review, is to retain future earnings for the development and expansion of the business.
CHARITABLEANDPOLITICALDONATIONS
No charitable or political donations were made during the year.
DIRECTORS’INDEMNITIES
The Group has made qualifying third party indemnity provisions for the benefit of its Directors which remain in force at the date of this
report.
EMPLOYEECONSULTATION
The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters
affecting them as employees and on the various factors affecting the performance of the Group. This is achieved through formal and
informal meetings, the Group Intranet site and internal communications from the management team.
31 Employees are consulted regularly on a wide range of matters affecting their current and future interests. We value employees’ opinions
and seek to actively consult them in the decision making process and keep them apprisedofcompanynews.Company-widebriefings
and communications are held and feedback is actively sought from all employees.
The employee share option scheme has been running successfully since itsinceptionandisopentoallemployees.Inaddition,
employees typically receive an annual bonus related to the overall profitability of the Group.
EQUALOPPORTUNITIES
Our employment policies, including a commitment to equal opportunity, are designed to attract and retain high-caliber individuals,
regardless of age, sex, religion, disability, marital status, race, ethnicity, nationality or sexual orientation.
blinkx is an equal opportunities employer and ensures that applications for employment from people with disabilities and other under-
represented groups are given full and fair consideration.
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned.
In the event of members of staff becoming disabled, every effort is made to ensure that their employment with the Group continues and
that appropriate training is arranged and support provided, including flexible working to assist re-entry into the workplace and making
any necessary alternate provisions. It is our policy to provide equally to all staff, training and career development for growth within the
Company, and to explore objectively, through performance appraisal, opportunities for employee advancement.
We take measures to ensure good working conditions. Employees are expected at all times to act honestly, respectfully, and in
accordance with our Company ethos. The Company does not tolerate misconduct or harassment in any form and will diligently
investigate and, where necessary, take action against any complaints therein, including those of confidential “whistle blowers.”
SUBSTANTIALSHAREHOLDINGS
On 31 March 2016, the Company had been notified of the following voting rights as a shareholder of the Company:
NUMBER SHARES %
Toscafund Asset Management 116,407,105 28.78%
Hargreaves Lansdown Asset Mgt 29,821,496 7.37%
Mr. Richard Griffiths 29,677,915 7.34%
TD Direct Investing 22,325,674 5.52%
Barclays Wealth Mgt (UK) 21,637,200 5.35%
Total shares outstanding at 31 March 2016 404,462,870
During the period between 29 April 2016 and 1 May 2016 the Company received notification of the following voting rights as a
shareholder of the Company:
NUMBER SHARES %
Toscafund Asset Management 116,401,705 28.76%
Mr. Richard Griffiths 29,677,915 7.33%
Hargreaves Lansdown Asset Mgt 29,505,668 7.29%
TD Direct Investing 22,434,545 5.54%
Barclays Wealth Mgt (UK) 20,669,330 5.11%
Total shares outstanding at 29 April 2016 404,723,075
POSTBALANCESHEETEVENTS
There are no significant post balance sheet events.
GOINGCONCERN
The Directors have considered the financial resources of the Group and the risks associatedwithdoingbusinessinthecurrenteconomic
climate and believe the Group is well placed to manage these risks successfully. In doing this, theBoardhasreviewedmanagement’s
business plan and cash flow forecast setting out key business assumptions, including the rate of revenue growth, margins and cost
control. The Directors consider the assumptionsthereintobereasonableandthattheGroup has adequate resources to continue in
operational existence for the foreseeable future, being a period of no less than 12 months from the date of signing this Annual Report.
Accordingly, they continue to adopt the going concern basis in preparing these financial statements.
32 ANNUALGENERALMEETING
The Annual General Meeting will be held at 200 Aldersgate Street, London, EC1A 4HD, United Kingdom on 16 June 2016 at 9:00 AM
BST. Members of the Board will present on recent developments and the performance of the business and shareholders will have the
opportunity to ask questions of the Board members present.
AUDITOR
Each of the persons who is a Director at the date of approval of this Annual Report confirms that:
! so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and
! the Director has taken all of the steps that he/she ought to have taken as a Director in order to make him/herself aware of any
relevant audit information and to establish that the Company’s auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.
STATEMENTOFDIRECTORS’RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial statements, in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared
the Group and parent Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted
by the European Union. Under Company law the Directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In
preparing these financial statements, the Directors are required to:
! select suitable accounting policies and then apply them consistently;
! make judgments and accounting estimates that are reasonable and prudent;
! state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed
and explained in the financial statements; and
! prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to
ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the
Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing
the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
33 FINANCIAL STATEMENTS
34 INDEPENDENTAUDITOR’SREPORTTOTHEMEMBERSOF
BLINKXPLC
REPORTONTHEFINANCIALSTATEMENTS
OUR OPINION
In our opinion:
! blinkx plc’s group financial statements and company financial statements (the “financial statements”) give a true and fair view of the
state of the group’s and of the company’s affairs as at 31 March 2016 and of the group’s loss and the group’s and the company’s
cash flows for the year then ended;
! the group financial statements have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”)
as adopted by the European Union;
! the company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act 2006; and
! the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
WHAT WE HAVE AUDITED
The financial statements, included within the Annual Report and accounts (the “Annual Report”), comprise:
! the Consolidated and company balance sheets as at 31 March 2016;
! the Consolidated income statement and the Consolidated statement of comprehensive income for the year then ended;
! the Consolidated and company cash flow statements for the year then ended;
! the Consolidated and company statements of changes in equity for the year then ended; and
! the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.
Certain required disclosures have been presented elsewhere in the Annual Report, rather than in the notes to the financial statements.
These are cross-referenced from the financial statements and are identified as audited.
The financial reporting framework that has been applied in the preparation of the financial statements is IFRSs as adopted by the
European Union, and applicable law and, as regards the company financial statements, asappliedinaccordancewiththeprovisionsof
the Companies Act 2006.
In applying the financial reporting framework, the directors have made a number of subjective judgments, for example in respect of
significant accounting estimates. In making such estimates, they have made assumptions and considered future events.
OPINIONONOTHERMATTERSPRESCRIBEDBYTHECOMPANIESACT2006
In our opinion, the information given in the Strategic Report and theDirectors’Reportforthefinancialyearforwhichthefinancial
statements are prepared is consistent with the financial statements.
OTHERMATTERSONWHICHWEAREREQUIREDTOREPORTBYEXCEPTION
ADEQUACY OF ACCOUNTING RECORDS AND INFORMATION AND EXPLANATIONS RECEIVED
Under the Companies Act 2006 we are required to report to you if, in our opinion:
! we have not received all the information and explanations we require for our audit; or
! adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from
branches not visited by us; or
! the company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
DIRECTORS’ REMUNERATION
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors’ remuneration
specified by law are not made. We have no exceptions to report arising from this responsibility.
RESPONSIBILITIESFORTHEFINANCIALSTATEMENTSANDTHEAUDIT
OUR RESPONSIBILITIES AND THOSE OF THE DIRECTORS
As explained more fully in the Statement of Directors’ Responsibilities setoutonpage33,thedirectorsareresponsibleforthe
preparation of the financial statements and for beingsatisfiedthattheygiveatrueandfairview.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). Those standards require us tocomplywiththeAuditingPractices
Board’s Ethical Standards for Auditors.
35 This report, including the opinions, has been preparedforandonlyforthecompany’smembersasabodyinaccordancewithChapter3
of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
WHAT AN AUDIT OF FINANCIAL STATEMENTS INVOLVES
We conducted our audit in accordance with ISAs (UK & Ireland). An auditinvolvesobtainingevidenceabouttheamountsand
disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an assessment of:
! whether the accounting policies are appropriate to the group’s and the company’s circumstances and have been consistently applied
and adequately disclosed;
! the reasonableness of significant accounting estimates made by the directors; and
! the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the directors’ judgments against available evidence, forming our own
judgments, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to theextentweconsidernecessarytoprovidea
reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive
procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the
audited financial statements and to identify any information that is apparently materially incorrect based on,ormateriallyinconsistent
with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements
or inconsistencies we consider the implications for our report.
Jaskamal Sarai (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Uxbridge
17 May 2016
36 CONSOLIDATEDINCOMESTATEMENT
FORTHEYEARENDED31MARCH2016
NOTE
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Revenue 5166,716214,969
Cost of revenue (100,440) (120,445)
Research and development (30,196) (30,068)
Sales and marketing (41,536) (58,591)
Administrative expenses (14,478) (13,651)
Total cost and expenses (186,650) (222,755)
Loss from operations before acquisition and exceptional costs and amortization of
purchased intangibles* (19,934) (7,786)
Amortization of purchased intangibles
Research and development (3,030) (3,525)
Sales and marketing (5,830) (8,763)
Administrative expenses (250) (72)
(9,110) (12,360)
Acquisition and exceptional costs 26 (65,295) (4,662)
Loss from operations (94,339) (24,808)
Other expense (39) (12)
Finance income 256 58
Finance costs (162) (38)
Loss before taxation (94,284) (24,800)
Tax 10 2,031 4,001
Loss for the year attributable to equity holders of the parent before acquisition
and exceptional costs, amortization of purchased intangibles and other
(expense)/income** (17,809) (3,765)
Loss for the year attributable to equity holders of the parent (92,253) (20,799)
NOTE CENTS CENTS
LOSS PER SHARE
BASIC 11 (22.88) (5.19)
ADJUSTED BASIC** 11 (4.42) (0.94)
DILUTED 11 (22.88) (5.19)
ADJUSTED DILUTED** 11 (4.42) (0.94)
*Adjustedforacquisitionandexceptionalchargesof$65.3m(2015:$4.7m)andamortizationofpurchasedintangiblesof$9.1m(2015:
$12.3m).
** Adjusted for acquisition and exceptional charges of $65.3m (2015: $4.7m), amortization of purchased intangibles of $9.1m (2015:
$12.3m) and other expense of $0.04m (2015: $0.01m).
37 CONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOME
FORTHEYEARENDED31MARCH2016
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Loss for the year (92,253) (20,799)
Other comprehensive loss which is potentially reclassifiable to loss:
Exchange difference on translation of foreign operations (34) (333)
Unrealized gains on Marketable Securities 19 -
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (92,268) (21,132)
38 CONSOLIDATEDBALANCESHEET
ASAT31MARCH2016
NOTE
ASAT
31 MARCH2016
$‘000
ASAT
31 MARCH2015
$‘000
ASSETS
NON-CURRENT ASSETS
Goodwill 12 37,207 87,520
Intangible assets 13 24,200 43,806
Property, plant and equipment 14 3,358 3,340
Other receivables and restricted cash 16 828 1,071
Deferred tax asset 18 19,208 19,128
Marketable securities 17 29,539 -
114,340 154,865
CURRENT ASSETS
Trade receivables 16 22,825 37,741
Other receivables 16 2,422 7,193
Cash and cash equivalents 18,222 95,734
Marketable securities 17 30,725 -
74,194 140,668
TOTAL ASSETS 188,534 295,533
LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liability 18 (318) (59)
Other payables 19 (1,679) (1,189)
Provisions for liabilities and charges 19 (5) (172)
(2,002) (1,420)
CURRENT LIABILITIES
Trade and other payables 19 (29,894) (49,839)
Provisions for liabilities and charges 19 (700) (577)
(30,594) (50,416)
TOTAL LIABILITIES (32,596) (51,836)
NET ASSETS 155,938 243,697
SHAREHOLDERS’ EQUITY
Share capital 20 7,537 7,502
Share premium account 21 168,045 168,008
Shares to be issued 22 24 1,686
Share-based compensation reserve 26,590 22,175
Currency translation reserve (8,836) (8,802)
Merger reserve 65,208 63,554
Accumulated other comprehensive income 19 -
Retained (deficit)/earnings (102,649) (10,426)
TOTAL EQUITY 155,938 243,697
Note 1 to note 28 form on integral part of the financial statements
The consolidated financial statements of blinkx plc (registered number 06223359) were approved by the Board of Directors and
authorized for issue on 17 May 2016. They were signed on its behalf by:
Subhransu (“Brian”) Mukherjee
Chief Executive Officer
blinkx plc
17 May 2016
39 CONSOLIDATEDSTATEMENTOFCHANGESINEQUITY
FORTHEYEARENDED31MARCH2016
ORDINARY
SHARE
CAPITAL
$‘000
SHARE
ACCOUNT
PREMIUM
$‘000
SHARES
TOBE
ISSUED
$‘000
SHAREBASED
COMPENSATION
RESERVE
$‘000
CURRENCY
TRANSLATION
RESERVE
$‘000
MERGER
RESERVE
$‘000
OTHER
RESERVES
$‘000
RETAINED
(DEFICIT)/
EARNINGS
$‘000
TOTAL
EQUITY
$‘000
BALANCE AS AT
31 MARCH 2014 7,461 167,945 3,579 17,322 (8,469) 61,681 - 12,372 261,891
Net loss for the year - - - - - - - (20,799) (20,799)
Other comprehensive loss - - - - (333) - - - (333)
Total comprehensive loss for
the year - - - - (333) - - (20,799) (21,132)
Issue of shares, net of costs 41 63 (1,893) - - 1,873 - - 84
Credit to equity for Share-
based payments - - - 4,853 - - - - 4,853
Tax movement on share options - - - - - - - (1,999) (1,999)
BALANCE AS AT
31 MARCH 2015 7,502 168,008 1,686 22,175 (8,802) 63,554 - (10,426) 243,697
Net loss for the year - - - - - - - (92,253) (92,253)
Other comprehensive loss - - - - (34) - 19 - (15)
Total comprehensive loss for
the year - - - - (34) - 19 (92,253) (92,268)
Issue of shares, net of costs 35 37 (1,662) - - 1,654 - - 64
Credit to equity for Share-
based payments - - - 4,415 - - - - 4,415
Tax movement on share options - - - - - - - 30 30
BALANCE AS AT
31 MARCH 2016 7,537 168,045 24 26,590 (8,836) 65,208 19 (102,649) 155,938
40 CONSOLIDATEDCASHFLOWSTATEMENT
FORTHEYEARENDED31MARCH2016
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
CASH FLOWS FROM OPERATING ACTIVITIES
LOSS FROM OPERATIONS (94,339) (24,808)
Adjustments for:
Depreciation and amortization 26,180 18,819
Share based payments 4,415 4,853
Non-cash acquisition and exceptional costs -240
Impairment of goodwill 50,322 -
Loss on sales of computer equipment 56 25
Change in provisions (490) 712
Foreign exchange gain 3143
OPERATING CASH FLOWS BEFORE MOVEMENTS IN WORKING CAPITAL (13,853) (16)
CHANGES IN OPERATING ASSETS AND LIABILITIES
Decrease in trade and other receivables 18,350 9,863
Decrease in trade and other payables (14,967) (10,367)
(10,470) (520)
Income tax (paid)/refund received 4,182 (2,469)
NET CASH USED IN OPERATING ACTIVITIES (6,288) (2,989)
CASH FLOWS FROM INVESTING ACTIVITIES
Net interest received 134 20
Purchase of property, plant and equipment (741) (730)
Purchase of software -(1,587)
Capitalization of internal development charges (4,353) (3,885)
Proceeds from the sale of computer equipment 449
Purchase of marketable securities (60,245) -
Acquisition payment of deferred consideration (5,000) -
Acquisitions, net of cash acquired -(21,747)
NET CASH USED IN INVESTING ACTIVITIES (70,201) (27,880)
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments on finance lease (1,080) (92)
Proceeds from issuance of shares 64 84
NET CASH USED IN FINANCING ACTIVITIES (1,016) (8)
Net decrease in cash and cash equivalents (77,505) (30,877)
Beginning cash and cash equivalents 95,734 126,909
Effect of foreign exchange on cash and cash equivalents (7) (298)
ENDING CASH AND CASH EQUIVALENTS 18,222 95,734
41 NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
1GENERALINFORMATION
blinkx plc is a Company incorporated in England and Wales under the Companies Act 2006. The address of the registered office is
40 Dukes Place, London, EC3A 7NH, United Kingdom. The nature of the Group’s operations and its principal activities are set out in
the Strategic Report.
The Company’s functional currency is Sterling, being the currency of the primary economic environment in which the Company
operates. The presentational currency of the Group is US Dollars as that is the currency of the primary economic environment in
which the Group operates. Foreign operations are included in accordance with policies set out in note 3.
2ADOPTIONOFNEWANDREVISEDSTANDARDS
The following new and revised Standards and Interpretations have been adopted in the current Period. Their adoption has not had
any significant impact on the amounts reported in these consolidated financial statements but may impact the accounting for
future transactions and arrangements.
Amendments to IAS 19, ‘Employee benefits’ on defined benefit plans
Annual improvements 2010-2012:
IFRS 2, ‘Share based payment’ on definition of a vesting condition
IFRS 3, ‘Business combinations’ to clarify obligations to pay contingent consideration
IAS16, ‘Property plant and equipment’ and IAS 38, ‘Intangible assets’ on gross carrying amount and depreciation are treated with
revaluation model
IFRS 8, ‘Operating segments’ on disclosure of judgments
IAS 24, ‘Related party disclosures’ regardingdisclosuresofthereportingentity
At the date of authorization of these consolidated financial statements, the following Standards and Interpretations which have not
yet been applied in these consolidated financial statements were in issue but not yet effective:
IFRS 5, ‘Non-current assets held for sale and discontinued operations’ regarding methods of disposal
IFRS 7, ‘Financial instruments: Disclosures’
IAS 19, ‘Employee benefits’
IAS 34, ‘Interim financial reporting’
IFRS 14, ‘Regulatory deferral accounts’
Amendment to IFRS 11 ‘Joint arrangements’ on Accounting for acquisitions of interests in joint operations
Amendments to IAS 16, ‘Property plant and equipment’ and IAS 41, ‘Agriculture’ on Agriculture: Bearer plants
Amendments to IAS 16, ‘Property plant and equipment’ and IAS 38, ‘Intangible assets’ on clarification of acceptable methods of
depreciation and amortization
Amendments to IAS 27, ‘Separate financial statements’ on equity method in separate financial statements
Amendments to IFRS 10, ‘Consolidated financial statements’ and IAS 28, ‘Investments in associates’, on Investment entities:
Applying the consolidation exception
Amendments to IAS 1, ‘Presentation of financial statements’ Disclosure initiative
Amendments to IFRS 10, ‘Consolidated financial statements’ and IAS 28, ‘Investments in associates’ on the sale or contribution
between an investor and its associate or joint venture
Amendment to IAS 12, ‘Income taxes’, ‘Recognition of deferred tax assets for unrealised losses’
Amendment to IAS 7, ‘Cash flow statements’, Disclosure initiative
IFRS 9, ‘Financial instruments’
IFRS 15, ‘Revenue from contracts with customers’
IFRS 16, ‘Leases’
The Directors do not expect that the adoption of the other standards listed above will have a material impact on the financial
statements of the Group in future periods other than IFRS 15 “Revenue from contracts with Customers” which may impact the way
the Group recognizes revenue in future periods.
3SIGNIFICANTACCOUNTINGPOLICIES
BASIS OF ACCOUNTING
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the European Union and the Companies Act 2006
applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical
convention as modified.
The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a
higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in note 4.
The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out
below.
42 GOING CONCERN
The Directors have, 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.Theycontinuetoadoptthegoingconcern
basis of accounting in preparing the financial statements. Further detail is contained in the Directors’ Report on page 32.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company
(its subsidiaries) prepared up to 31 March each year. Control is achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included intheconsolidatedincomestatementfromthe
effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the
financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.
All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
GOODWILL
Goodwill arising on consolidation represents the excess of the cost of acquisition over theGroup’sinterestinthefairvalueofthe
identifiable assets and liabilities of a subsidiary, associate or jointlycontrolledentityatthedateofacquisition.
Goodwill is initially recognized as an asset at cost and is subsequently measured atcostslessanyaccumulatedimpairmentlosses.
Goodwill which is recognized as an asset is reviewed for impairmentatleastannually.Anyimpairment is recognized immediately in
profit or loss and is not subsequently reversed.
Goodwill is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the
recoverable amount is less than the carrying amount, the impairment loss is allocated to reduce the carrying amount of goodwill.
An impairment loss recognized for goodwill is not reversed in a subsequent period.
REVENUE RECOGNITION
The Group earns its revenue from providing online advertising services.
The Group’s business is based on the principle of facilitatingfreeaccesstotechnologyandcontent via an advertising-supported
distribution model and its revenues are derived from advertising on the Internet. The Group applies its technology across a set of
standard and inter-related products to connect its audience with contextually relevant advertising in a variety of formats.
Advertisers select from these formats which are priced on different pricing schemes that include both impression-based, Cost per
Mille (CPM), and performance-based, Cost per Click (CPC) and Cost per Action (CPA) options.
Contracts containing multiple deliverables are split into their constituent parts andeachdeliverable’sfairvalueisseparately
determined and recognized accordingly.
The policies for each of the Group’s key revenue streams in relation to services are set out below:
ADVERTISING REVENUE
When sales values are based on the volume of impressions (Cost per Mille), revenue is based on an agreed amount per impression
and the number of impressions displayed. This revenue is recognized as the volumes are reported either by the Group’s customers,
the Group’s internal reporting system or an authoritative third party, based on the contractual terms. When sales values are based
on volume of clicks (pay per click), revenue is based upon an agreed amount per click that the end user makes after viewing the
advertisement and the number of clicks made by the users, in the period in which the clicks occur.
SHARE OF ADVERTISING REVENUES
Where customers use the blinkx technology to retrieve their own content, contractual arrangements may provide for the Group to
receive a share of the customer’s advertising revenues. The amount of revenue is dependent upon the amount paid per click or per
advert shown. This revenue is recognized as reported by the Group’s customers, in the period to which it relates.
MEDIA BUYING REVENUES
Revenue from media buying services may consist of various arrangements involving commissions, fees, incentive-based revenue or
acombinationofthethree,asagreeduponwitheachclient.Revenue arising is recognized ratably over the term of an agreement.
E-COMMERCE REVENUES
The Group generates revenues from e-commerce partners when an e-commerce transaction is referred to the partner from another
vendor. Revenues are recognized upon completion of the transaction.
UPFRONT LICENSE PAYMENT AND RELATED REVENUES
In certain cases customers will enter into a license agreement to license the right to use the blinkx technology. The revenue is in
the form of an up-front non-refundable payment with all future advertising revenues accruing directly to the customer.
43 Revenues from software license agreements are recognized where there is persuasive evidence of an agreement with a customer
(a signed contract and/or binding purchase order), delivery of the software hastakenplace,thepriceisagreeduponand
collectability is probable.
Revenue from subscription-based services isrecognizedratablyoverthecontractterm beginning on the commencement date of
each contract.
INVESTMENT REVENUE
Investment revenues include bank interest and income from short-term deposits.
CLASSIFICATION OF EXPENSES
COST OF REVENUES
Cost of revenues consists primarily of traffic acquisition costs (TAC) that are directly attributable to revenue generated by the
Group.
RESEARCH AND DEVELOPMENT
Research and development expenses consist primarily of compensation and related costs for personnel responsible for the research
and development of new and existing products and services, in addition to co-locations and facilities charges.
Where required, development expendituresarecapitalizedinaccordancewiththeGroup’sstandardinternalcapitalized
development policy. All research costs are expensed when incurred.
SALES AND MARKETING
Sales and marketing expenses consist primarily of compensation and related costs for personnel engaged in customer service,
sales, and sales support functions, as well as advertising and promotional expenditures that are not directly attributable to
revenue, in addition to facilities charges.
GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of compensation and related costs for personnel and facilities, and include
costs related to our facilities, finance, human resources, information technology, and legal organizations, and fees for professional
services. Professional services are principally comprised of outside legal, audit, information technologyconsulting,andoutsourcing
services.
ACQUISITION AND EXCEPTIONAL COSTS
In line with the way the Board and chief operating decision-maker review the business, large one-off acquisition and exceptional
costs are separately identified and shown in the financial statements. The types of costs included within acquisition costs are those
which are directly attributable to an acquisition, for example legal and accounting expenses, integration costs, severance and
retention remuneration. An example of the type of cost considered exceptional is severance costs, impairment losses and other
significant assets writedowns.
LEASING
Leases are classified as finance leases whenever the terms of theleasetransfersubstantiallyallthe risks and rewards of ownership
to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are recognizedasassetsoftheGroupattheirfairvalueor,iflower,atthepresentvalueofthe
minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the
balance sheet as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate
of interest on the remaining balance of the liability. Finance expenses are recognized immediately in profit or loss, unless they are
directly attributable to qualifying assets, in which case they are capitalized in accordance with the Group’s general policy on
borrowing costs.
Rentals payable under operating leases are charged to income onastraight-linebasisovertheterm of the relevant lease except
where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset
are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are
incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability. The
aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis, except where another
systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
FOREIGN CURRENCIES
Transactions in currencies other than the functional currency of the entity concerned are recorded at the rates of exchange
prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated into the presentational currency, US Dollars, at theratesprevailingonthebalancesheetdate.
The Group has selected US Dollars as its presentational currency as that is the currency of the principal economic environment in
which the Group operates.
44 Exchange differences are recognized in profit or loss in the period inwhichtheyariseexceptforexchangedifferencesonmonetary
items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore
forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income and
reclassified from equity to profit or loss on disposal or partial disposal of the net investment.
On consolidation, the assets and liabilities of the Group’s foreign denominated operations are translated at exchange rates
prevailing on the balance sheet date. Income andexpenseitemsaretranslatedatthe average exchange rates for the Period unless
exchange rates fluctuate significantly. Exchange differences arising, if any, are classified as equity and transferred to the Group’s
translation reserve. Such translation differences are recognized as income or as expenses in the period in which the operation is
disposed of.
TAXATION
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable or receivable is based on taxable loss/profit for the year. Taxable loss/profit differs from net loss/profit
as reported in the income statement because it will exclude items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using
the balance sheet liability method.
Deferred tax liabilities are recognized for all taxable temporary differencesanddeferredtaxassetsarerecognizedtotheextent
that it is probable that taxable profits are available against which deductible temporary differences can be utilized. Such assets and
liabilities will not be recognized if the temporary difference arises from goodwill or from theinitialrecognition(otherthanina
business combination) of other assets andliabilitiesinatransactionthataffectsneither the tax profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary differencesarisingoninvestmentsinsubsidiariesandassociates,and
interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable
that the temporary difference will notreverseintheforeseeablefuture.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits are available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is
realized. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly
to equity, in which case the deferred tax will also be dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttaxassetsagainstcurrent
tax liabilities and when they relate to income taxes levied by the same tax authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost less accumulated depreciation and any recognized impairment loss. Cost includes
expenditure that is directly attributable to the acquisition of the assets.
Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the straight-line method, on
the following bases:
Fixtures, fittings, office and computer equipment Over 3–5 years
Leasehold improvements Over shorter of economic life or lease term
The gain or loss arising from the disposal or retirement of an assetisdeterminedasthedifference between the sales proceeds and
the carrying amount of the asset and is recognized in income.
INTERNALLY-GENERATED INTANGIBLE ASSETS—RESEARCH AND DEVELOPMENT EXPENDITURE
Expenditure on research activities is recognized as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from the Group’s product development isrecognizedonlyif all of the following
conditions are met:
! the product from which the asset arises meets the Group’s criteria for technical feasibility, so it will be available for use;
! the asset is intended to be completed, and will be used or sold;
! the asset created is expected to generate demonstrable future economic benefits;
! the development cost of the asset can be measured reliably; and
! adequate technical, financial and other resources are available to complete development of the asset.
45 Internally-generated intangible assets are amortized on a straight-line basis over their useful life, which is considered to be three
years starting when the associated technology is available for use. Where no internally-generated intangible asset can be
recognized, development expenditure is recognized as an expense in theperiodinwhichitisincurred.
OTHER INTANGIBLE ASSETS EXCLUDING GOODWILL
Other intangible assets excluding goodwill are measured initially at purchase cost or at fair value if acquired as part of a business
combination, and are amortized on a straight-line basis over their estimated useful lives, on the following bases:
Tradenames, patents and trademarks 3–10 years
Software licences 3 years
Purchased technology 3–5 years
Relationships with publishers and customers 3–12 years
IMPAIRMENT OF ASSETS EXCLUDING GOODWILL
At each balance sheet date, the Group will review the carryingamountsofitstangibleandintangibleassetstodeterminewhether
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognized as an expense immediately, unless the relevant asset is carried at a revalued amount, in which
case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increasedcarryingamountdoesnotexceedthecarryingamountthat
would have been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A
reversal of an impairment loss is recognized as income immediately, unless the relevant asset is carried at a revalued amount, in
which case the reversal of the impairmentlossistreatedasarevaluationincrease.
PROVISIONS
Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that the Group will be
required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at
the Directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date, taking into account risks
and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows.
ArestructuringprovisionisrecognizedwhentheGrouphasdeveloped a detailed formal plan for the restructuring and has raised a
valid expectation in those affected that it will carry out the restructuring by starting to implementtheplanorannouncingitsmain
features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from
the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the
ongoing activities of the entity.
Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is considered
to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it.
SHARE-BASED PAYMENTS
The Group applies IFRS 2 Share-based Payments in accounting for its Share-based Compensation plans.
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured
at fair value at the date of grant by use of an appropriate valuation model. The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line basis over the vestingperiod,basedontheGroup’sestimateof
shares that will eventually vest.
Fair value is measured by use of the Black-Scholes and Monte Carlo models. The expected life used in the model has been
adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioral
considerations.
At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the
effect of non market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognized in profit
and loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves.
46 When the options are exercised, the Company issues new shares. The proceeds received, net of any directly attributable costs are
credited to share capital (nominal value) and share premium.
RETIREMENT BENEFITS
Payments to a defined contribution scheme are charged as an expense as they fall due.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities arerecognizedintheGroup’sbalancesheet when the Group becomes a party to the
contractual provisions of the instrument.
LOANS AND RECEIVABLES
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market
are classified as loans and receivables. Loans and receivables are measured at amortized cost using the effective interest method,
less any impairment. Interest income is recognized by applying the effective interest rate, except for short-term receivables when
the recognition of interest would be immaterial.
RESTRICTED CASH
Where required, the Group keeps amounts on deposit with financial institutions as a condition of certain property leases. This cash
may not be used by the Group and is held as security against the lease. At the cessation of the lease, the cash restrictions cease,
and the cash will be immediately accessible. Until this time, the cash is classified as “Restricted cash” in non-current assets.
IMPAIRMENT OF FINANCIAL ASSETS
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are
subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could
include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past
the average credit period, as well as observable changes in national or local economic conditions that correlate with default on
receivables.
For financial assets carried at amortized cost, the amount of the impairment isthedifferencebetweentheasset’scarryingamount
and the present value of the estimated future cash flows, discounted at the financial asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of
trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is
considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off
are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or
loss.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
MARKETABLE SECURITIES
Marketable securities represent the Group’s investments in corporate bonds, commercial papers, government bonds, collateralized
securities and certificates of deposit. These are recognized either as current or non-current assets, in accordance with their
maturity. Marketable securities are carried at fair value with the change in its fair value recognized directly in the Statement of
Comprehensive Income. Interest income anddividendsonmarketablesecuritiesisrecognized in the Income Statement, as well as
any foreign exchange gains and losses and impairment losses.
FINANCIAL LIABILITIES AND EQUITY
Financial liabilities and equity instruments are classified according to the substance of thecontractualarrangementsenteredinto.
EQUITY INSTRUMENTS
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 recorded at the proceeds received, net of direct issue costs.
FINANCIAL LIABILITIES
All financial liabilities are classified as ‘other financial liabilities.’
OTHER FINANCIAL LIABILITIES
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial
liabilities are subsequently measured at amortized cost using the effective interest method,withinterestexpenserecognizedonan
effective yield basis. The effective interest method is a method of calculating the amortized cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of thefinancialliabilityor,whereappropriate,ashorterperiod,tothenetcarrying
amount on initial recognition.
DERECOGNITION OF FINANCIAL LIABILITIES
The Group derecognizes financial liabilities when, and only when, the Group’sobligationsaredischarged,canceledortheyexpire.
47 DERIVATIVE FINANCIAL INSTRUMENTS
The Group does not use derivative financial instruments.
BUSINESS COMBINATIONS
Acquisitions of subsidiaries and businesses are accounted for usingtheacquisitionmethod.Theconsiderationforeachacquisition
is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and
equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or
loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration
arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of
acquisition where they qualify as measurement period adjustments. Allothersubsequentchangesinthefairvalueofcontingent
consideration classified as an asset or liability are accounted for in accordance with relevant IFRSs. Changes in the fair value of
contingent consideration classified as equity are not recognized.
Where a business combination is achieved in stages, the Group’s previously-held interests in theacquiredentityareremeasuredto
fair value at the acquisition date (i.e., the date the Group attains control) and the resulting gain or loss, if any, is recognized in
profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in
other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were
disposed of.
The acquiree’s identifiable assets, liabilities andcontingentliabilitiesthatmeettheconditions for recognition under IFRS 3 (Revised
2008) are recognized at their fair value at the acquisition date, except that:
! deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured
in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
! liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment awards are
measured in accordance with IFRS 2 Share-based Payment; and
! assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations are measured in accordance with that Standard.
If the initial accounting for a business combination is incompletebytheendofthereportingperiodinwhichthecombination
occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are
adjusted during the measurement period or additional assets or liabilities are recognized, to reflect new information obtained about
facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of
that date.
The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts
and circumstances that existed as of the acquisition date, and is subject to a maximum of one year.
Acquisition costs are as defined in IFRS 3 and are written off as incurred.
Exceptional costs are defined as non-recurring costs incurred outside of the Group’s normal operations.
4CRITICALJUDGMENTSANDKEYSOURCESOFESTIMATIONUNCERTAINTY
CRITICAL JUDGMENTS IN APPLYING THE GROUP’S ACCOUNTING POLICIES
The following are the critical judgments apart from those involving estimations (which are dealt with separately below), that the
Directors have made in the process of applying the Group accounting policies and that have the most significant effect on the
amounts recognized in the financial statements.
REVENUE RECOGNITION
In making its judgment with regard to revenue recognition, the Directors have considered the detailed criteria for the recognition
of revenue for the provision of services set out in IAS 18 ‘Revenue’ and the policy in note 3, in particular regarding whether the
debt is collectable.
There is a policy in relation to the sales and doubtful debt allowance and the Directors have exercised judgment in relation to this.
IDENTIFICATION AND VALUATION OF ACQUIRED INTANGIBLES
In making judgments in relation to the identification, valuation and useful economic life of acquired intangibles, the Directors base
their assessment on valuation reports prepared by an expert third party at the time of an acquisition.
KEY SOURCES OF ESTIMATION UNCERTAINTY
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period,
are discussed below.
48 IMPAIRMENT OF GOODWILL
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating unit (CGU) to which
goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows of the CGU and a
suitable discount rate in order to calculate present value. The carrying amount of goodwill at the balance sheet date was
$37,207,000 (2015: $87,520,000).
SUBSIDIARY INVESTMENTS
The Company’s initial valuation of its investments in its subsidiary undertakings are based on cost and subsequent capital
contributions. The Directors have considered the criteria in IAS 36, Impairment of Assets, in assessing the carrying value.
DEFERRED TAX ASSET
In determining the level of recognition of the deferred tax assets, the Directors have considered the level of future taxable profits
that are expected to be received in the foreseeable future.
SHARE OPTION CHARGE
In calculating the share option charge, the Directors have considered the expected life of the option, the volatility of the Company’s
share price, the risk free rate and anticipated rate of leavers.
5SEGMENTALANALYSIS
blinkx plc is organized internally along function lines with each line reporting to the Group’s chief operating decision-maker, the
Chief Executive Officer. The primary function lines include: finance, human resources, operations, marketing, sales, business
development, technology and product development. Each of these functions supports theoverallbusinessactivities; however, they
do not engage in activities from which they earn revenues or incur expenditure in theiroperationswitheachother.Nodiscrete
financial information is produced for these functional lines. The Group’s chiefoperatingdecision-makerisultimatelyresponsiblefor
entity-wide resource allocation decisions and evaluates the performance of the Group on a Group-wide basis. The Company
integrates acquired businesses and products into the blinkx business model such that separate management financial data on
these entities is not generally maintained post-acquisition. Acquired businesses immediately benefit from the primary function lines
noted above and their products and services are enhanced by the inclusion of blinkx technology, functionality and the Group’s
wider sales channels to the market.
The Group operates a global Internet business and its commercial activity is not generated from distinguishable geographic origins.
Although the Group has operations in several geographic locations, no discrete financial performance information is maintained on
aregionalbasisbecauseofthegloballydistributednatureoftherevenuesandhighdegreeoffunctionalintegrationamongthe
different geographic locations. Consequently, decisions around the allocation of resources are not determined on a regional basis
and the chief operating decision-maker does not assess the Group’s performance on a geographic basis. Consequently, the Group’s
chief operating decision maker reviews financial information for the Group as a whole, determining where to allocate resources and
drive business forward by examining consolidated results showing underlying results adjusted for acquisition and exceptional
charges and amortization of purchased intangibles.
The Group’s business is based on the principle of facilitating free access to content via an advertising-supported distribution model
and its revenues are derived from online advertising. The Group applies its technology across a set of standard and inter-related
products to connect its audience with contextually relevant advertising. Advertisers select from several product types which are
priced on different pricing schemes. Each of the products generates revenues from a mix of the various pricing methodologies.
There is considerable overlap among the products and advertisers and it is not meaningful to separate the revenues by primary
pricing scheme or product. Consequently, separate financial information is not reviewed by the chief operating decision-maker for
the various products to assess their performance or for the purpose of resource allocation decisions.
As a consequence of the above factors the Group has one operating and reportable segment in accordance with IFRS 8 “Operating
Segments.”
IFRS 8 also requires information on any customer who accounts for 10% or more of the combined revenue. There is one customer
who accounts for 12.56% of the combined current year revenue (2015: one customer accounted for 10.02% of combined
revenue).
Geographical analysis of the Group’s revenues, including analysisbetweentheGroup’scountryofdomicileandothercountries,is
not disclosed under IFRS 8 as materially all the customers are US-based.
As required in accordance with IAS 18 “Revenue” an analysis of the Group’s revenue is as follows:
NOTE
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
CONTINUING OPERATIONS
Rendering of services 166,716 214,969
49 6LOSSFORTHEYEAR
Loss for the year is stated after charging/(crediting):
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Net foreign exchange losses 3143
Operating lease payments (see note 23) 3,461 3,463
Research and development costs (excluding amortization of intangibles below) 16,198 21,961
Depreciation of property, plant and equipment: (see note 14)
-Owned 1,050 1,776
-Leased 1,122 100
Amortization of intangibles: (see note 13)
-Relationshipswithcustomers&publishers(included in Sales and marketing) 8,994 4,557
-Purchasedtechnology(includedinResearch and development) 6,525 3,525
-Capitalizeddevelopmentcosts(includedinResearchanddevelopment) 6,816 3,836
-Tradenames,trademarksandpatents(includedinSalesandmarketing) 766 4,206
-Softwarelicenses(includedinResearchanddevelopment) 657 746
-Non-competeagreement(Administrativeexpenses) 250 72
Loss on disposal of property and equipment 56 25
Acquisition and exceptional costs (see note 26) 65,295 4,662
Staff costs (see note 8) 45,588 50,434
Impairment loss recognized on trade receivables (see note 16) 585 1,846
7AUDITORSREMUNERATION
The analysis of auditor’s remuneration is as follows:
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Fees payable to the Company’s auditor for the audit of the Company’s
annual financial statements 362 371
Fees payable to the Company’s auditor and their associates for other services
to the Group:
-TheauditoftheCompany’ssubsidiariespursuanttolegislation 32 33
-Auditrelatedassuranceservices 70 -
Total audit fees 464 404
Tax services 145 36
Total non-audit fees 143 36
TOTAL 609 440
2016 non-audit services include legal entity restructuring advice.
8STAFFCOSTS
The average monthly number of employees (including Directors) and related staff costs was:
YEARENDED
31 MARCH2016
NUMBER
YEARENDED
31 MARCH2015
NUMBER
Sales and marketing 185 191
Research and development 86 90
Administration and operations 45 40
TOTAL 316 321
50 YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Wages and salaries 36,066 41,869
Share based compensation 4,415 4,853
Social Security costs 2,579 2,892
Other pension costs 59
43,065 49,623
Other employee benefits and costs 4,291 4,297
Costs allocated to internally-generated assets (1,768) (3,486)
INCLUDED IN LOSS FROM OPERATIONS 45,588 50,434
Refer to Directors’ Remuneration Report for details of amounts paid to Directors.
9INVESTMENTINCOMEANDEXPENSE
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Interest receivable on cash and cash equivalents 256 58
Interest on obligations under finance leases (162) (38)
NET FINANCE INCOME 94 20
10 TAX
NOTE
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Current tax — current year 1,514 (3,411)
— prior year adjustment (3,755) 3,080
Deferred tax 210 (3,670)
(2,031) (4,001)
The Finance Act 2013 which provided for reductions in the main rate of corporation tax for 23% to 21% effective from 1 April 2014
and to 20% effective from 1 April 2015, was substantively enacted on 22 July 2013, These rate reductions have been reflected in
the calculation of deferred tax at the balance sheet date. Taxation forotherjurisdictionsiscalculated at the rates prevailing in the
respective jurisdictions. A change to the UK corporation tax rate was announced in the Chancellor’s Budget on 16 March 2016. The
change announced is to reduce the main rate to 17% from 1 April 2020. Changes to reduce the UK corporation tax rate to 19%
from 1 April 2017 and to 18% from 1 April 2020 had already been substantively enacted on 26 October 2015. As the change to
17% had not been substantively enacted at the balance sheet date its effects are not included in these financial statements. The
overall effect of that change, if it had applied to the deferred tax balance at the balance sheet date, would not be material.
The credit for the year can be reconciled to the loss per the income statement as follows:
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Loss before tax (94,284) (24,800)
Tax at UK corporation rate of 20% (2015: 21%) (18,857) (5,208)
Adjustment for overseas tax rate (14,814) (2,694)
Tax effect of expense not deductible in determining taxable profit/loss 1,700 185
Tax effect of impairment not deductible in determining taxable profit/loss 16,797 -
Reduced tax in subsidiaries operating in other jurisdictions (1,347) (2,695)
Research and development tax credits -(1,245)
Deferred tax not recognized/utilisation of tax losses 16,850 3,273
Impact of share-based payments 1,394 1,303
Adjustment in respect to prior years (3,755) 3,080
TAX (CREDIT)/CHARGE (2,031) (4,001)
Under IAS 12 Income Taxes the amount of tax benefit that can be recognized in the income statement is limited by reference to
the IFRS 2 “Share-based payment charge.” A charge of $30,000 (2015: $1,999,000 tax benefit) in respect of share options was
recognized in equity. This comprises a current tax charge recognized in equity of $1,000 (2015: $40,000 benefit) and a deferred
tax benefit recognized in equity of $31,000 (2015: $1,959,000 charge).
51 11 EARNINGSPERSHARE
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
LOSS
Loss used in calculation of basic and diluted earnings per share (92,253) (20,799)
Loss used in calculation of adjusted basic earnings per share* (17,809) (3,765)
SHARES SHARES
NUMBER OF SHARES
Weighted average number of sharesforthepurposeofbasicandadjusted*
basic earnings per share 403,198,763 400,908,111
Weighted average number of shares for the purpose of diluted and adjusted*
diluted earnings per share 403,198,763 400,908,111
*Adjustedforacquisitionandexceptionalchargesof$65.3m(2015:$4.7m),amortizationofpurchasedintangiblesof$9.1m
(2015: $12.3m) and other expense of $0.04m (2015: $0.01m).
In accordance with IAS 33 “Earnings per share” as the Group made a loss for the year. The inclusion of potentially dilutive options
and shares to be issued would have an antidilutive effect on the loss per share for the Period. The impact of these has therefore
been excluded from the calculation for the year ended 31 March 2016.
12 GOODWILL
The Group tests goodwill for impairment annually or more often if there are indications that it may be impaired. The carrying
amount of goodwill has been allocated between the CGUs:
ASAT
31 MARCH2015
$‘000
RECLASSIFICATIONS
AND ACQUISITION
ADJUSTMENTS
$‘000
IMPAIRMENT
CHARGE
$‘000
ASAT
31 MARCH2016
$‘000
Burst 25,000 (25,000) - -
Rhythm NewMedia 24,306 (24,306) - -
LYFE Mobile 2,242 (2,242) - -
All Media Network 1,892 (1,892) - -
RhythmOne - 53,449 (32,363) 21,086
blinkx 2,417 - (2,417) -
PVMG 21,663 - (15,542) 6,121
AdKarma 10,000 - - 10,000
TOTAL 87,520 9 (50,322) 37,207
During the Period, blinkx launched a major initiative to consolidate certain product, infrastructure, sales and marketing efforts
under a single trade name, RhythmOne. Due to these integration steps, the CGUs of Burst, Rhythm NewMedia, LYFE Mobile and All
Media Network have been combined into the RhythmOne CGU. In addition, the Company took decisive steps to build out its Core
mobile, video and programmatic capabilities and began to limit investments in historical product lines that are considered
Non-Core, including certain Desktop products, services and technologies. Based on these actions and an adjusted forecast due to
weaker than expected performance of some products, certain value of Goodwill related to Non-Core legacy assets acquired was
impaired as the recoverable amount was less than its carrying value, leading to a non-cash impairment charge of $50.3 million.
The key assumptions for the value in use calculations are those regarding the discount rates, revenue growth rates and terminal
growth rate.
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next five
years and extrapolates cash flows into perpetuity using a terminal growth rate of 2% [RhythmOne and AdKarma] and 0% [PVMG
and blinkx] (2015: 2% all CGUs). This rate is based on an estimated long-term growth rate for the industry and countries in which
blinkx operates, and does not exceed the average long-term growth rate for the relevant markets based on the historical
Consumer Price Index in the United States.
The rate used to discount the forecast cash flows is 19% (2015: 16%) for all CGUs. Management estimates discount rates using
pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs.
52 The assumptions for growth rates are based on past experience of each CGUs trading performance and are consistent with industry
analyst expectations. The assumptions used differ between CGUs, reflecting the differencesinproducts,customersandsuppliers
between each CGU. The compound annual growth rates of the assumptions applied over the forecast period for each CGU are as
follows:
2016
REVENUE
GROWTH
RATE
2015
REVENUE
GROWTH
RATE
RhythmOne 14.90% -
blinkx (5.00%) 5.00%
AdKarma 6.21% 17.90%
PVMG 2.45% 1.52%
Rhythm NewMedia -8.32%
LYFE Mobile -33.37%
All Media -15.55%
Burst -4.42%
13 INTANGIBLEASSETS
RELATIONSHIPS
WITH
CUSTOMERS&
PUBLISHERS
$‘000
PURCHASED
TECHNOLOGY
$‘000
CAPITALIZED
DEVELOPMENT
COSTS
$‘000
TRADENAMES,
TRADEMARKS
&PATENTS
$‘000
SOFTWARE
LICENSES
$‘000
TOTAL
$‘000
COST
At 31 March 2014 30,747 15,725 10,523 7,117 5,425 69,537
Additions - - 3,885 - 1,592 5,477
Acquired through acquisitions 8,480 2,100 - 3,110 - 13,690
Exchange differences (47) (71) (871) (50) (215) (1,254)
At 31 March 2015 39,180 17,754 13,537 10,177 6,802 87,450
Additions - - 4,283 24 46 4,353
Acquired through acquisitions - 60 - 10 - 70
At 31 March 2016 39,180 17,814 17,820 10,211 6,848 91,873
ACCUMULATED AMORTIZATION
At 31 March 2014 (10,531) (6,728) (4,157) (1,889) (4,500) (27,805)
Amortization (4,629) (3,525) (3,836) (4,206) (746) (16,942)
Exchange differences 76 71 725 16 215 1,103
At 31 March 2015 (15,084) (10,182) (7,268) (6,079) (5,031) (43,644)
Amortization (8,994) (6,525) (6,816) (1,016) (657) (24,008)
Exchange differences - - (21) - - (21)
At 31 March 2016 (24,078) (16,707) (14,105) (7,095) (5,688) (67,673)
NET BOOK VALUE
At 31 March 2016 15,102 1,107 3,715 3,116 1,160 24,200
At 31 March 2015 24,096 7,572 6,269 4,098 1,771 43,806
53 14 PROPERTY,PLANTANDEQUIPMENT
COMPUTER
EQUIPMENT
$‘000
FIXURES,FITTINGS
AND OFFICE
EQUIPMENT
$‘000
LEASEHOLD
IMPROVEMENTS
$‘000
TOTAL
$‘000
COST
At 1 April 2014 5,132 1,502 673 7,307
Additions 2,146 257 50 2,453
Acquired on acquisitions of subsidiaries 88 136 20 244
Disposal (180) - - (180)
Exchange differences (50) (13) (15) (78)
At 31 March 2015 7,136 1,882 728 9,746
Additions 1,880 38 341 2,259
Acquired on acquisitions of subsidiaries - - - -
Disposal (162) (88) (4) (254)
Exchange differences (13) (3) (3) (19)
At 31 March 2016 8,841 1,829 1,062 11,732
ACCUMULATED DEPRECIATION
At 1 April 2014 (3,488) (872) (326) (4,686)
Depreciation (1,418) (358) (100) (1,876)
Disposal 106 - - 106
Exchange differences 44 6 - 50
At 31 March 2015 (4,756) (1,224) (426) (6,406)
Depreciation (1,695) (317) (160) (2,172)
Disposal 133 60 1 194
Exchange differences 7 2 1 10
At 31 March 2016 (6,311) (1,479) (584) (8,374)
NET BOOK VALUE
At 31 March 2016 2,530 350 478 3,358
At 31 March 2015 2,380 658 302 3,340
The carrying value of assets under finance lease at 31 March 2016 was $2.0m (2015: $1.6m).
15 SUBSIDIARIES
NAME OFCOMPANY
NATURE OF
BUSINESS
PROPORTIONOFALLOTTED
SHARECAPITALHELD
(DIRECTLYORINDIRECTLY)
COUNTRYOF
REGISTRATION
RhythmOne (US) Holdings, Inc. Holding company 100% United States
Blinkx (UK2), Ltd Holding company 100% United Kingdom
Blinkx UK Ltd Trading company 100% United Kingdom
RhythmOne, LLC Trading company 100% United States
Pinball (Canada), Inc. Holding company 100% Canada
Blinkx (Canada), Inc. Trading company 100% Canada
Prime Visibility Media Group, LLC Trading company 100% United States
Prime Visibility, LLC Trading company 100% United States
Verti Technology Group, Inc Trading company 100% United States
Pinball Corporation Holding company 100% United States
AdKarma, LLC Trading company 100% United States
Blinkx (UK) Holding Ltd Holding Company 100% United Kingdom
AdOn Network LLC Trading Company 100% United States
54 16 OTHERRECEIVABLESANDRESTRICTEDCASH
(i) Trade and Other Receivables
ASAT
31 MARCH2016
$‘000
ASAT
31 MARCH2015
$‘000
CURRENT ASSETS
Trade receivables 24,246 39,846
Sales and doubtful debts allowance (1,421) (2,105)
NET TRADE RECEIVABLES 22,825 37,741
Other receivables and deposits 39 466
Prepayments 2,383 6,727
OTHER RECEIVABLES 2,422 7,193
NON CURRENT ASSETS
Other receivables 200 237
Restricted cash amounts 628 834
OTHER RECEIVABLES AND RESTRICTED CASH 828 1,071
The average credit period taken on sales is 49 days (2015: 63 days).
Refer to the financial instruments note 25 for information on credit risk.
Movement in the sales and doubtfuldebtsallowanceisasfollows:
ASAT
31 MARCH2016
$‘000
ASAT
31 MARCH2015
$‘000
Balance at beginning of the Period 2,105 1,389
Receivables written off during the year as uncollectible (1,269) (1,130)
Provision for receivables impairment 585 1,846
Balance at end of the Period 1,421 2,105
AGING OF PAST DUE BUT NOT IMPAIRED RECEIVABLES
As at 31 March 2016, trade receivables of $8.0 million (2015: $11.3 million) were past due but not impaired. These relate to a
number of independent customers for whom there is no recent history of default. The aging analysis of these trade receivables is
as follows:
ASAT
31 MARCH2016
$‘000
ASAT
31 MARCH2015
$‘000
1–90days 3,728 10,578
in excess of 90 days 4,264 731
TOTAL PAST DUE BUT NOT IMPAIRED 7,992 11,309
AGING OF PAST DUE AND IMPAIRED RECEIVABLES
As at 31 March 2016, trade receivables of $1.4 million (2015: $1.7 million) were impaired. The aging of these receivables is as
follows:
ASAT
31 MARCH2016
$‘000
ASAT
31 MARCH2015
$‘000
1–90days 17 41
in excess of 90 days 1,404 1,620
TOTAL PAST DUE AND IMPAIRED 1,421 1,661
55 The Directors have considered the credit quality of assets neither past due nor impaired and do not consider further credit
provision is required in excess of the allowance for sales and doubtful debts. No interest has been charged for overdue debts in the
period.
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
(ii) Cash and Cash Equivalents
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of one month
or less. The carrying amount of these assets approximates their fair value.
(iii) Restricted Cash
Restricted cash is classified in non–current assets as it is not immediately accessible by the Group.
17 MARKETABLESECURITIES
2016 2015
Balance at beginning of the Period --
Additions 60,245 -
Net gain recorded in other reserves 19 -
Balance at the end the Period 60,264 -
Less non-current portion (29,539) -
Current portion 30,725 -
Marketable securities include the following:
2016 2015
Listed securities:
Corporate and government debt instruments 59,461 -
Unlisted securities:
Certificates of deposit 803 -
TOTAL 60,264 -
Marketable securities are denominated in US dollar.
The maximum exposure to credit risk at the reporting date is thecarryingvalueofthedebtsecuritiesclassifiedasmarketable
securities.
None of these financial assets are either past due or impaired.
18 DEFERREDINCOMETAX
Deferred tax is calculated in full on temporary differences under theliabilitymethodusingthesubstantively enacted tax rates of
the jurisdictions in which the temporary differences are expected to reverse.
(i) Recognized Deferred Tax Assets/Liabilities
Deferred tax assets have been recognized in respect of tax losses and other deductible temporary differences where it is probable
that these assets will be recovered.
The movements in deferred tax assets and liabilities (including offsetting of balances within the same jurisdiction as permitted
under IAS 12) during the period is shown below. Deferred taxassetsandliabilitiesareonlyoffsetwherethereisalegally
enforceable right of offset and there is an intention to settle the balances net.
ASSETS
2016
$‘000
ASSETS
2015
$‘000
LIABILITIES
2016
$‘000
LIABILITIES
2015
$‘000
NET
2016
$‘000
NET
2015
$‘000
Property, plant and equipment and
intangible assets (3,145) (2) - 12,568 (3,145) 12,566
Tax credit and loss carry forward (12,021) (26,120) - - (12,021) (26,120)
Share based payments (387) (562) - - (387) (562)
Other deductible temporary differences (3,723) (4,953) 386 - (3,337) (4,953)
Deferred tax (assets)/liabilities (19,277) (31,637) 386 12,568 (18,890) (19,069)
Offset tax 68 12,509 (68) (12,509) - -
Net deferred tax (assets)/liabilities (19,208) (19,128) 318 59 (18,890) (19,069)
56 (ii) Unrecognized Deferred Tax Assets
There is an unrecognized deferred tax asset arising from unrecognized temporary differences of $18.2m (2015: $7.3m) which has
not been recognized due to insufficient certainty that taxable profits will be available against which this asset could be used.
(iii) Movement in Temporary Differences
BALANCE AT
31 MARCH2015
$‘000
RECOGNIZED
ININCOME
$‘000
RECOGNIZED
INGOODWILL
$‘000
RECOGNIZED
INEQUITY
$‘000
BALANCE AT
31 MARCH2016
$‘000
Property, plant and equipment and
intangible assets 12,566 (15,711) - - (3,145)
Tax credit and losses carry forward (26,120) 14,099 - - (12,021)
Share based payments (562) 206 - (31) (387)
Other deductible temporary differences (4,953) 1,616 - - (3,337)
TOTAL (19,069) 210 - (31) (18,890)
The amount of credit that can be recognized in the income statement is limited under IAS 12 and any remaining credit is taken to
equity.
19 OTHERPAYABLESANDPROVISIONFORLIABILITIES
TRADE AND OTHER PAYABLES
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
CURRENT LIABILITIES
Trade payables 18,722 25,977
Customer deposits 709 1,214
Onerous lease provision 700 577
Other accrued liabilities (including the amount of finance leases due within 12 months) 10,463 22,648
30,594 50,416
NON CURRENT LIABILITIES
Onerous lease provision 5172
Non current liabilities 1,679 1,189
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit
period taken for trade purchases is 68 days (2015: 82 days). No interest has been charged by suppliers in respect of overdue
amounts in the year.
Non current liabilities include deferred rent of $0.5m (2015: $0.6m) and obligations under financing leases of $1.2m (2015:
$0.6m).
The Directors consider that the carrying amount of trade payables approximates to their fair value.
PROVISIONS FOR LIABILITIES AND CHARGES
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Balance at beginning of the Period 749 512
Additional provision in the year 193 237
Utilization of provision (237) -
Balance at end of the Period 705 749
The onerous lease provision comprises obligations for future rentspayableonpropertiesthatarevacantoronlypartiallyutilized.
These provisions are expected to be utilized by 31 March 2019.
57 Obligations under finance lease:
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
AMOUNTS PAYABLE UNDER FINANCE LEASES
Within one year 910 1,005
In second to fifth years inclusive 1,172 639
2,082 1,644
Less: Amounts due for settlement within 12 months (shown under current liabilities) (910) (1,005)
Amounts due for settlement after 12 months 1,172 639
For the year ended 31 March 2016, the average effective borrowing rate was 8.7% (2015: 11.6%).
Lease obligations are denominated in dollars. There is no material difference between the minimumleasepaymentandtheir
present values.
The following table details the Group’sremainingcontractualmaturityforitsnon-derivative financial liabilities with agreed
repayment period
LESSTHAN
3 MONTHS
$‘000
3–12
MONTHS
$‘000
1–5
YEARS
$‘000
TOTAL
$‘000
Finance lease liability 335 575 1,172 2,082
The Group’s obligations under finance leases are typically secured on the assets to which the lease relates.
20 SHARECAPITAL
ASAT
31 MARCH2016
$‘000
ASAT
31 MARCH2015
$‘000
ISSUED AND FULLY PAID
404,462,870 ordinary shares of 1 pence each 7,537 7,502
(2015: 402,326,511 ordinary shares of 1 pence each)
The Company has one class of ordinary share which carry no right to fixed income.
During the current year 2,136,359 shares were issued, of which 512,877 shares related to the acquisition of Rhythm NewMedia
Inc., 255,980 shares related to exercise of employee share options and 1,367,502 shares related to restricted stock units (2015:
2,418,132 shares were issued, of which 511,197 shares related to the acquisition of Rhythm NewMedia Inc., 541,408 shares
related to exercise of employee share options, 1,258,973 shares related to restricted stock units and 106,554 related to
consideration for the acquisition of Burst Media Corporation).
21 SHAREPREMIUMACCOUNT
SHARE
PREMIUM
$‘000
Balance at 31 March 2014 167,945
Premium arising on issue of equity shares, net of costs 63
Balance at 31 March 2015 168,008
Premium arising on issue of equity shares, net of costs 37
Balance at 31 March 2016 168,045
22 SHARESTOBEISSUEDANDMERGERRESERVE
The shares to be issued reserve relates to shares that are expected to be issued to former Burst shareholders as part of the
consideration who have not yet submitted the paperwork to effect the exchange of Burst shares for blinkx shares.
The merger reserve arises in business combinations where shares are issued as whole or part consideration. The difference
between the fair value and the nominal value of the shares transferred as consideration is takentothemergerreserve.
58 23 OPERATINGLEASEARRANGEMENTS
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Lease payments under operating leases recognized as an expense in the year 3,461 3,463
At the balance sheet date, the Group had outstanding commitmentsforfutureminimumlease payments under non-cancelable
operating leases which fall due as follows:
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Within one year 2,386 2,933
In the second to fifth years inclusive 5,236 7,545
More than five years 182 182
7,804 10,660
Operating lease payments represent rentals payable by the Group for certain of its office properties, computer equipment and
software. Lease terms range from two to ten years.
24 SHARE-BASEDPAYMENTSANDEQUITYSETTLEDSHAREOPTIONSCHEMES
On the demerger from Autonomy Corporation plc the Company established the following share options schemes:
! The blinkx 2007 Enterprise Management Incentive Plan (the ‘blinkx EMI Scheme’)
! The blinkx US Share Option Plan (the ‘blinkx US Plan’)
! The blinkx Autonomy Employee Discretionary Share Option Scheme 2007 (the ‘Autonomy Discretionary Scheme’)
! The blinkx Autonomy Employee US Share Option Plan (the ‘Autonomy US Plan’)
The blinkx EMI Scheme and the blinkx US Plan allow for the grant of options over ordinary shares to employees of the Company
and its subsidiaries. At the time of demerger two special grants were made under these plans. The first allowed a fully vested grant
at nominal value and the second was a grant at nominal value but withathree-yearvestingperiod.Sincethengrantshavebeen
made at market value and with a three- or four-year vesting period with options vesting in varying sized tranches over that period.
No option may be granted for a term in excess of 10 years. Vested options are exercisable following termination of employment for
aperiodrangingfrom40to90days.VestingcriteriaarebasedoncontinuedemploymentwiththeCompany.
On 16 September 2013, the Board of Directors approved the amendment of blinkx Plc US Share Option Plan to allow the grant of
Restricted Stock Units to be made under its terms.
On 3 July 2015 the Board of Directors approved the Executive Plan for Market Value Share Options (MVSOs) that vest quarterly
with an additional performance component. The equity awards require a minimum stock price threshold for options to vest and
have a further accelerated vesting schedule when the stock price reaches a certain predetermined threshold above the stock price
at grant.
The Autonomy Discretionary Scheme and the Autonomy US Plan allowed a one-time grant of blinkx options to certain Autonomy
employees who at the time of the demerger had vested Autonomy options. Options granted under this plan were granted at
market price and vest over a period of three years.
Share-based compensation charges have been charged in the income statement within the following functional areas:
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Sales and marketing 1,041 2,004
Research and development 588 852
Administrative expenses 2,786 1,997
4,415 4,853
59 The following table summarizes options outstanding at 31 March 2016 relating to the blinkx EMI scheme and the blinkx US plan. All
option exercise prices are quoted in sterling.
NUMBER
2016
WEIGHTED
AVERAGE
£ NUMBER
2015
WEIGHTED
AVERAGE
£
Outstanding balance at beginning of year 23,690,152 0.50 14,102,777 0.69
Granted during the year 12,747,500 0.27 11,642,000 0.30
Exercised during the year (255,980) 0.10 (516,952) 0.05
Forfeited during the year (6,912,011) 0.59 (1,537,673) 0.92
Outstanding balance at end of year 29,269,661 0.38 23,690,152 0.50
Exercisable at end of year 11,669,968 0.52 9,882,822 0.59
The weighted average share price at the date of exercise for share options exercised during the period was £0.27 (FY2015:£0.08).
The options outstanding at 31 March 2016 had a weighted average exercise price of £0.38 (2015: £0.50). The weighted average
remaining contractual life of the options was 8 years (FY2015: 8 years).
The inputs to the Black-Scholes and Monte Carlo models were as follows:
2016 2015
Weighted average share price 0.27 0.30
Weighted average exercise price 0.27 0.30
Expected volatility 51-85% 46-58%
Expected life 6, 10 years 6 years
Risk free rate 2.17-2.37% 2.00-2.75%
Expected dividend --
Expected volatility was determined by calculating the historical volatility of the Group’s share price for the last 90 days prior to
grant. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-
transferability, exercise restrictions, and behavioral considerations.
Options were granted on 3 July 2015, 9 July 2015, 25 August 2015, 15 December 2015 and 5 February 2016. The weighted
average of the fair value of the options granted in the year was £0.27 per share, (2015: £0.30 per share).
The following table summarizes options outstanding as at 31 March 2016 in relation to the Autonomy Discretionary Share Scheme
and Autonomy US Plan options.
NUMBER
2016
WEIGHTED
AVERAGE
£ NUMBER
2015
WEIGHTED
AVERAGE
£
Outstanding balance at beginning of year 543,938 0.45 604,286 0.45
Lapsed during the year (62,799) 0.45 (60,348) 0.45
Outstanding balance at end of year 481,139 0.45 543,938 0.45
Exercisable at end of year 481,139 0.45 543,938 0.45
No options were exercised during the year from the Autonomy plan. (2015: the weighted average share price at the date of
exercise for share options exercised during the period was £0.45). The options outstanding at 31 March 2016 had a weighted
average exercise price of £0.45 (2015: £0.45). The weighted average remaining contractual life of the options was 1 year (2015: 2
years).
No options were granted during the current or prior year.
The following table summarizes Restricted Stock Units (RSUs) outstanding as at 31 March 2016.
NUMBER OF
RSUs
NUMBER
NUMBER OF
RSUs
NUMBER
Outstanding balance at beginning of year 2,933,184 2,231,667
RSUs granted -2,257,712
RSUs vested (1,367,502) (1,258,973)
RSUs forfeited (240,274) (297,222)
Exercisable at end of year 1,325,408 2,933,184
60 No RSUs were granted in the current year. The weighted average of the fair value of the RSUs granted in the year was nil
(2015: £0.29).
The majority of RSUs that vested in fiscal year 2016 were net-share settled such that the Company withheld shares with value
equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted
the cash to the appropriate taxing authorities. The weighted average vesting share price during the period was £0.24 (2015:
£0.37).
25 FINANCIALINSTRUMENTS
CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities in the Group will be able to continue operating as a going concern while
maximizing shareholder returns. The capital structure of the Group consists of cash and cash equivalents, marketable securities,
and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. The Group’s
overall strategy remains unchanged from the prior year. The Group finances its operations through a combination of retained
profits and interest received on bank accounts. Management maintains its capital structure and makes adjustments as necessary in
light of changes in the economic environment and strategic objectives of the Group, ensuring that there are sufficient liquid
resources available to take advantage of opportunities as they arise.
The Group’s capital risk management policies are unchanged from prior year. The Group is not subject to externally imposed
capital requirements.
Categories of financial instrument:
NOTE
2016
$‘000
2015
$‘000
FINANCIAL ASSETS
Cash and cash equivalents 18,222 95,734
Marketable securities 60,264 -
Loans and receivables 16 22,825 37,741
Restricted cash and other receivables 828 1,071
FINANCIAL LIABILITIES
Amortized cost (28,787) (47,003)
FINANCIAL RISK MANAGEMENT
Management is responsible for monitoring and managing the financial risks relating to the operations of the Group, which include
credit risk, market risk arising from interest rate risk and currency risk, and liquidity risk. The Board of Directors and the Audit
Committee review and approve the internal policies for managing each of these risks as summarized below. The Group is not
subject to any externally imposed capital requirements.
The Group’s financial function provides services to the business, monitors and manages the financial risks relating to the
operations of the Group. These risks (together withtherelatedriskmanagementpolicy)include:
CREDIT RISK
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting infinanciallosstotheGroup.
The Group’s credit risk is primarily with cash and cash equivalents and amounts owing from customers. The Group’s principal
financial assets are cash and cash equivalents, trade and other receivables.
The Group’s customer base is highly diversified. One customer represents 12.56% of revenue in the year. This is not considered
indicative of a high credit risk. (2015: one customer represented 10.02% of revenue). The Group does not have any significant
credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Group defines
counterparties as having similar characteristics if they are related entities.
Concentration of credit risk did not exceed 13% of gross monetary assets at any time during the year. Before accepting any new
customer, the Group uses an external credit rating system to assess the potential customer’s credit quality. All customers have
credit limits set by credit managers and are subject to standard terms of payment. The Group has adopted a policy of only dealing
with counterparties that are considered to be creditworthy by management, having completed various credit checks.
The risk of default from a financial institution is considered limited because counterparties are a number of different banks with
high credit ratings assigned by international credit-rating agencies, which range from A to AA.
The carrying amount of financial assets recorded in thefinancialstatements,whichisnetofimpairmentlosses,representsthe
Group’s maximum exposure to credit risk.
MARKET RISK (INCLUDING INTEREST RATE RISK AND CURRENCY RISK)
Interest rate risk
The Group has no loans and borrowings outside finance leases and as such, the Directors are satisfied that interest rate risk is
negligible.
61 Currency risk
The Group does not enter into or trade financial instruments, including derivative financial instruments, for anypurpose.TheGroup
maintains the majority of its cash in US Dollars as a natural hedge, in line with our revenue and costs which are predominantly US-
based.
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates as it undertakes
certain transactions denominated in foreign currencies. The Group’s presentational currency is US dollars and the Company’s
functional currency is Sterling. The Group operates subsidiaries in the US, UK and Canada and as a result cash is held
predominantly in sterling and US Dollars. The Group holdsitsfundsinseveraldifferent financial institutions.
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date
are as follows:
2016
LIABILITIES
$‘000
2015
LIABILITIES
$‘000
2016
ASSETS
$‘000
2015
ASSETS
$‘000
Sterling 634 1,567 222 3,092
Liquidity risk
The Group seeks to manage financial risk to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash
safely and profitably by maintaining adequate reserves and cash on hand by continuously monitoring forecast and actual cash
flows and by matching the maturity profiles of financial assets and liabilities. The Group reviewsitscashflowrequirementsona
monthly basis, to ensure that it maintains adequate cash reserves, diversifying its cash accounts across several banking
institutions and constantly monitoring forecast and actual cash flows.
The following table details the Group’s sensitivity to a 20% increase and decrease in the functional currency of the entity against
the relevant foreign currencies. 20% is the sensitivity rate used (2015: 20%) when reporting foreign currency risk internally to key
management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates.
The sensitivity includes outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for
a20%change(2015:20%)inforeigncurrencyrates.ThesensitivityanalysisincludesloanstoforeignoperationswithintheGroup
where the denomination of the loan is in a currency other than the currency the lender or the borrower. A positive number
indicates an increase in profit and other equity where the sterling strengthens 20% against the relevant currency. For a 20%
weakening of the sterling against the relevantcurrencytherewouldbeanequalandoppositeimpactontheprofitandotherequity
and the balances below would be negative.
2016
$‘000
2015
$‘000
Cash and cash equivalents 44 484
Amounts due from customers -134
Trade payables 127 313
No sensitivity has been performed on a change in interest rates, as the impact of interest rate risk is so low.
The fair value of all of the Group’s financial instruments is derived from inputs other than unadjusted quoted prices that are
observable for the asset or liability, either directly or indirectly. The carryingamountoffinancialassetsandfinancialliabilities
recorded at amortized cost in the financial statements approximate their fair values. Therefore there is no difference between the
carrying value and fair value of the above financial assets and liabilities.
FAIR VALUE OF ASSETS AND LIABILITIES
The Group has assets and liabilities that have been fair valued, on a non-recurring basis, which have arisen through the
acquisitions in the previous years.
These assets have been fair valued by an external valuation specialist. The assets and liabilities are all at level 3 in the fair value
hierarchy set out in IFRS 13. Level 3 is fair value measurements that are derived from valuation techniques that include inputs for
the asset or liability not based on observable market data (unobservable inputs).
The only asset carried as fair value is marketable securities. These relate to level 2 assets, which have been valued by an external
specialist or non-listed certificates of deposits.
62 26 ACQUISITIONANDEXCEPTIONALCOSTS
In line with the way the Board and chief operating decision-maker reviews the business, large one-off acquisition and exceptional
costs and other costs related to acquisitions are separately identified and adjusted results shown. The types of costs included
within acquisition costs are those which are directly attributable to an acquisition, such as legal and accounting expenses,
integration costs, severance and retention remuneration. The types of costs which are considered exceptional include severance
costs, impairment losses and other significant assets writedowns.
YEARENDED
31 MARCH2016
$‘000
YEARENDED
31 MARCH2015
$‘000
Acquisition costs:
Severance and retention costs 825 2,255
Professional fees 309 838
Total acquisition costs 1,134 3,093
Exceptional costs:
Goodwill impairment 50,322 -
Change in intangible assets lives 12,027 -
Restructuring charges 595 643
Severance costs 1,217 926
Total exceptional costs 64,161 1,569
TOTAL ACQUISITION AND EXCEPTIONAL 65,295 4,662
27 RELATEDPARTYTRANSACTIONS
Balances and transactions between the Company and itssubsidiaries,whicharerelatedparties,havebeeneliminatedon
consolidation and are not disclosed in this note.
The remuneration of the Directors, who are the Group’s keymanagementpersonnel,inaccordancewith IAS 24 Related Party
Disclosures, is disclosed in the Directors’ Remuneration Report on page 27.
There were no other related party transactions ineitherthecurrentorprioryear.
28 EVENTSAFTERTHEBALANCESHEETDATE(GROUPANDCOMPANY)
There are no post balance sheet events to report.
63 COMPANYBALANCESHEET
AS AT31MARCH2016
NOTE
ASAT
31 MARCH
2016
£‘000
ASAT
31 MARCH
2015
£‘000
NON-CURRENT ASSETS
Investment in subsidiaries 30 110,443 209,381
CURRENT ASSETS
Amounts due from subsidiary undertakings 31 4,435 19,135
Other receivables 30 9
Cash and cash equivalents 31 505 22,708
Total assets 4,970 41,852
CURRENT LIABILITIES
Trade and other payables 31 (197) (188)
Amounts due to subsidiary undertakings 31 (233) (7,114)
Total liabilities (430) (7,302)
NET ASSETS 114,983 243,931
CAPITAL AND RESERVES
Share capital 34 4,045 4,023
Share premium account 35 98,119 98,096
Stock compensation reserve 11,013 8,129
Shares to be issued reserve 15 1,033
Merger reserve 9,984 138,031
Retained loss 36 (8,193) (5,381)
TOTAL EQUITY 114,983 243,931
Note 29 to note 38 form an integral part of this balance sheet.
The financial statements of blinkx plc (registered number 06223359) were approved by the Board of Directors and authorized for
issue on 17 May 2016. They were signed on its behalf by:
Subhransu (“Brian”) Mukherjee
Chief Executive Officer
blinkx plc
17 May 2016
64 COMPANYSTATEMENTOFCHANGESINEQUITY
FORTHEYEARENDED31MARCH2016
ORDINARY
SHARE
CAPITAL
£‘000
SHARE
PREMIUM
ACCOUNT
£‘000
SHARES
TOBE
ISSUED
RESERVE
£‘000
STOCK
COMPENSATION
RESERVE
£‘000
MERGER
RESERVE
£‘000
RETAINED
LOSS
£‘000
TOTAL
£‘000
BALANCE AS AT
1APRIL2015 3,999 98,059 2,192 5,134 136,881 (7,536) 238,729
Net income for the year - - - - - 2,155 2,155
Other comprehensive income - - - - - - -
Total comprehensive income for
the year - - - - - 2,155 2,155
Issue of shares, net of costs 24 37 (1,159) - 1,150 - 52
Capital contribution - - - 2,995 - - 2,995
BALANCE AS AT
31 MARCH 2015 4,023 98,096 1,033 8,129 138,031 (5,381) 243,931
Net loss for the year - - - - - (131,942) (131,942)
Other comprehensive income - - - - - - -
Total comprehensive net loss for
the year - - - - - (131,942) (131,942)
Reclassification of the
impairment loss from retained
loss to merger reserve - - - - (129,060) 129,060 -
Issue of shares, net of costs 22 23 (1,018) - 1,013 - 40
Tax movement on share options - - - - - 70 70
Capital contribution - - - 2,884 - - 2,884
BALANCE AS AT
31 MARCH 2016 4,045 98,119 15 11,013 9,984 (8,193) 114,983
65 COMPANYCASHFLOWSTATEMENT
FORTHEYEARENDED31MARCH2016
NOTE
ASAT
31 MARCH2016
£‘000
ASAT
31 MARCH2015
£‘000
NET CASH USED IN OPERATING ACTIVITIES 38 (5,037) (21,112)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in subsidiary (15,948) -
Interest received 13 -
NET CASH GENERATED BY INVESTING ACTIVITIES (15,935) -
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of shares 40 52
NET CASH GENERATED BY FINANCING ACTIVITIES 40 52
Net decrease in cash and cash equivalents (20,932) (21,060)
Beginning cash and cash equivalents 22,708 39,711
Effect of foreign exchange on cash and cash equivalents (1,271) 4,057
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 505 22,708
66 29 SIGNIFICANTACCOUNTINGPOLICIES
The separate financial statements of the Company are presented in accordance with the Companies Act 2006. As permitted by that
Act, the separate financial statements have been prepared in accordance with International Financial Reporting Standards adopted
by the European Union. The Company has one Executive Director and five Non-Executive Directors. Their remuneration is shown in
the Directors’ Remuneration Report on page 27.
The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are the same as
those set out in note 3 to the consolidated financial statements except as noted below.
Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.
These Company financial statements are presented in sterling as that is the currency of the primary economic environment in
which the Company operates.
As permitted by section 408 of the Companies Act 2006, the income statement of the parent Company is not presented as part of
these financial statements. The parent Company’s loss for the financial year amounted to £131,942,000 (2015: profit of
£2,155,000). The Company’s loss/profit for each year is the same as its total comprehensive income and hence no separate
statement has been presented.
30 INVESTMENTSINSUBSIDIARIES
£‘000
COST AND NET BOOK VALUE
At 31 March 2014 206,386
Investment in subsidiaries 2,995
At 31 March 2015 209,381
Capital contribution due to share-based payments 2,884
Investment in subsidiaries 27,238
Impairment of investment in subsidiary (129,060)
At 31 March 2016 110,443
Investments in subsidiary companies are subject to review for impairment. Following the review, the Company impaired the
carrying value of investments in subsidiaries by £129,060,000 (2015: nil).
The capital contribution is in respect of equity settled share-based payments made to employees of the Company’s subsidiaries for
which the Company receives no reimbursement. Refer to note 37 for further details on the Groups Share Option Schemes.
All subsidiary companies within the Group’s operation at 31 March 2016 are as follows:
NAME OFCOMPANY NATURE OFBUSINESS
PROPORTIONOFALLOTTED
SHARECAPITALHELD
(DIRECTLYORINDIRECTLY)
COUNTRYOF
REGISTRATION
RhythmOne (US) Holdings, Inc. Holding company 100% United States
Blinkx (UK2), Ltd Holding company 100% United Kingdom
Blinkx UK Ltd Trading company 100% United Kingdom
RhythmOne, LLC Trading company 100% United States
Pinball (Canada), Inc. Holding company 100% Canada
Blinkx (Canada), Inc. Trading company 100% Canada
Prime Visibility Media Group, LLC Trading company 100% United States
Prime Visibility, LLC Trading company 100% United States
Verti Technology Group, Inc Trading company 100% United States
Pinball Corporation Holding company 100% United States
AdKarma, LLC Trading company 100% United States
Blinkx (UK) Holding Ltd Holding Company 100% United Kingdom
AdOn Network LLC Trading Company 100% United States
Operating subsidiaries of the above companies have been excludedtotheextentsuchsubsidiaries’operationsareconsolidatedin
the operating companies’ operations and results. These include operating subsidiaries in the UK, US and Canada.
31 FINANCIALINSTRUMENTS
FINANCIAL ASSETS
AMOUNTS DUE FROM SUBSIDIARY UNDERTAKINGS
At the balance sheet date there are receivables from fellow Group companies amounting to £4,435,000 (2015: £19,135,000). The
carrying amount of these assets approximates their fair value. There are no past due or impaired receivable balances (2015:
none). Amounts due from subsidiary undertakings are unsecured, interest free, have no fixed date of repayment and are repayable
on demand.
67 CASH AND CASH EQUIVALENTS
These comprise cash held by the Company and short-term bank deposits with an original maturity of three months or less.
The carrying amount of these assets approximates their fair value.
FINANCIAL LIABILITIES
AMOUNTS DUE TO SUBSIDIARY UNDERTAKINGS
At the balance sheet date there are payables to fellow Group companies amounting to £233,000 (2015: £7,114,000). The carrying
amount of these liabilities approximates to their fair value. Amounts due to subsidiary undertakings are unsecured, interest free,
have no fixed date of repayment and are repayable on demand.
TRADE AND OTHER PAYABLES
Trade payables principally comprise amounts outstanding for trade purchasesandongoingcosts.Theaveragecreditperiodtaken
for trade purchases is 54 days (2015: 18 days).
The carrying amount of trade payables approximates to their fair value.
The financial risk and risk management policies are the same as those of the Group, which are discussed in note 25.
FOREIGN CURRENCY RISK MANAGEMENT
The Company is mainly exposed to movements in US dollar. The table below shows the carrying amounts of the Company’s foreign
currency monetary assets and monetary liabilities at the reporting date:
2016
LIABILITIES
£‘000
2015
LIABILITIES
£‘000
2016
ASSETS
£‘000
2015
ASSETS
£‘000
US Dollar 181 5,671 536 41,275
FOREIGN CURRENCY SENSITIVITY ANALYSIS
The Company has maintained its sensitivity at 20% in 2016 (2015: 20%).
The following table details the Company’s sensitivity to a 20% increase and decrease (2015: 20%) in the functional currency of the
entity against the relevant foreign currencies. 20% is the sensitivity rate used when reporting foreign currency risk internally to
key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange
rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation
at the year end for a 20% change in foreign currency rates. The sensitivity analysis includes loans to foreign operations where the
denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number below for 2016
indicates an increase in profit and other equity where the Sterling strengthens 20% against the relevant currency. For a 20%
weakening of the Sterling against the relevant currency, there would be an equal and opposite impact on the profit and other
equity, and the balances below would be negative.
2016
£‘000
2015
£‘000
Cash and cash equivalents 80 4,428
Amounts due from subsidiary undertakings 887 3,826
Amounts due to subsidiary undertakings 47 1,134
Categories of financial instrument:
YEARENDED
31 MARCH2016
£‘000
YEARENDED
31 MARCH2015
£‘000
FINANCIAL ASSETS
Cash and cash equivalents 505 22,708
Other receivables 30 9
Amounts due from subsidiary undertakings 4,435 19,135
4,970 41,852
FINANCIAL LIABILITIES
Trade payables 197 188
Amounts due to subsidiary undertakings 233 7,114
430 7,302
The fair value of all of the Group’s financial instruments is derived from inputs other than unadjusted quoted prices that are
observable for the asset or liability, either directly or indirectly. The carryingamountoffinancialassetsandfinancialliabilities
recorded at amortized cost in the financial statements approximate their fair values. Therefore there is no difference between the
carrying value and fair value of the above financial assets and liabilities.
68 32 DEFERREDTAX
No deferred tax assets or liabilities have been recognized by the Companyintheyear.Atthebalancesheetdatethereisan
unrecognized deferred tax asset of £0.8m (2015: £0.9m ).
33 RELATEDPARTYTRANSACTIONS
The amount owed by subsidiary undertakings is £4,435,000 (2015: £19,135,000). The amount owed to subsidiary undertaking is
£233,000 (2015: £7,114,000). Amounts are repayable on demand. No interest is payable and the amounts are unsecured.
The remuneration of the Directors, who are the Group’s keymanagementpersonnel,inaccordancewith IAS 24 Related Party
Disclosures, is disclosed in the Directors Remuneration Report on page 27.
34 SHARECAPITAL
YEARENDED
31 MARCH2016
£‘000
YEARENDED
31 MARCH2015
£‘000
ISSUED AND FULLY PAID
404,462,870 ordinary shares of 1 pence each 4,045 4,023
(2015: 402,326,511 ordinary shares of 1 pence each)
The Company has one class of ordinary share which carries no right to fixed income.
During the current year 2,136,359 shares were issued, of which 512,877 shares related to the acquisition of Rhythm NewMedia
Inc., 255,980 shares were issued related to exercise of employee share options and 1,367,502 shares were issued related to
restricted stock units (2015: 2,418,132 shares were issued, of which 511,197 shares related to the acquisition of Rhythm
NewMedia Inc., 541,408 shares were issued related to exercise of employee share options, 1,258,973 shares were issued related
to restricted stock units and 106,554 related to consideration for the acquisition of Burst Media Corporation).
35 SHAREPREMIUM
SHARE
PREMIUM
£‘000
Balance at 31 March 2014 98,059
Premium arising on issue of equity shares, net of costs 37
Balance at 31 March 2015 98,096
Premium arising on issue of equity shares, net of costs 23
Balance at 31 March 2016 98,119
36 RETAINEDEARNINGS
£‘000
Balance at 31 March 2014 (7,536)
Net profit for the year 2,155
Balance at 31 March 2015 (5,381)
Net loss for the year (131,942)
Tax movement on share options 70
Balance at 31 March 2016 (137,253)
37 SHARE-BASEDPAYMENTS
See note 24, Share-based Payments Equity Settled Share Option Schemes.
69 38 NOTESTOTHECASHFLOWSTATEMENT
ASAT
31 MARCH2016
£‘000
ASAT
31 MARCH2015
£‘000
Cash Flow From Operating Activities
(Loss)/Profit from operations (131,942) 2,155
Impairment in subsidiary 129,060 -
Foreign exchange loss/(gain) 1,271 (4,057)
Operating cash flows before movements in working capital (1,611) (1,902)
Decrease/(increase) in amounts due from group undertakings 14,703 (17,379)
Decrease in amounts due to subsidiary undertakings (18,171) (1,908)
Decrease in receivables 33 -
Increase in payables 977
Cash generated by/(used in) operations (5,037) (21,112)
70 SHAREHOLDERINFORMATIONANDADVISORS
REGISTRARSANDBLINKXSHAREHOLDERSERVICES
All administrative inquiries regarding shareholdings such as questions about lost share certificates should be directed to the
Company’s registrars as follows:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZY
United Kingdom
Tel: +44 870 707 1593
email: web.queries@computershare.co.uk
STOCKEXCHANGES
blinkx’s ordinary shares are listed on the London Stock Exchange (AIM) under the symbol “BLNX.” blinkx does not maintain listings
on any other stock exchanges.
SHAREHOLDERCOMMUNICATIONS
Topics featured in this Annual Report can be found via the blinkx home page on the Internet (http://www.blnx.com). Financial
results, news on blinkx products, services and otheractivitiescanalsobefoundviathataddress.
ADVISORS/AUDITOR
AIMNOMINATED
ADVISORAND BROKER CO-BROKER INVESTORRELATIONS
PricewaterhouseCoopers LLP Citigroup Global Markets Numis Securities Limited FTI Consulting, Inc.
The Atrium Citigroup Centre The London Stock 200 Aldersgate
1HarefieldRoad CanadaSquare Exchange Building Aldersgate Street
Uxbridge, UB8 1EX Canary Wharf 10 Paternoster Square London, EC1A 4HD
United Kingdom London, E14 5LB London, EC4M 7LT United Kingdom
United Kingdom United Kingdom
CORPORATELEGAL ADVISORS REGISTEREDOFFICE
Bird & Bird LLP DLA Piper LLP 40 Dukes Place
15 Fetter Lane 2000 University Avenue London
London, EC4A 1JP East Palo Alto, CA 94303 EC3A 7NH
United Kingdom USA United Kingdom
Headquarters: 251 Kearny Street, 2nd Floor, San Francisco, CA 94108
Tel: +1 (415) 655-1450 // Fax: +1 (415) 665-1440
71 GLOSSARY
AdBlocking–Usingtechnologytoremoveoralteradvertisingcontentinawebpage.Advertisingcanexistinavarietyofformsincluding
static banners, rich media, video, text, or pop-up windows.
AdExchange–Anonlinemarketplaceforadvertisersandpublisherstobuyandsellinventory,oftenthroughreal-timeauctions.
AdNetwork–Acompanythathasdealswithadvertisersandpublishers to manually buy and sell ads across the Internet.
AdServer–Companywhosetechnologyrelaysanadbuytoawebsiteandreportsonhowitperformed.
AgencyTradingDesk–Adivisionwithinanadagencyfocusedonbuyingadsusingadtechnology.
AudienceExtension–Sometimescalled“look-alikemodeling,”aprocessthattakes a known audience segment and catalogs various
shared characteristics that can be used to target people who bear similarities.
AudienceVerification–Third-partyreportingtoprovidevalidationthatasite,andtheadsonit,reachalegitimate,verifiableaudience.
BehavioralTargeting–Showingadstopeoplebasedonthetypeofsitestheyvisit.
ClickThroughRate(CTR)–Measureofhowmanypeopleclickedonanadorapieceofdigitalcontent.Usedasaproxytodeterminethe
level of engagement of the ad or content by the consumer.
ConnectedTV–Televisionsetsandset-topboxeswithbuilt-inintegration of web features, such as streaming services and apps. Also
known as Smart TVs.
Cookie–Identifierattachedtoaperson’sInternet browser to track the site he or she visits.
CostPerClick(CPC)–Representsthecostanadvertiserpayseachtimeauserclicksontheirad.
CostPerDownload/Install(CPD/CPI)–Representsthecostanadvertiser/softwareproviderpayseachtimeaconsumerdownloadsor
installs their software.
CostPerMille/ThousandAdvertisingImpressions(CPM)–Representsthecostofanadvertisingplacementdividedbythenumberof
impressions generated (in thousands).
CostPerView(CPV)–Thepriceanadvertiserpaysforasingleviewoftheircontentorad,typicallymeasuredandpricedinincrementsof
one thousand views.
Data-ManagementPlatform(DMP)–Companythatprovidestechnologytostoreandcatalogmarketerdata.
Demand–Advertisers’needforadvertisinginventorytoplacetheiradsondigitalproperties.Typicallyrepresentedbyvolume,priceand
ad format for a specified timeframe. Demand is typically executed on behalfofadvertisersbytheiragencywhomayalsouseaseriesof
intermediaries, such as trading desks, demand side platforms and advertising exchanges to execute ad campaigns.
demandsideplatform(DSP)–Acompanythatprovidestechnologyformediabuyerstopurchaseadplacements,typicallyviabidsin
exchange’s real-time auctions.
First-PartyData–Datathatacompanyhascollecteddirectly,likearetailer’slistofloyaltymembers.
FraudulentAdvertising–Whenacompanyknowinglyservesadsthatnoonewill actually see as a way to drive “views” and revenue (Ad
Fraud).
Geo-targeting–Showingadstopeoplebasedontheirmobiledevice’slocation;ZIPcodeinformationtheysubmitwhenregisteringfora
site/service; or GPS coordinates collected by a site/service.
Hashing–Awayforseparatecompaniestomatchtheirdatasetswithouteithersidebeingabletoaccesstheother’sdata.
IdentifierforAdvertisers(IDFAorIFA)–Atemporarydeviceidentifierusedonmobiledevicesfortargetedadvertising,whichprovides
device identification without compromising personally identifiable information. Replaces Apple’s Unique Identifier (UDID) and Android ID
and used instead of cookies that are common on desktop devices.
Impression–Measureofthenumberoftimesanadisseen.
In-Stream–Anadthatappearswithinapieceofcontent.
MobileApps–Specializedcomputerprogramsdesignedtorunonsmartphones,tabletsandothermobiledevices.
MobileWeb–Accesstothewebfromahandheldmobiledevice,suchasasmartphoneortablet.
Pixel–Apieceofcodeplacedonwebsitessocompaniescanrecognize which cookies have already been dropped on a person’s browser
and put in new cookies.
ProgrammaticDirect–Anadbuydonedirectlybetweenapublisher and advertiser through automated ad-buying systems.
72 Real-TimeBidding(RTB)–Thepurchaseandsaleofadsthroughcomputer-run auctions thathappenwithinmilliseconds.
Retargeting–Showinganadtoapersonwhovisitedyoursitewhilethatpersonisvisitinganothersite.
Second-PartyData–Whenacompanymakesitsfirst-partydatadirectlyavailabletoanothercompany.
Supply–Advertisinginventoryofferedbypublishersor owners of digital properties. Typically supply is represented by volume, price and
ad format for a specified time period. Supply may be offered up directly by the owners of the inventory (owned and operated supply) or
through a series of intermediaries (such as ad networks, exchanges and Supply Side Platforms).
SupplySidePlatform(SSP)–Anad-techcompanythatworkswithpublisherstohelpthemselltheirinventoryatscale.
Third-PartyData–Informationthatacompanycollectsindirectly(suchasthroughcookies)oraggregatedfromothers(suchascredit
card companies and magazine publishers) and then sells to ad buyers to aid in targeting.
Traffic–TheresultoftheactofbrowsingtheInternetorother digital properties by consumers. Such browsing behavior generates
advertising inventory. Used as a proxy for the volume and level of user attention or engagement and typically priced and aggregated
into and sold as audiencestoagencieswhorepresentadvertisers.
Unique-User/DeviceID–Identifierassignedtoadeviceoruserthatlasts until the device in reset or the account is deleted.
Viewability–Measuringanadtomakesurethatitwasvisibletotheuser.Theindustryismovingtowardthisasanewstandardfor
impression.
VTR(View-ThroughRate)–Themeasurementofhowmanypeoplesawanadandeventuallyvisitedtheadvertiser’ssite.
73 [THISPAGEINTENTIONALLYLEFTBLANK]  H e a d q u a r t e r s : 
2 5 1 K e a r n y S t r e e t , 2 n d F l o o r 
S a n F r a n c i s c o , C A 9 4 1 0 8 
U S A 
Te l : + 1 4 1 5 6 5 5 1 4 5 0 
BLINKX
BLINKX ANNUAL REPORT AND ACCOUNTS YEAR ENDED 31 MARCH 2016