REGISTERED NUMBER:
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STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
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FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 DECEMBER 2019 |
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EPIC GAMES UK LTD |
REGISTERED NUMBER:
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STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
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FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 DECEMBER 2019 |
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FOR |
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EPIC GAMES UK LTD |
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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Company Information | 1 |
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Strategic Report | 2 |
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Report of the Directors | 3 |
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Report of the Independent Auditors | 4 |
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Income Statement | 6 |
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Other Comprehensive Income | 7 |
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Balance Sheet | 8 |
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Statement of Changes in Equity | 9 |
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Cash Flow Statement | 10 |
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Notes to the Cash Flow Statement | 11 |
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Notes to the Financial Statements | 12 |
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EPIC GAMES UK LTD |
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COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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DIRECTORS: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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AUDITORS: |
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Chartered Accountants |
Statutory Auditor |
2-4 Packhorse Road |
Gerrards Cross |
Buckinghamshire |
SL9 7QE |
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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The directors present their strategic report for the year ended 31 December 2019. |
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INTRODUCTION |
Consistent with previous years, the principal activity of the company in year under review was the development of computer software. |
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REVIEW OF BUSINESS |
During the year under review: |
Turnover increased by 20.3%, which is in line with the additional administrative costs incurred in developing our software offerings; |
There were no impairments of goodwill in 2019 and as a result, the company's net assets increased by £1,581,591, which included significant additions to the company's tangible fixed assets. |
There are no specific key performance indicators (KPIs) used to monitor the financial performance or position of the company. Additionally, there are no specific non-financial KPIs used by management to monitor non-financial performance. |
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PRINCIPAL RISKS AND UNCERTAINTIES |
The Directors believe that the company faces the following risks and uncertainties: |
The company's success is dependent on the Intercompany Service Agreements with Epic Games Inc. and Epic Games International S.à r.l.; |
Regulatory changes, whether they are a legal or taxation nature, may give rise to uncertainty within the business. |
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OUTLOOK |
The company does not anticipate any significant change in principal activities in 2020. The impact of COVID-19 restrictions in the UK since March 2020, has required the company to rethink some of its processes. This has included embracing working from home guidelines and ensuring that our employees have the means to work from home in an efficient and effective manner. |
The directors do not anticipate any significant adverse effects on the company's continued ability to develop computer software in a work from home environment. |
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ON BEHALF OF THE BOARD: |
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EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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The directors present their report with the financial statements of the company for the year ended 31 December 2019. |
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PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of developing computer software. |
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DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2019. |
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DIRECTORS |
The directors who have held office during the period from 1 January 2019 to the date of this report are as follows: |
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STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
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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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
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- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
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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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
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STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
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AUDITORS |
The auditors, Nunn Hayward LLP, are deemed to be re-appointed under section 487(2) of the Companies Act 2006. |
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ON BEHALF OF THE BOARD: |
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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
EPIC GAMES UK LTD |
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Opinion |
We have audited the financial statements of Epic Games UK Ltd (the 'company') for the year ended 31 December 2019 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
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In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
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Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
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Conclusions relating to going concern |
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: |
- | the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or |
- | the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
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Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
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In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
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Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
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We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
EPIC GAMES UK LTD |
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Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
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In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
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Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
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A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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. |
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for and on behalf of
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Chartered Accountants |
Statutory Auditor |
2-4 Packhorse Road |
Gerrards Cross |
Buckinghamshire |
SL9 7QE |
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EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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INCOME STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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2019 | 2018 |
Notes | £ | £ |
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TURNOVER | 3 |
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Administrative expenses |
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1,549,363 | 1,379,620 |
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Other operating income |
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OPERATING PROFIT | 5 |
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Impairment of goodwill | 6 |
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1,704,185 | (1,245,619 | ) |
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Interest receivable and similar income |
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1,704,237 | (1,245,619 | ) |
Amounts written off investments | 7 | - | (731,719 | ) |
1,704,237 | (1,977,338 | ) |
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Interest payable and similar expenses | 8 |
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PROFIT/(LOSS) BEFORE TAXATION |
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Tax on profit/(loss) | 9 | ( |
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PROFIT/(LOSS) FOR THE FINANCIAL YEAR |
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EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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2019 | 2018 |
Notes | £ | £ |
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PROFIT/(LOSS) FOR THE YEAR |
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( |
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OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR |
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EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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BALANCE SHEET |
31 DECEMBER 2019 |
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2019 | 2018 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 10 |
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Investments | 11 |
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CURRENT ASSETS |
Debtors | 12 |
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Cash at bank |
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CREDITORS |
Amounts falling due within one year | 13 |
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NET CURRENT (LIABILITIES)/ASSETS | ( |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CREDITORS |
Amounts falling due after more than one
year |
14 |
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PROVISIONS FOR LIABILITIES | 17 | ( |
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NET ASSETS |
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CAPITAL AND RESERVES |
Called up share capital | 18 |
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Retained earnings | 19 |
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SHAREHOLDERS' FUNDS |
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The financial statements were approved by the Board of Directors and authorised for issue on
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EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
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Balance at 1 January 2018 |
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Changes in equity |
Issue of share capital |
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Total comprehensive income | - | ( |
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Fair value adjustment for
options in
group company |
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343,246 |
343,246 |
Balance at 31 December 2018 |
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( |
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Changes in equity |
Total comprehensive income | - |
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Fair value adjustment for
options in
group company |
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523,111 |
523,111 |
Balance at 31 December 2019 |
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EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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2019 | 2018 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
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Interest paid |
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Tax paid | ( |
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Net cash from operating activities |
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Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
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Purchase of fixed asset investments |
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Interest received |
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Net cash from investing activities | ( |
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Cash flows from financing activities |
Share issue |
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Net cash from financing activities |
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Decrease in cash and cash equivalents | ( |
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Cash and cash equivalents at beginning
of year |
2 |
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336,141 |
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Cash and cash equivalents at end of year | 2 | 253,826 | 325,366 |
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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NOTES TO THE CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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1. | RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2019 | 2018 |
£ | £ |
Profit/(loss) before taxation |
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Depreciation charges |
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Fair value adjustment for options | 523,111 | 343,246 |
Investment impairment | - | 731,719 |
Goodwill impairment | - | 3,482,621 |
Finance costs | - | 581 |
Finance income | (52 | ) | - |
3,159,088 | 3,099,156 |
Increase in trade and other debtors |
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Increase/(decrease) in trade and other creditors |
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Cash generated from operations |
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2. | CASH AND CASH EQUIVALENTS |
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The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
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Year ended 31 December 2019 |
31.12.19 | 1.1.19 |
£ | £ |
Cash and cash equivalents | 253,826 | 325,366 |
Year ended 31 December 2018 |
31.12.18 | 1.1.18 |
£ | £ |
Cash and cash equivalents | 325,366 | 336,141 |
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3. | ANALYSIS OF CHANGES IN NET FUNDS |
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At 1.1.19 | Cash flow | At 31.12.19 |
£ | £ | £ |
Net cash |
Cash at bank | 325,366 | (71,540 | ) | 253,826 |
325,366 | ( |
) | 253,826 |
Total | 325,366 | (71,540 | ) | 253,826 |
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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1. | STATUTORY INFORMATION |
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Epic Games UK Ltd is a private company, limited by shares, registered in England & Wales. The company's registered number and registered office address can be found on the Company Information page. The company's place of business is Westbury House, Bury Street, Guildford, GU2 4YZ. |
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The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £. |
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2. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
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Going concern |
The annual financial statements have been prepared on the going concern basis due to the continued support of the ultimate parent company and parent company. |
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On a day to day basis the company meets its working capital requirements through cash funding from the ultimate parent company. The company has no overdraft facility in place. |
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Preparation of consolidated financial statements |
The financial statements contain information about Epic Games UK Ltd as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Epic Games International S.a.r.l., 33 rue de Puits Romain, L-8070 Bertrange, Luxembourg.. |
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Critical accounting judgements and key sources of estimation uncertainty |
The most significant judgements made in applying the company's accounting policies and the key sources of estimation uncertainty are in the following areas: |
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Tangible fixed assets |
The high level of investment in tangible fixed assets means that the assessment of expected useful asset lives has a significant impact on the depreciation charges. |
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Cost of share options issued |
The cost of the share options issued is dependent on a number of market variables and the value of the underlying shares, for which independent third party advice is sought, and on the selection of the Black Scholes pricing model as a basis for the valuation. |
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Going concern |
The company derives its turnover from recharges made to other group companies in respect of the services that it provides to those companies under the inter-company service agreements and as such its future trading is dependent on the continuation of those agreements and on the assessment of the relevant companies as going concerns. |
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Turnover |
Turnover represents amounts receivable for services relating to services provided in respect of computer software, excluding value added tax. |
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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2. | ACCOUNTING POLICIES - continued |
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Tangible fixed assets |
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Improvements to property | - |
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Fixtures and fittings | - |
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Computer equipment | - |
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The capitalisation threshold for computer equipment was raised to £4,000 as from 1 January 2019. Given the high tech nature of the industry and the rapid advancements in technology that the company must adapt to, the expected useful life of relatively low value computer equipment is 12 months. |
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Computer equipment purchased by the company that is then configured for and used by other group companies, is expensed in the period of purchase and recharged under the existing inter-company agreements. |
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Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost less accumulated impairment. |
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Financial instruments |
The company only has financial assets and liabilities of a kind that qualify as basic financial instruments, cash at bank, debtors and creditors. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value. |
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Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
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Current or deferred taxation assets and liabilities are not discounted. |
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Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
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Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
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Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
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Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
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Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
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Leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
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The aggregate of lease incentives is recognised as a reduction to the expense recognised over the term of the lease on a straight line basis. |
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Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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2. | ACCOUNTING POLICIES - continued |
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Equity-settled share based payments |
The company's ultimate parent undertaking, Epic Games, Inc., maintains a Stock Incentive Plan which issues equity-settled share-based payments to key employees and directors. Equity-settled share-based payments are measured at fair value at the date of grant using the valuation commissioned from an independent external consultant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the company's estimate of the shares that will eventually vest, with a corresponding entry to retained earnings. |
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3. | TURNOVER |
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The turnover and profit (2018 - loss) before taxation are attributable to the one principal activity of the company. |
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4. | EMPLOYEES AND DIRECTORS |
2019 | 2018 |
£ | £ |
Wages and salaries |
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Social security costs |
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Other pension costs |
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The average number of employees during the year was as follows: |
2019 | 2018 |
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Corporate & support functions | 11 | 7 |
Business development | 19 | 13 |
Computer software development | 54 | 48 |
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2019 | 2018 |
£ | £ |
Directors' remuneration |
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5. | OPERATING PROFIT |
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The operating profit is stated after charging/(crediting): |
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2019 | 2018 |
£ | £ |
Other operating leases |
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Depreciation - owned assets |
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Auditors' remuneration |
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Foreign exchange differences | ( |
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6. | EXCEPTIONAL ITEMS |
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The financial statements for the year ended 31 December 2018 contained exceptional items in relation to Cloudgine Ltd. Cloudgine was acquired in 2017 and its business and net assets were 'hived up' in 2018. After hive up, it was considered that the value of the investment and the goodwill acquired on acquisition were impaired and both were written down in value. This resulted in charges of £3,482,621 for goodwill impairment and £731,719 for impairments of investments in the 2018 financial statements. The company also received a dividend in specie of £702,856 in that year on the hive up of the assets of Cloudgine Ltd. |
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
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7. | AMOUNTS WRITTEN OFF INVESTMENTS |
2019 | 2018 |
£ | £ |
Impairment of investment |
in Cloudgine | - | 731,719 |
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8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2019 | 2018 |
£ | £ |
Interest on overdue taxation |
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9. | TAXATION |
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Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2019 | 2018 |
£ | £ |
Current tax: |
UK corporation tax |
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Corporation tax adjustment re previous year |
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( |
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Total current tax |
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Deferred tax |
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( |
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Tax on profit/(loss) |
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Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
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2019 | 2018 |
£ | £ |
Profit/(loss) before tax |
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( |
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Profit/(loss) multiplied by the standard rate of corporation tax in the UK of
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( |
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Effects of: |
Expenses not deductible for tax purposes |
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Capital allowances in excess of depreciation | ( |
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Depreciation in excess of capital allowances | - |
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Adjustments to tax charge in respect of previous periods |
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( |
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Investment impairment | - | 139,027 |
Goodwill impairment |
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Amortised cost of share options | 99,391 | 65,217 |
Dividend in specie received | - | (133,543 | ) |
Deferred tax charge/(credit) |
|
( |
) |
Total tax charge | 475,087 | 367,936 |
|
Any expected net reversal or net origination of deferred tax in 2020 is expected to be immaterial. |
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
|
10. | TANGIBLE FIXED ASSETS |
Fixtures |
Improvements | and | Computer |
to property | fittings | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2019 |
|
|
|
|
Additions |
|
|
|
|
At 31 December 2019 |
|
|
|
|
DEPRECIATION |
At 1 January 2019 |
|
|
|
|
Charge for year |
|
|
|
|
At 31 December 2019 |
|
|
|
|
NET BOOK VALUE |
At 31 December 2019 |
|
|
|
|
At 31 December 2018 |
|
|
|
|
|
11. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
£ |
COST |
At 1 January 2019 |
and 31 December 2019 |
|
NET BOOK VALUE |
At 31 December 2019 |
|
At 31 December 2018 |
|
|
The company's investments at the Balance Sheet date in the share capital of companies include the following: |
|
|
Registered office: Fifth Floor 1 Exchange Crescent, Conference Square, Edinburgh, Scotland, EH3 8UL |
Nature of business:
|
% |
Class of shares: | holding |
|
|
|
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2019 | 2018 |
£ | £ |
Amounts owed by group undertakings |
|
|
Other debtors |
|
|
Prepayments and accrued income |
|
|
|
|
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
|
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2019 | 2018 |
£ | £ |
Trade creditors |
|
|
Amounts owed to group undertakings |
|
|
Corporation tax |
|
|
Social security and other taxes |
|
|
Other creditors |
|
|
Accrued expenses |
|
|
|
|
|
14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2019 | 2018 |
£ | £ |
Other creditors |
|
|
|
15. | LEASING AGREEMENTS |
|
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2019 | 2018 |
£ | £ |
Within one year |
|
|
Between one and five years |
|
|
|
|
|
16. | FINANCIAL INSTRUMENTS |
|
At the balance sheet date, financial assets measured at amortised cost totalled £19,215,507 (2018: £1,926,131) and financial liabilities measured at amortised cost totalled £18,826,704 (2018: £1,303,411,). |
|
17. | PROVISIONS FOR LIABILITIES |
2019 | 2018 |
£ | £ |
Deferred tax |
Accelerated capital allowances |
|
|
|
Deferred tax |
£ |
Balance at 1 January 2019 |
|
Provided during year |
|
Balance at 31 December 2019 |
|
|
18. | CALLED UP SHARE CAPITAL |
|
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2019 | 2018 |
value: | £ | £ |
|
Ordinary | £1 | 2,913,897 | 2,913,897 |
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
|
19. | RESERVES |
Retained |
earnings |
£ |
|
At 1 January 2019 | ( |
) |
Profit for the year |
|
Fair value adjustment for
options in
group company |
523,111 |
|
At 31 December 2019 |
|
|
20. | RELATED PARTY DISCLOSURES |
|
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
|
21. | PARENT AND ULTIMATE CONTROLLING PARTY |
|
The immediate parent company is Epic Games International S.a.r.l, a company incorporated in Luxembourg, registered office : 33 rue de Puits Romain, L-8070 Bertrange, Luxembourg. |
|
The ultimate parent company and controlling party is Epic Games Inc, a company incorporated in the United States of America. |
EPIC GAMES UK LTD (REGISTERED NUMBER: 02865912) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
|
22. | SHARE-BASED PAYMENT TRANSACTIONS |
|
The company's ultimate US parent undertaking, Epic Games Inc., maintains a Stock Incentive Plan (the Plan), which authorises the granting of incentive stock options to key employees and directors. |
|
Under the plan, the exercise price of each incentive stock option equals the fair market value of each share in Epic Games Inc. on the grant date. Options remain exercisable from the vesting date up until employment termination. Options are fully exercisable subject to conditions as established by the Stock Incentive Plan. |
|
The fair value of options granted on the date of grant, was estimated using the Black-Scholes option pricing model with weighted average assumptions applied at the group Stock Incentive Plan level. The fair value calculated is charged to the income statement on a straight line basis over the vesting period. The Black-Scholes option pricing model was selected as the method appropriate to use when the range of possible future outcomes is difficult to predict as it is a widely recognised method in these circumstances. |
|
The fair value adjustment of options granted under the group Stock Incentive Plan is determined to be £ (523,111 (2018: £343,246) based on options granted to the company's employees. The total cost of these options is spread evenly over the vesting period from the date of grant. |
|
There are 82 employees of Epic Games UK Ltd that benefit from the plan (2018- 9). |
|
A summary of the options activity during the year is shown below: |
|
|
Number |
|
Weighted
average exercise price |
|
|
Brought forward as at 1 January 2019 | 102,659 | $23.85 |
Granted | 34,173 | $317.51 |
Exercised | (2,403 | ) | $14.35 |
Cancelled/forfeited/lapsed | (96 | ) | $27.51 |
|
Outstanding as at 31 December 2019 | 114,088 | $111.63 |
|
Exercisable as at 31 December 2019 | 42,114 | $22.61 |
|
|
|
23. | POST BALANCE SHEET EVENT |
|
The Coronavirus (COVID-19) pandemic is considered to be a non-adjusting post balance sheet event. The Board have considered, and continue to do so, the impact of the pandemic, including travel and social distancing restrictions, on the business and have included specific details within the Strategic Report. |
|
The Board is not aware of any other material adjusting or non-adjusting post balance sheet events. |