Company Registration No. 06663645 (England and Wales)
Hello Games Ltd
Annual report and financial statements
for the year ended 31 October 2021
Hello Games Ltd
Company information
Director
S Murray
Secretary
L Murray
Company number
06663645
Registered office
Dolphin House
3 North Street
Guilford
Surrey
GU1 4AA
Independent auditor
Saffery Champness LLP
71 Queen Victoria Street
London
EC4V 4BE
Hello Games Ltd
Contents
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
Hello Games Ltd
Strategic report
For the year ended 31 October 2021
Page 1
The director presents the strategic report for the year ended 31 October 2021.
Fair review of the business
Hello Games has continued to focus on the game No Man’s Sky during this financial year and has released new content at no extra cost to the players and continue to improve the gaming experience for our customers.
Key performance indicators
The Company monitors various KPIs for the purpose of reviewing the financial and business performance of the Company.
£'000
YE 31 Oct 21
YE 31 Oct 20
Revenue
27,403
35,324
Operating Profit
18,886
7,940
OP %
69%
22%
Principal risks and uncertainties
The market in which the Company operates is highly competitive and consumer oriented, therefore the potential success or failure of a title is hard to predict during development.
The Company is mitigating these risks by investing in the development of new content and enhancing our existing titles to maintain market presence during the creation of new titles.
An uncertain economic climate
As expected, the impact of COVID-19 on the global economy has been significant and the economic outlook continues to be uncertain with new factors such as the war in Ukraine adding to the challenge as economies strive to recover. Despite this, the directors recognise that the computer games industry continues to see an increase in sales of games through the digital platforms.
The measures Hello Games implemented to minimise disruption through COVID-19 enabled the team to work with minimal interruption and demonstrated the team’s ability to be agile, adjusting to changing needs, and this put us in a good place to continue to be flexible, meeting future demands placed on the sector.
S Murray
Director
30 November 2022
Hello Games Ltd
Director's report
For the year ended 31 October 2021
Page 2
The director presents his annual report and financial statements for the year ended 31 October 2021.
Principal activities
The principal activity of the company continued to be that of games development.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
S Murray
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Future developments
Hello Games will continue to develop and release new content for No Man's Sky, whilst simultaneously developing new titles.
Auditor
The auditor, Saffery Champness LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of director's responsibilities
The director is responsible for preparing the strategic report and director's report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is 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 director is required to:
-
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.
The director is 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. He is 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.
Hello Games Ltd
Director's report (continued)
For the year ended 31 October 2021
Page 3
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
On behalf of the board
S Murray
Director
30 November 2022
Hello Games Ltd
Independent auditor's report
To the members of Hello Games Ltd
Page 4
Opinion
We have audited the financial statements of Hello Games Ltd (the 'company') for the year ended 31 October 2021 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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).
In our opinion, the financial statements:
-
give a true and fair view of the state of the company’s affairs as at 31 October 20
and of its profit for the
year
then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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
Auditor's
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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Hello Games Ltd
Independent auditor's report (continued)
To the members of Hello Games Ltd
Page 5
The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
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 director's
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
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 identifie
d
material misstatements in the strategic report or the director's
r
eport
.
We have nothing to report in respect of the following matters in relation to which 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
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's
r
esponsibilities
s
tatement, the director is 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 director determines is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
director is
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 director either intends to liquidate the company or to cease operations, or has
no realistic alternative but to do so.
Hello Games Ltd
Independent auditor's report (continued)
To the members of Hello Games Ltd
Page 6
Auditor's 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 an
auditor's
report 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
.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the director, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with director and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud
.
Hello Games Ltd
Independent auditor's report (continued)
To the members of Hello Games Ltd
Page 7
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 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.
Moses Nyachae (Senior Statutory Auditor)
For and on behalf of Saffery Champness LLP
30 November 2022
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
Hello Games Ltd
Statement of comprehensive income
For the year ended 31 October 2021
Page 8
2021
2020
Notes
£'000
£'000
Turnover
3
27,403
35,324
Cost of sales
(3,882)
(26,286)
Gross profit
23,521
9,038
Administrative expenses
(4,638)
(1,098)
Operating profit
4
18,883
7,940
Interest receivable and similar income
7
27
71
Profit before taxation
18,910
8,011
Tax on profit
8
(674)
(1,164)
Profit for the financial year
18,236
6,847
The income statement has been prepared on the basis that all operations are continuing operations.
Hello Games Ltd
Statement of financial position
As at 31 October 2021
Page 9
31 October
31 October
2021
2020
Notes
£'000
£'000
£'000
£'000
Fixed assets
Tangible assets
9
196
152
Current assets
Debtors
11
3,696
10,183
Cash at bank and in hand
101,567
75,097
105,263
85,280
Creditors: amounts falling due within one year
12
(2,233)
(442)
Net current assets
103,030
84,838
Total assets less current liabilities
103,226
84,990
Capital and reserves
Called up share capital
14
1
1
Profit and loss reserves
103,225
84,989
Total equity
103,226
84,990
The financial statements were approved and signed by the director and authorised for issue on 30 November 2022
S Murray
Director
Company Registration No. 06663645
Hello Games Ltd
Statement of changes in equity
For the year ended 31 October 2021
Page 10
Share capital
Profit and loss reserves
Total
£'000
£'000
£'000
Balance at 1 November 2019
1
78,142
78,143
Year ended 31 October 2020:
Profit and total comprehensive income for the year
-
6,847
6,847
Balance at 31 October 2020
1
84,989
84,990
Year ended 31 October 2021:
Profit and total comprehensive income for the year
-
18,236
18,236
Balance at 31 October 2021
1
103,225
103,226
Hello Games Ltd
Statement of cash flows
For the year ended 31 October 2021
Page 11
2021
2020
Notes
£'000
£'000
£'000
£'000
Cash flows from operating activities
Cash generated from operations
18
22,014
4,157
Income taxes refunded/(paid)
4,473
-
Net cash inflow from operating activities
26,487
4,157
Investing activities
Interest received
27
71
Net cash generated from investing activities
27
71
Net increase in cash and cash equivalents
26,514
4,228
Cash and cash equivalents at beginning of year
75,097
70,869
Cash and cash equivalents at end of year
101,567
75,097
Hello Games Ltd
Notes to the financial statements
For the year ended 31 October 2021
Page 12
1
Accounting policies
Company information
Hello Games Ltd is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Dolphin House, 3 North Street, Guilford, Surrey, GU1 4AA.
1.1
Accounting convention
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”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £'000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Consolidated financial statements
The Company has taken advantage of the exemption in section 400 of Companies Act 2006 from the requirement to prepare consolidated financial statements. Consequently, these financial statements present the financial position and financial performance of the Company as a single entity.
1.3
Going concern
A
true
t the time of approving the financial statements
,
t
he director has a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future.
Thus
t
he director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for
products
provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of
video game licences
is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch or download)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Accrued income balances arise when sales have been made by distributors to the end user, but royalty payments have not been made to Hello Games Ltd.
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
1
Accounting policies (continued)
Page 13
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Leasehold
20% straight line
Motor vehicles
20% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.7
Cash at bank and in hand
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
1
Accounting policies (continued)
Page 14
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
1
Accounting policies (continued)
Page 15
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
Taxation
The tax expense represents the sum of the tax currently payable
, tax currently recoverable under video games tax relief legislation,
and deferred tax.
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
1
Accounting policies (continued)
Page 16
Current tax
The tax currently payable is based on taxable profit
and video games tax credit
for the year. Taxable profit differs from net profit as reported in the
income statement
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
Video games tax credit is an additional deduction relating to qualifying video game development expenditure.
The
company’s tax position
is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
1.11
Employee benefits
The 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
fixed assets
.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
Foreign exchange
Transactions in currencies other than
pounds sterling
are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
Page 17
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The key judgement impacting the financial statements are in respect of the inputs and judgements associated with the video games tax relief claim. Changes to these judgements would result in a higher or lower corporation tax credit.
3
Turnover and other revenue
2021
2020
£'000
£'000
Turnover analysed by class of business
Video game sales
27,403
35,324
2021
2020
£'000
£'000
Turnover analysed by geographical market
UK
5,424
8,980
Europe
135
136
Rest of the world
21,844
26,208
27,403
35,324
2021
2020
£'000
£'000
Other significant revenue
Interest income
27
71
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
Page 18
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£'000
£'000
Exchange losses/(gains)
2,104
(650)
Fees payable to the company's auditor for the audit of the company's financial statements
23
23
Depreciation of owned tangible fixed assets
156
30
Operating lease charges
160
160
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Game development
38
35
Administration
2
2
Total
40
37
Their aggregate remuneration comprised:
2021
2020
£'000
£'000
Wages and salaries
2,853
22,401
Social security costs
320
3,027
Pension costs
117
93
3,290
25,521
6
Director's remuneration
2021
2020
£'000
£'000
Remuneration for qualifying services
70
14,070
The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 1 (2020 - 1).
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
Page 19
7
Interest receivable and similar income
2021
2020
£'000
£'000
Interest income
Interest on bank deposits
27
71
8
Taxation
2021
2020
£'000
£'000
Current tax
UK corporation tax on profits for the current period
674
1,164
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£'000
£'000
Profit before taxation
18,910
8,011
Expected tax charge based on the standard rate of corporation tax in the UK of 19% (2020: 19%)
3,593
1,522
Enhanced losses arising from the video game tax credit
(2,871)
(269)
Losses
(48)
(89)
Taxation charge for the year
674
1,164
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
Page 20
9
Tangible fixed assets
Land and buildings Leasehold
Motor vehicles
Total
£'000
£'000
£'000
Cost
At 1 November 2020 and 31 October 2021
189
163
352
Depreciation and impairment
At 1 November 2020
56
85
85
Depreciation charged in the year
71
71
At 31 October 2021
127
85
156
Carrying amount
At 31 October 2021
118
78
196
At 31 October 2020
133
19
152
10
Subsidiaries
Details of the company's subsidiaries at 31 October 2021 are as follows:
Name of undertaking
Address
Nature of business
Class of shares held
% Held
Direct
Indirect
Hello Labs Limited
1
Dormant
Ordinary
100
-
Hello Developments Limited
1
Dormant
Ordinary
100
-
Registered office addresses (all UK unless otherwise indicated):
1
Dolphin House, 3 North Street, Guildford, Surrey, England, GU1 4AA
11
Debtors
2021
2020
Amounts falling due within one year:
£'000
£'000
Trade debtors
2,106
4,455
Corporation tax recoverable
3,414
Other debtors
158
Prepayments and accrued income
1,515
2,081
3,621
10,108
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
11
Debtors (continued)
Page 21
2021
2020
Amounts falling due after more than one year:
£'000
£'000
Other debtors
75
75
Total debtors
3,696
10,183
12
Creditors: amounts falling due within one year
2021
2020
£'000
£'000
Trade creditors
159
121
Corporation tax
1,733
Other taxation and social security
118
162
Other creditors
15
25
Accruals and deferred income
98
24
Dilapidation provision
110
110
2,233
442
13
Retirement benefit schemes
Defined contribution schemes
2021
2020
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
25
93
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
Page 22
14
Share capital and reserves
Share capital
31 October
31 October
2021
2020
£
£
Ordinary share capital
Issued and fully paid
650 Ordinary of £1 each
650
650
130 Ordinary A of £1 each
130
130
130 Ordinary B of £1 each
130
130
130 Ordinary C of £1 each
130
130
1,040
1,040
Each share is entitled to one vote in any circumstances.
Reserves
2021
2020
£'000
£'000
Profit and loss account
18,063
6,847
Cumulative profit and loss net of distributions to owners
84,989
78,142
103,052
84,989
15
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£'000
£'000
Within one year
160
160
Between two and five years
640
640
In over five years
90
253
890
1,053
Hello Games Ltd
Notes to the financial statements (continued)
For the year ended 31 October 2021
Page 23
16
Controlling party
The company is controlled by the sole director and majority shareholder, S Murray.
17
Analysis of changes in net funds
1 November 2020
Cash flows
31 October 2021
£'000
£'000
£'000
Cash at bank and in hand
75,097
26,470
101,567
18
Cash generated from operations
31 October
31 October
2021
2020
£'000
£'000
Profit for the year after tax
18,236
6,847
Adjustments for:
Taxation charged
674
1,164
Investment income
(27)
(71)
Depreciation and impairment of tangible fixed assets
71
30
Movements in working capital:
Decrease/(increase) in debtors
3,073
(3,457)
Increase/(decrease) in creditors
58
(356)
Cash generated from operations
22,085
4,157
19
Share-based payments
An option to acquire 3% of shares in issue at the date of exercise at an exercise price of £1 per share was issued on 5 May 2014 to a third party and remains in force. This option is subject to certain defined preconditions.
Options issued on 4 June 2015 over a further 285 shares with exercise price of £978.90 per share also subsist at the balance sheet date in favour of 5 employees. These options are subject to preconditions relating to duration of service and company performance.
All options may be fulfilled by either the issue of new shares or the transfer of existing shares.
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