dma annual report...copyright:4 the direct marketing association (uk) ltd 2017 group ceo’ report...

DMA Annual report 2017

ANNUAL REPORT 2017

COPYRIGHT: THE DIRECT MARKETING ASSOCIATION (UK) LTD 20171

ContentsDirectors and officers 2Chair’s report 3Group CEO’ report 4Directors’ report 5Independent auditors’ report 7Consolidated statement of comprehensive income 9Consolidated balance sheet 10Company balance sheet 11Notes to the financial statements 12 - 30

ANNUAL REPORT 2017


Directors and officersDIRECTORSP SmithsonC Combemale J Porter S Bailey G Wheeler M De Souza C WorboysR Aldighieri J CaveM RunacusG Fidura

COMPANY SECRETARYJ Milligan

REGISTERED NUMBER02667995

REGISTERED OFFICEDMA House70 Margaret StreetLondon W1W 8SS

INDEPENDENT AUDITORSRSM UK Audit LLP25 Farringdon StreetLondonEC4A 4AB

ANNUAL REPORT 2017


Chair’s reportThe chairman presents his statement for the period:-

This is my first opportunity to comment on an annual report since being appointed Chair of the DMA Board and I’m delighted to say the organisation has continued to thrive since the merger of the DMA and IDM in 2015. This is also a chance to thank the entire DMA group team for consistently going above and beyond to achieve this.

I would also like to use this opening to thank my predecessor as Chair, Julia Porter, for guiding us to this point and particularly for the ground-breaking work she led to create the DMA Code, which continues to be the backbone of our philosophy as an organisation.

I was elected Chair in the wake of Brexit and with the deadline to be compliant with GDPR (‘The General Data Protection Regulation’) fast-approaching. Needless to say, both of these are major parts of our strategy for the organisation. As the UK’s leading data-driven marketing community, the DMA group is far from complacent. We understand there is still much work to be done over the coming year to ensure the continued security and success of our industry.

The UK’s decision to leave the European Union is set to create its own challenges to businesses both in the UK and abroad, but we are seeing this as an opportunity to extend the market-leading training the IDM offers beyond our own borders. This includes a new e-learning tool available to European markets and beyond, as well as expansion to the Asia region. IDM qualifications remain the gold standard in digital and direct marketing in the UK, but with our new platform and market capabilities we aim to make them the global standard.

GDPR is our number one priority as an organisation. Considerable resource from the DMA, IDM and Employability are focussed on ensuring we achieve a regulatory environment that is good for both UK business and its customers. We recognise that we must do this while continuing to deliver on our existing, business-as-usual responsibilities as an industry association that is striving to keep pace with our fast-moving and constantly innovating sector.

Personally, I do not agree with the negativity that is often attached to GDPR. Far from damaging, I see it as an opportunity to create a more authentic relationship with customers. One based on accountability, trust and transparency. I believe that those of us in the data-driven creative industries are best-placed to lead this charge, for a number of reasons.

First, good data-driven marketers have always been mindful of the responsibility they have to their customers, underpinned by the fair and transparent exchange of value when it comes to their data.

Second, good data-driven marketers understand how to learn from the insight they get from customers, we’re able to ‘fail fast’ and absorb these learnings to build campaigns that truly connect with consumers.

Third, good data-driven marketers are able to use the insight at their disposal to create brands with an authentic purpose, ensuring that every customer engagement and touchpoint reflects that purpose.

Our community has the opportunity to not just capitalise on the increasingly data-driven world we live in, but actually lead the way to a brighter future for brands that are willing to take that step towards authenticity.

Thank you for your continued participation and support.

Mark Runacus Chair of the DMADate: 27 October 2017

ANNUAL REPORT 2017


Group CEO’ reportThe CEO of the DMA Group presents his report for the year:

As the DMA group we have continued to put the business on a strong footing to lead the data-driven marketing industry to a successful future amid the challenges of Brexit, GDPR and a fast-changing technological landscape. We made significant investments during the year into the long term future while ensuring we continued to break even on an operating basis.

The year was marked by two key milestones. In May 2016, following six years of lobbying and uncertainty, a final text of GDPR was approved by the EU Parliament. Of critical importance, the text recognised legitimate interest as one of six equal bases of data processing and in recital 47 direct marketing was specifically recognised as a legitimate interest. Achieving this recognition of our industry’s importance to the modern data-driven economy was a monumental achievement of our advocacy team, who worked in collaboration with our European partners at Fedma to influence 21 national governments. In the UK, we collaborated closely with the Advertising Association and the team at DCMS (‘The Department for Digital, Culture, Media & Sport’), who represented the UK in the Council of Ministers. The DCMS team should be recognised for their outstanding support of our industry during the negotiations.

Barely one month later, the UK voted for Brexit. This led to a range of new concerns for our members and some wondered if the UK might become exempt from the obligations of GDPR. It became clear quite quickly that implementation of GDPR by May 2018 would take place prior to Brexit. The DMA group focussed quickly on ensuring that the UK would achieve adequacy for data transfers post-Brexit and ensuring free flow of data across Europe would continue to drive innovation.

The year also saw the complete integration of the IDM into the DMA group strategy. The team is now united under one roof at the newly refurbished DMA House in Central London. The extensive renovations include new conference and training facilities for IDM course attendees, as well as fully refurbished communal spaces available for DMA members, whether it’s to hold informal meetings or work remotely. This was a huge undertaking for the business and I’d like to thank the project team that worked tirelessly to ensure the project was delivered successfully.

The content agendas of the group are now fully aligned too. The DMA leadership on GDPR is matched by the development of GDPR courses at IDM. The Campaign for Great British Copywriting is matched by IDM

copywriting courses. DMA best practice guidelines are fully integrated into IDM Awards in Email, Social Media and across the range of qualifications. DMA Awards gold, silver and bronze winning campaigns are full incorporated into IDM qualifications as best in breed case histories.

The Employability team continues to offer students from all walks of life the access, skills and training they need to flourish within our sector. Amid Brexit, new data protection laws and an increasingly data-driven world, UK businesses of all sizes will continue to need the right young talent coming into their organisations if they are to succeed. Our range or programmes, including the DMA Breakthrough Award, Creative Data Academy, Student Marketing Competition, Summer school, Big Book Crit and a mentoring programme, continue to give young people the best marketing skills and connections to gain their first job in the industry.

The DMA launched the Customer Engagement campaign backed by foundation research into how today’s customers interact with brands. The Campaign for Great British Copywriting continues to showcase the power of great copy, with the launch of a new Writerscrawl festival to bring this community of writers together in a series of events around the UK. The DMA Awards have been another resounding success, with the quality of gold winners only going to prove just how rewardingly hard they are to win.

It has been a year of transformation for the DMA group and our industry as a whole, throughout which we have continued to position ourselves as leaders, advocates, educators and developers of talent for the data and marketing industry. This has been a credit to the entire team and I’d like to thank all the staff and members who serve on committees and councils for their continued hard work and belief in our vision for the future of our industry.

Chris CombemaleCEO of the DMA groupDate: 27 October 2017

ANNUAL REPORT 2017


Directors’ reportThe directors present their report and the financial statements for the year ended 31 March 2017.

Principal activitiesThe Direct Marketing Association (UK) Limited (DMA): the principal trade association for companies and organisations involved in the direct marketing industry in the United Kingdom.

Institute of Direct and Digital Marketing Training Limited (IDM): provision of direct, digital and data marketing training and education services.

IDM Membership (IDM): involved in the promotion of professional standards amongst direct, digital and data marketing professionals by the provision of membership services available only to those professionals who meet the criteria set down for qualification by education and experience to abide by the code of conduct for members.

The Telephone Preference Service (TPS): management of the register of telephone and fax numbers of individuals who do not wish to receive direct marketing telephone calls and faxes, under a contract with OFCOM. The contract was renewed for a further five years in January 2012.

Results and dividendsThe loss for the year, after taxation, amounted to £419,303 (2016 – profit £20,433).

DirectorsThe directors who served during the year were:

Peter Smithson Christopher Porte Combemale Julia Marguerite Porter Shaun Robert Bailey Richard James Dutton (resigned 31 December 2016) Michelle Mary De Souza Caroline Buchanon Worboys Melanie Ann Howard (resigned 31 December 2016) Jane Alexandra Cave Mark Gordon Runacus Gordon Nelson Fidura Gavin Leslie Wheeler (appointed 1 January 2017)Rachel Helen Aldighieri

ANNUAL REPORT 2017


Directors’ responsibilities statement The directors are responsible for preparing the Directors’ report and the consolidated 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 elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’. 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 for the group’s financial statements and then apply them consistently;

• make judgments and accounting estimates that are reasonable and prudent;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors’ report is approved has confirmed that:

• so far as the director is aware, there is no relevant audit information of which the Company and the Group’s auditors are unaware, and

• the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group’s auditors are aware of that information.

AuditorsUnder section 487(2) of the Companies Act 2006, RSM UK Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

This report was approved by the board on and signed on its behalf.

Mark Runacus DirectorDate: 27 October 2017

ANNUAL REPORT 2017


Independent auditors’ reportOpinion on financial statementsWe have audited the group and parent company financial statements (the “financial statements”) on pages 6 to 28. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”.

In our opinion the financial statements:

• give a true and fair view of the state of the group’s and parent company’s affairs as at 31 March 2017 and of the group’s loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Scope of the audit of the financial statementsA description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at http://www.frc.org.uk/auditscopeukprivate

Opinion on other matter prescribed by the Companies Act 2006In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements and, based on the work undertaken in the course of our audit, the Directors’ Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exceptionIn the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified any material misstatements in the Directors’ report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit. [or]

• the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies exemption from the requirement to prepare a strategic report or in preparing the directors’ report.

ANNUAL REPORT 2017


Respective responsibilities of directors and auditorAs more fully explained in the Directors’ Responsibilities Statement set out on pages 6 to 27, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

David Blacher Senior Statutory AuditorFor and behalf of RSM UK Audit LLP, Statutory AuditorChartered Accountants25 Farringdon StreetLondon EC4A 4AB

ANNUAL REPORT 2017


Consolidated statement of comprehensive incomefor the year ended 31 March 2017

Notes 2017£

2016£

Turnover 4 7,979,829 7,374,349

Cost of sales (1,533,524) (1,457,911)

GROSS PROFIT 6,446,305 5,916,438

Administrative expenses (6,974,934) (6,136,418)

Other operating income 5 84,857 216,077

OPERATING LOSS 6 (443,772) (3,903)

Interest receivable and similar income 10 15,883 17,739

(LOSS) / PROFIT BEFORE TAX (427,889) 13,836

Taxation 11 8,586 6,597

(LOSS) / PROFIT FOR THE YEAR (419,303) 20,433

RETAINED EARNINGS AT BEGINNING OF YEAR: 2,516,026 2,495,593

(Loss) / profit for the year attributable to owners of parent (419,303) 20,433

RETAINED EARNINGS AT END OF YEAR: 2,096,723 2,516,026

There were no recognised gains and losses for 2017 or 2016 other than those included in the consolidated statement of comprehensive income.

There was no other comprehensive income for 2017 (2016: £NIL).

The notes on pages 12 to 30 form part of these financial statements.

ANNUAL REPORT 2017


Consolidated balance sheet31 March 2017

Limited by guarantee Company Registration No. 02667995

Notes 2017£

2016£

FIXED ASSETS Intangible assets 13 711,815 473,147Tangible assets 14 819,056 457,805

1,530,871 930,952

CURRENT ASSETSStocks 16 9,300 12,951Debtors 17 2,285,207 2,482,608Cash at bank and in hand 18 2,653,652 3,241,530

4,948,159 5,737,089

Creditors: Amounts falling due within one year 19 (4,312,037) (4,073,159)

NET CURRENT ASSETS 636,122 1,663,930

TOTAL ASSETS LESS CURRENT LIABILITIES 2,166,993 2,594,882

Provisions 20 (70,270) (78,856)

NET ASSETS 2,096,723 2,516,026

CAPITAL AND RESERVESProfit and loss account 21 2,096,723 2,516,026

2,096,723 2,516,026

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies’ regime and in accordance with the provisions of FRS 102.

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

...........................................Mark Runacus DirectorDate: 27 October 2017 The notes on pages 12 to 30 form part of these financial statements.

ANNUAL REPORT 2017


Company balance sheet31 March 2017

Limited by guarantee Company Registration No. 02667995

Notes 2017£

2016£

FIXED ASSETS Intangible assets 13 130,631 --Tangible assets 14 804,993 368,469Investments 15 1,000 1,000

936,624 369,469

CURRENT ASSETSDebtors 17 1,738,263 1,943,694Cash at bank and in hand 18 1,340,022 1,729,077

3,078,285 3,672,771

Creditors: Amounts falling due within one year 19 (2,215,271) (1,840,958)

NET CURRENT ASSETS 863,014 1,831,813

TOTAL ASSETS LESS CURRENT LIABILITIES 1,799,638 2,201,282

NET ASSETS 1,799,638 2,201,282

CAPITAL AND RESERVESProfit and loss account 21 1,799,638 2,201,282

1,799,638 2,201,282

The Company’s loss for the year for the year was £401,642 (2016: £112,032).

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies’ regime and in accordance with the provisions of FRS 102.

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

...........................................Mark Runacus DirectorDate: 27 October 2017

ANNUAL REPORT 2017


Notes to the financial statementsfor the year ended 31 March 2015

1. General information The Direct Marketing Association (UK) Limited is a company incorporated in England & Wales under the companies act. The address of its registered office is 70 Margaret Street, London, W1W 8SS. The nature of the company’s operations and its principal activities are set out in the director’s report. The financial statements have been prepared in accordance with FRS 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland. The company is a Public Benefit Entity.

2. Accounting policies

2.1 Basis of preparation of financial statements These financial statements have been prepared in accordance with FRS 102 ““The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”), the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime, and under the historical cost convention, modified to certain financial instruments at fair value. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.’ Functional and presentation currency The Company’s functional and presentational currency is Sterling (£). 2.2 Basis of consolidation The consolidated financial statements present the results of the Group and its own subsidiaries (“the Group”) as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

The cost of a business combination is the fair value at the acquisition date, of the assets given, equity instruments issued and liabilities incurred or assumed, plus directly attributable costs. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. Non-consolidation of dormant subsidiaries The following dormant subsidiary companies of The Direct Marketing Association (UK) Limited and The Institute of Direct and Digital Marketing Training Limited have not been included in the consolidated accounts as the companies were deemed immaterial to the group:

IDM Training Limited JICMAIL Limited IDDM Limited WebstraderUK Limited Trust UK Limited NSF Limited Direct Marketing Commission

NSF Limited was dissolved on 29th March 2017.

ANNUAL REPORT 2017


2.3 Going concern

Whilst the company and group incurred an operating loss for the year, the group has positive net current assets and significant cash reserves. The directors accordingly believe the company to be a going concern for at least twelve months from the date of approval of these financial statements and for the foreseeable future.

In the normal course of business, our planning objective is to generate cash funds from operations each year. Then, as the market opportunity arises, it will be possible to commit and invest funds for the long term health of the business.

2.4 Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of servicesRevenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

• the amount of revenue can be measured reliably;

• it is probable that the Group will receive the consideration due under the contract;

• the stage of completion of the contract at the end of the reporting period can be measured reliably; and

• the costs incurred and the costs to complete the contract can be measured reliably.

2.5 Intangible assets - GoodwillGoodwill is capitalised and written off evenly over 10 years as in the opinion of the directors, this represents the period over which the goodwill is expected to give rise to economic benefits.

2.6 Intangible assetsSoftwareThe Group capitalises software expenditure as an intangible asset when it is able to demonstrate all of the following:

• The technical feasibility of completing the development so the intangible asset will be available for use or sale.

• Its intention to complete the development and to use or sell the intangible asset.

• Its ability to use or sell the intangible asset.

• How the intangible asset will generate probable future economic benefits.

• The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.

• Its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Capitalised software expenditure is initially recognised at cost and subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

All research expenditure and development expenditure that does not meet the above conditions is expensed as incurred.

Other intangible assetsIntangible assets purchased other than in a business combination are recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Intangible assets arising on a business combination are recognised, except where the asset arises from legal or contractual rights, and there is no history or evidence of exchange transactions for the same or similar assets and estimating the asset’s fair value would depend on immeasurable variables.


ANNUAL REPORT 2017


Intangible assets are initially recognised at cost (which for intangible assets acquired in a business combination is the fair value at acquisition date) and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets are amortised to profit or loss on a straight-line basis over their useful lives, as follows:-

Other intangible assets 10 years Software 5 years

The Other intangible assets are considered to have a useful life of 10 years and will be amortised over that period on a straight line basis, as much of the value of these assets will be expected to be extracted over this period before these are replaced by newly generated assets. The directors anticipate that the business will continue trading using these assets for many years beyond this but this is a prudent and reasonable period over which to recognise the cost of the assets.

Capitalised software expenditure is amortised on a straight line basis over its useful life, which is between 3 and 5 years. The directors consider these useful lives to be appropriate because the value of these assets will be expected to be extracted over this period.

Amortisation is revised prospectively for any significant change in useful life or residual value.

On disposal, the difference between the net disposal proceeds and the carrying amount of the intangible asset is recognised in the statement of comprehensive income.

2.7 Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight line method.

Depreciation is provided on the following basis:

Fixtures and fittings 5 years Office equipment 5 years Computer equipment 3 years Leasehold improvements 10 years

The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the consolidated statement of comprehensive income.

2.8 Impairment of fixed assets

Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s (or CGU’s) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.


ANNUAL REPORT 2017


2.9 StocksStocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

2.10 Fixed asset investmentsIn the separate accounts of the company, interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

Interests in subsidiaries, associates and jointly controlled entities are assessed for impairment at each reporting date. Any impairments losses or reversals of impairment losses are recognised immediately in profit or loss.

2.11 Cash and cash equivalentsCash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company’s cash management.

2.12 Financial instrumentsA financial asset or a financial liability is recognised only when the company becomes a party to the contractualprovisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Debt instruments are subsequently measured at amortised cost.

Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics.

Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.


ANNUAL REPORT 2017


2.13 Foreign currency translation

Transactions and balancesForeign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Profit and loss account except when deferred in other comprehensive income as qualifying cash flow hedges.

2.14 Operating leases: the Group as lesseeRentals paid under operating leases are charged to the profit and loss account on a straight line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the period until the date the rent is expected to be adjusted to the prevailing market rate.

The Group has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 1 April 2014 to continue to be charged over the period to the first market rent review rather than the term of the lease.

2.15 PensionsDefined contribution pension planThe Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payments obligations.

The contributions are recognised as an expense in the Profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

2.16 Interest incomeInterest income is recognised in the Profit and loss account using the effective interest method.

2.17 Provisions for liabilitiesProvisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

Provisions are charged as an expense to the Profit and loss account in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance sheet.

2.18 TaxationThe tax expense represents the sum of the current tax expense and deferred tax expense. Current tax assets are recognised when tax paid exceeds the tax payable.

Current tax is based on taxable profit for the year. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on tax rates that have been enacted or substantively enacted by the reporting date.


ANNUAL REPORT 2017


Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition in the financial statements. Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is recognised on income or expenses from subsidiaries, associates, branches and interests in jointly controlled entities, that will be assessed to or allow for tax in a future period except where the Group is able to control the reversal of the timing difference and it is probable that the timing difference will not reverse in the foreseeable future.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination and the amounts that can be deducted or assessed for tax. The deferred tax recognised is adjusted against goodwill.

Current and deferred tax is charged or credited in profit or loss, except when it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction or event it relates to and is also charged or credited to other comprehensive income, or equity.

Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

2.19 Employee benefitsThe costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or are capitalised as an intangible fixed asset or a tangible fixed asset.

The holiday year for the Group ends at the reporting date and employees are not entitled to carry forward unused holiday.

3. Judgements in applying accounting policies and key sources of estimation uncertaintyThe annual amortisation charge for intangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re assessed annually. They are amended when necessary to reflect current estimates, based on market conditions, future investments, and economic utilisation. See note 14 for the carrying amount of the intangible assets and note 2.5 for the amortisation policies used.

The directors do not consider that there are any other significant judgements in applying accounting policies or estimation uncertainty arising in the preparation of these financial statements


ANNUAL REPORT 2017



4. TURNOVER Analysis of turnover by country of destination:

2017£

2016£

United Kingdom 7,744,814 7,274,349Rest of the World 235,015 100,000

7,979,829 7,374,349

100% turnover generated for services rendered.

5. OTHER OPERATING INCOME 2017£

2016£

Net rents receivable 84,857 215,317Sundry income — 760

84,857 216,077

ANNUAL REPORT 2017


6. OPERATING LOSS The operating loss is stated after charging:

2017£

2016£

Depreciation of owned tangible fixed assets 87,618 168,948Impairment of owned tangible fixed assets — 29,785Amortisation of intangible assets, including goodwill 139,163 43,014Fees payable to Group’s auditor 46,500 56,500Operating lease rentals: Land and buildings 375,000 375,000

7. AUDITORS’ REMUNERATION 2017£

2016£

Fees payable to RSM UK Audit LLP and its associates in respect of both audit and non-audit services are as follows:

Audit services – Statutory audit of parent and consolidated accounts 19,500 19,500Other services:Audit services – statutory audit of subsidiaries 26,500 27,000Taxation compliance services — 6,000All other non-audit services — 4,000

46,500 56,500


ANNUAL REPORT 2017


8. EMPLOYEES Staff costs, including directors’ remuneration, were as follows:

2017£

2016£

Wages and salaries 3,299,435 3,823,459Social security costs 339,181 231,572Cost of defined contribution scheme 34,697 23,877

3,673,313 4,078,908

The average monthly number of employees, including the directors, during the year was as follows:

2017£

2016£

No. No.

Management 8 7Administration & Finance 11 13Sales & Marketing 17 12Customer Service 19 13Operational 34 33

89 78

9. DIRECTORS’ REMUNERATION For the year ended 31 March 2017, Directors’ remuneration totalled £427,640 (2016: £307,628).

The total amount payable to the highest paid director in respect of emoluments was £220,370, i ncluding £7,750 in contributions to pension schemes (2016: £209,396).

10. INTEREST RECEIVABLE 2017£

2016£

Other interest receivable 15,883 17,739


ANNUAL REPORT 2017


11. TAXATION 2017£

2016£

Corporation tax

Current tax on profits for the year — 572Deferred tax (8,586) (7,169)

Total current tax (8,586) (6,597)

Factors affecting tax charge for the yearThe tax assessed for the year is lower than (2016 higher than) the standard rate of corporation tax in the UK of 20% (2016 20%). The differences are explained below:

2017£

2016£

Profit on ordinary activities before tax (419,303) 20,433

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 20% (2016 20%)

(83,861)

4,087

Effects of:Expenses not deductible for tax purposes, other than goodwill amortisation and impairment 6,253 6,370Capital allowances for year in excess of depreciation 3,424 (3,989)Utilisation of tax losses — (13,637)Adjustments in relation to previous years — 572Increase or decrease in pension fund prepayment leading to an increase (decrease) in tax

(12,770)

—

Unrelieved tax losses carried forward 78,367 —

Total current tax (8,586) (6,597)

Factors that may affect future tax charges

There were no factors that may affect future tax charges.

12. PARENT COMPANY PROFIT FOR THE YEAR

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements. The loss after tax of the parent Company for the year was £401,644 (2016 - loss £112,031).


ANNUAL REPORT 2017



13. INTANGIBLE ASSETS Software Goodwill and other intangible assets

Total

£ £ £

Cost At 1 April 2016 — 516,160 516,160Transfer from tangible fixed assets 471,131 — 471,131Additions 138,485 — 138,485

At 31 March 2017 609,616 516,160 1,125,776

AmortisationAt 1 April 2016 — 43,013 43,013Transfer from tangible fixed assets 259,744 — 259,744Charge for the year 59,589 51,615 111,204

At 31 March 2017 319,333 94,628 413,961

Net book valueAt 31 March 2017 290,283 421,532 711,815

At 31 March 2016 — 473,147 473,147

The intangible assets acquired on the acquisition of the IDM companies have been valued at £516,161, including goodwill of £86,025. The remaining value of £430,136 is attributed as follows:

IDM Brand [10%]This the use of the IDM brand within the marketing industry and in conjunction with the DMA activities.

Customer lists [40%] The value lies in the goodwill of customers and members of the Institute of Direct and Digital Marketing – and the possibility of cross selling products between the DMA and the IDM.

IDM Course Materials - IPR [10%]Over the years, the IDM has developed a suite of market-leading data and digital training courses to educate and enlighten the UK marketing sector.

Alumnae Community [20%]There are over 1,000 members of the Institute of Direct Marketing who have qualified through IDM qualification courses. There is a strong affection and affiliation with these members – who have the potential to be supporters of the DMA.

Councils and network of Tutors [20%]The IDM has a number of marketing industry councils that we deem to have a valuable role in steering the future of the combined DMA Group. The tutors are secured by the IDM under contract and are considered to be a business USP.

Amortisation of Intangible assetsEach Intangible asset identified above is considered to have a useful life of 10 years and will be amortised on a straight-line basis as much of the value of these assets will be expected to be extracted over this period before these are replaced by newly generated assets. The directors anticipate that the business will continue trading using these assets for many years beyond this but this is a prudent and reasonable period over which to recognise the costs of the assets.

ANNUAL REPORT 2017



13. INTANGIBLE ASSETS (continued)

COMPANY Software £

Total £

Cost At 1 April 2016 — —Transfer from tangible fixed assets 404,736 404,736Additions 15,783 15,783

At 31 March 2017 420,519 420,519

AmortisationAt 1 April 2016 — —Transfer from tangible fixed assets 250,181 250,181Charge for the year 39,707 39,707

At 31 March 2017 289,888 289,888

Net book valueAt 31 March 2017 130,631 130,631

At 31 March 2016 — —

ANNUAL REPORT 2017



14. TANGIBLE FIXED ASSETS

Group Plant andMachinery

Fixtures and fittings

ComputerEquipment

Leasehold Improvements

Total

£ £ £ £ £

Cost or valuationAt 1 April 2016 245,475 31,738 631,446 203,706 1,112,365

Transfer to intangible assets — — (471,131) — (471,131)Additions 3,000 224 38,224 715,899 757,347Disposals (113) — (502) (103,981) (104,596)Adjustments — (9,855) 254,141 (21,974) 222,312

At 31 March 2017 248,362 22,107 452,178 793,650 1,516,297

DepreciationAt 1 April 2016 192,699 17,589 385,299 58,973 654,560

Transfer to intangible assets — — (259,744) — (259,744)Charge for period 28,322 5,600 33,331 46,208 113,461Disposals (114) — (125) (33,108) (33,347)Adjustments — — 246,816 (14,227) 222,311

At 31 March 2017 220,907 12,911 405,577 57,846 697,241

Net book valueAt 31 March 2017 27,455 9,196 46,601 735,804 819,056

At 31 March 2016 52,776 14,149 246,147 144,733 457,805

ANNUAL REPORT 2017



14. TANGIBLE FIXED ASSETS (continued)

Company Plant andMachinery

ComputerEquipment


Total

£ £ £ £

Cost or valuationAt 1 April 2016 245,475 501,184 181,732 928,391

Transfer to intangible assets — (404,736) — (404,736)Additions 3,000 36,640 715,899 755,539Disposals (113) — (103,981) (104,094)

At 31 March 2017 248,362 133,088 793,650 1,177,101

DepreciationAt 1 April 2016 192,699 322,477 44,746 559,922

Transfer to intangible assets — (250,181) — (250,181)Charge for period 28,323 19,058 46,207 93,588Disposals (114) — (33,108) (33,222)

At 31 March 2017 220,907 91,354 57,846 370,107

Net book valueAt 31 March 2017 27,455 41,734 735,804 804,993

At 31 March 2016 52,776 178,707 136,986 368,469

ANNUAL REPORT 2017



15. INVESTMENTS The following were subsidiary undertakings of the Company:

Name

Country of Incorporation

Class of shares

Holding

The Telephone Preference Service Limited England & Wales Ordinary 100%The Institute of Direct and Digital Marketing Training Limited England & Wales Ordinary 100%IDM Membership Limited England & Wales Ordinary 100%NSF Limited (dissolved 29 March 2017) England & Wales — 100%IDM Training Limited England & Wales Ordinary 100%JICMAIL Limited England & Wales — 100%IDDM Limited England & Wales Ordinary 100%Webtrader UK Limited England & Wales — 100%TrustUK Limited England & Wales — 100%Direct Marketing Commission England & Wales — 100%

NSF Limited, JICMAIL Limited, Webtrader UK Limited, TrustUK Limited and The Direct Marketing Commission are limited by guarantee and do not have any issued share capital.

COMPANY

Cost Shares in group undertakings£

At 1 April 2016 and 31 March 2017 1000

16. STOCKS

Group2017

£

Group2016

£

Company2017

£

Company2016

£

Finished goods and goods for resale 9,300 12,951 — —

9,300 12,951 — —

The difference between purchase price or production cost of stocks and their replacement cost is not material.

ANNUAL REPORT 2017



17. DEPTORS Plant andMachinery

ComputerEquipment


Total

£ £ £ £

Due after more than one year

Other debtors 450,000 450,000 450,000 450,000

Due within one year

Trade debtors 1,592,056 1,700,938 1,007,330 1,172,363Amounts owed by group undertakings — — 96,549 120,283Other debtors 209,019 252,115 184,384 201,048Prepayments and accrued income 34,132 79,555 — —

2,285,207 2,482,608 1,738,263 1,943,694

18. CASH AND CASH EQUIVALENTS

Group2017

£

Group2016

£

Company2017

£

Company2016

£

Cash at bank and in hand 2,653,652 3,241,530 1,340,022 1,729,077

2,653,652 3,241,530 1,340,022 1,729,077

19. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group2017

£

Group2016

£

Company2017

£

Company2016

£

Trade creditors 201,462 392,852 81,884 155,583Taxation and social security 280,647 242,002 104,510 155,806Other creditors 994,179 592,142 869,550 445,985Accruals and deferred income 2,835,749 2,846,163 1,159,327 1,083,584

4,312,037 4,073,159 2,215,271 1,840,958

ANNUAL REPORT 2017



20. PROVISIONS - DEFERRED TAX

The deferred tax included in the balance sheet is as follows:

Group2017

£

Group2016

£

Company2017

£

Company2016

£Arising on fair value adjustment on acquisition of subsidiaries

70,270

78,856

—

Movements in the accounts are as follows:Group

2017£

Group2016

£

Company2017

£

Company2016

£

At 1 April 2016 78,856 — —Arising on acquisition of subsidiary — 86,025 —Released to tax charge (8,586) (7,169) —

At 31 March 2017 70,270 78,856 —

21. RESERVES

Profit and loss account:-

This reserve records retained earnings and accumulated losses.

22. COMPANY STATUSThe company is a private company limited by guarantee and consequently does not have share capital. Each of the members is liable to contribute an amount not exceeding £1 towards the assets of the company in the event of liquidation.

ANNUAL REPORT 2017



23. PENSION COMMITMENTS

The Group and the company operates a defined contribution pension scheme for certain employees. The assets of the scheme are held separately from those of the Group and the company in an independently administered fund. The pension cost charge represents contributions payable by the Group and the company to the fund and amounted to £34,697 for the Group of which £23,507 related solely to the company (2016, Group - £23,877, company- £19,309). Contributions totalling £1,975 for the Group and £1,250 solely in relation to the company (2016, Group - £1,770, Company - £1,058) were payable to the fund at the balance sheet date.

24. COMMITMENTS UNDER OPERATING LEASES

The total future minimum lease payments under non-cancellable operating leases for land & buildings and plant & machinery are as follows:-:

Group2017

£

Group2016

£

Company2017

£

Company2016

£

Not later than one year 380,683 508,446 380,016 379,446

Later than one year and not later than five years

1,507,524

1,500,667

1,507,524

1,500,000

Later than five years 2,531,250 2,906,250 2,531,250 2,906,250

4,419,457 4,915,363 4,418,790 4,785,696

25. RELATED PARTY TRANSACTIONS

Key Management Personnel RemunerationThe remuneration and benefits received by key management personnel was £527,346 (2016: £510,248).

A member of the key management personnel of the company was remunerated through a personal service company. The amount paid during the year was £99,706 (2016: £122,518).

An amount of £104,519 (2016: £97,289) was paid during the year to a company controlled by one of the directors for services provided by a close member of the director’s family. At the year end £6,216 (2016: £3,023) was outstanding to the related party and included within the group Trade Creditors balance.

CompanyThe company has taken advantage of the exemption contained in FRS 102 and has therefore not disclosed transactions or balances with entities which are wholly owned subsidiaries of the Group.

26. POST BALANCE SHEET EVENTSThere have been no post balance sheet events.

ANNUAL REPORT 2017



27. FINANCIAL INSTRUMENTS

The carrying amount for each category of financial instrument is as follows:

2017 £

2016 £

Financial assets

Financial assets that are debt instruments measured at amortised cost 4,938,860 5,644,584

Financial liabilities

Financial liabilities measured at amortised cost 1,601,417 1,647,228

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