LUCID GAMES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
Company Registration No. 07497245 (England and Wales)
LUCID GAMES LIMITED
COMPANY INFORMATION
Directors
Miss H L Davidson
Mr P C Wallace
Mr N J Davies
Mr B T Woodhouse
Secretary
Miss H L Davidson
Company number
07497245
Registered office
29-31 Parliament Street
Liverpool
L8 5RN
Auditor
DSG
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
LUCID GAMES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
LUCID GAMES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 1 -
The directors present the strategic report for the year ended 31 March 2022.
Principal activity and fair review of the business
The principal activity of the company continued to be
that of the provision of management services to the wider group.
In the year turnover has increased from £12.5m to £13.5m at 31 March 2022. This has led to an increase in operating profit from £0.3m to £1.1m. The balance sheet has remained strong increasing to c.£4.4m (2021: £3.0m) and cash has increased over the year to c.£0.3m.
Principal risks and uncertainties
The principal risks and uncertainty's facing the company are as follows:
Liquidity risk
The company manages its cash in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient resources to meet the operating needs of the business.
Credit risk
The company monitors credit risk closely and considers that its current credit checking policy meets its objectives in mitigating risk in this area. Trade debtors are reviewed on a regular basis and provision made for doubtful debts when necessary.
Coronavirus risk
COVID-19 has increased instability in global markets however, we are seeing evidence that gaming has been a COVID resistant industry. Our mitigation plans include allowing for full remote working from home, as well as a hybrid option for those who still want flexibility to work wherever they feel comfortable. From a recruitment perspective, COVID has meant that where previously a strictly studio-based, localised development company, we can now attract and hire talent from anywhere in the world.
Non financial risk
The quality and technical ability of staff is fundamental to the operations of the business. Therefore, being able to retain and also recruit new staff remains a key focus for the business.
Key performance indicators
The company strategy is one of growth and continued profitability. Performance for the current year, together with comparative data for the previous year, is set out below:
(a) Turnover
The company performed as expected due to service requirements within the wider group. As such turnover increased from £12.5m to £13.5m.
(b) Operating profit
Operating profit increased from £0.3m to £1.2m, due to the level of services provided around the group.
Future developments
The goal is to continue the growth of the studio and focus on creating our own internally generated IP alongside expanding our co-development teams.
LUCID GAMES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 2 -
Miss H L Davidson
Director
21 December 2022
LUCID GAMES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2022.
The report contains the statutory information disclosed in addition to that set out in the strategic report. Information relating to principal activity and risk management, which would otherwise be included in the Directors Report, is included in the Strategic Report.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Miss H L Davidson
Mr P C Wallace
Mr N J Davies
Mr B T Woodhouse
Auditor
DSG were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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
Miss H L Davidson
Director
21 December 2022
LUCID GAMES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2022
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have 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 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:
-
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 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.
LUCID GAMES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LUCID GAMES LIMITED
- 5 -
Opinion
We have audited the financial statements of Lucid Games Limited (the 'company') for the year ended 31 March 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 March 2022 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.
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 directors' 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 directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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 our audit
:
-
the information given in the strategic report and the directors'
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 directors' report have been prepared in accordance with applicable legal requirements.
LUCID GAMES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LUCID GAMES LIMITED
- 6 -
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 directors'
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 directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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 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
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.
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
.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
LUCID GAMES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LUCID GAMES LIMITED
- 7 -
Capability of the audit in detecting irregularities, including fraud
Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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.
Laura Leslie BSc ACA
Senior Statutory Auditor
For and on behalf of DSG
21 December 2022
Chartered Accountants
Statutory Auditor
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
LUCID GAMES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
13,520,276
12,538,256
Cost of sales
(3,489,779)
(5,898,057)
Gross profit
10,030,497
6,640,199
Administrative expenses
(8,800,499)
(6,333,213)
Other operating income
5,746
10,000
Operating profit
4
1,235,744
316,986
Interest payable and similar expenses
7
(106,963)
(31,367)
Profit before taxation
1,128,781
285,619
Tax on profit
8
292,369
265,748
Profit for the financial year
1,421,150
551,367
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LUCID GAMES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
- 9 -
2022
2021
£
£
Profit for the year
1,421,150
551,367
Other comprehensive income
-
-
Total comprehensive income for the year
1,421,150
551,367
LUCID GAMES LIMITED
BALANCE SHEET
AS AT
31 MARCH 2022
31 March 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
10
8,760
13,142
Tangible assets
11
497,694
446,135
Investments
12
1,206,000
1,206,000
1,712,454
1,665,277
Current assets
Debtors
14
6,073,037
5,221,031
Cash at bank and in hand
271,521
98,687
6,344,558
5,319,718
Creditors: amounts falling due within one year
15
(3,631,399)
(3,980,532)
Net current assets
2,713,159
1,339,186
Net assets
4,425,613
3,004,463
Capital and reserves
Called up share capital
18
1
1
Profit and loss reserves
4,425,612
3,004,462
Total equity
4,425,613
3,004,463
The financial statements were approved by the board of directors and authorised for issue on 21 December 2022 and are signed on its behalf by:
Miss H L Davidson
Director
Company Registration No. 07497245
LUCID GAMES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2020
1
2,771,595
2,771,596
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
551,367
551,367
Dividends
9
-
(318,500)
(318,500)
Balance at 31 March 2021
1
3,004,462
3,004,463
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
1,421,150
1,421,150
Balance at 31 March 2022
1
4,425,612
4,425,613
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
- 12 -
1
Accounting policies
Company information
Lucid Games Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
29-31 Parliament Street, Liverpool, L8 5RN.
The principal activity of the company is set out in the strategic report.
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 £
1
.
The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value. The principal accounting policies adopted are set out below and have been consistently applied.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues
: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The company has taken advantage of the exemption under section 400 of the
Companies Act 2006 not to prepare consolidated accounts. The
financial statements
present information about the company as an individual entity and not about its group
.
Lucid Games Limited is a wholly owned subsidiary of Lucid Entertainment Group Limited and the results of Lucid Games Limited are included in the consolidated financial statements of Lucid Entertainment Group Limited which are available from the same registered address as the Company.
1.2
Going concern
The Company prepares forecasts which are regularly reviewed by the Directors. The company can operate through its cash reserves and by management of its working capital. The directors regularly review the forecasts and working capital requirements to ensure there is sufficient resources to meet current and future operational needs. At the time of approving the financial statements, the directors understand this to be the case. As such, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
true
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
Turnover is recognised as and when services are delivered on a monthly basis.
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 13 -
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated
.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Development costs
10% Straight Line
1.6
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.
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:
Plant and equipment
20% Straight Line
Fixtures and fittings
20% Straight Line
Computers
33% 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
.
1.7
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in
profit
or
loss
.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.8
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where 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.
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 14 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
Cash and cash equivalents
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.
1.10
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 balance sheet 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
and cash and bank balances, 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.
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.
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 15 -
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.
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.
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.11
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.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
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. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
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
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
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.
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 17 -
1.16
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
Government grants received in the prior year related to rates relief.
1.17
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are 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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Depreciation of tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
3
Turnover
2022
2021
£
£
Turnover analysed by class of business
Sale of goods
13,520,276
12,538,256
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
13,520,276
12,538,256
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 18 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(10,000)
Fees payable to the company's auditor for the audit of the company's financial statements
Depreciation of owned tangible fixed assets
210,575
160,131
Amortisation of intangible assets
4,382
34,590
Government grants relates to coronavirus business support grants.
5
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
162,819
8,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Administrative
9
9
Production
140
117
Total
149
126
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
5,675,167
3,976,150
Social security costs
614,284
434,883
Pension costs
297,523
444,098
6,586,974
4,855,131
7
Interest payable and similar expenses
2022
2021
£
£
Other interest
106,963
31,367
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 19 -
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(348,609)
(265,748)
Adjustments in respect of prior periods
56,240
Total current tax
(292,369)
(265,748)
The actual credit 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:
2022
2021
£
£
Profit before taxation
1,128,781
285,619
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
214,468
54,268
Tax effect of expenses that are not deductible in determining taxable profit
(511)
3,419
Group relief
956
7,454
Research and development tax credit
(584,244)
(316,250)
Under/(over) provided in prior years
56,240
Deferred tax not recognised
20,722
(14,639)
Taxation credit for the year
(292,369)
(265,748)
9
Dividends
2022
2021
£
£
Final paid
318,500
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 20 -
10
Intangible fixed assets
Development costs
£
Cost
At 1 April 2021 and 31 March 2022
462,895
Amortisation and impairment
At 1 April 2021
449,753
Amortisation charged for the year
4,382
At 31 March 2022
454,135
Carrying amount
At 31 March 2022
8,760
At 31 March 2021
13,142
11
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 April 2021
93,915
235,947
669,700
999,562
Additions
58,571
203,563
262,134
At 31 March 2022
93,915
294,518
873,263
1,261,696
Depreciation and impairment
At 1 April 2021
9,391
134,195
409,841
553,427
Depreciation charged in the year
18,783
42,709
149,083
210,575
At 31 March 2022
28,174
176,904
558,924
764,002
Carrying amount
At 31 March 2022
65,741
117,614
314,339
497,694
At 31 March 2021
84,524
101,752
259,859
446,135
12
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
13
1,206,000
1,206,000
On 5 October 2020 the company acquired the entire share capital of Lucid Publishing Ltd. The total consideration paid, including acquisition fees was c.£1.2m.
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 21 -
13
Subsidiaries
These financial statements are separate company financial statements for Lucid Games Limited.
Details of the company's subsidiaries at 31 March 2022 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Lucid Publishing Ltd
5-31 Parliament Street, 5th Floor, Liverpool, England, L8 5RN
Ready-made interactive leisure and entertainment software development
Ordinary
100.00
14
Debtors
2022
2021
Amounts falling due within one year:
£
£
Corporation tax recoverable
558,154
265,748
Amounts owed by group undertakings
2,791,048
2,427,049
Prepayments and accrued income
2,723,835
2,528,234
6,073,037
5,221,031
15
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Other borrowings
16
1,105,000
1,605,000
Trade creditors
188,250
320,452
Amounts owed to group undertakings
1,421,567
1,451,803
Taxation and social security
690,822
310,955
Other creditors
56,589
28,524
Accruals and deferred income
169,171
263,798
3,631,399
3,980,532
16
Loans and overdrafts
2022
2021
£
£
Other loans
1,105,000
1,605,000
Payable within one year
1,105,000
1,605,000
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
16
Loans and overdrafts
(Continued)
- 22 -
Other loans represents a loan in the current year with a director for £1,105,000 (2021: £1,605,000). Interest is charged at 8% and interest paid in the year totalled £107,000 (2021: £31,367). The loan is to be repaid when called upon by the director.
17
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
297,523
444,098
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.
18
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
19
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:
2022
2021
£
£
Within one year
262,461
265,460
Between two and five years
188,519
369,062
450,980
634,522
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 23 -
20
Related party transactions
In the prior year the company entered into a contract with a related party which generated revenue of £nil (2021: £739,903). The company is deemed a related party due to common directors.
Recharges to related parties, due to common directors and shareholders was £nil (2021: £27,334).
During the year the company incurred costs of £661,600 (2021: £620,000) with a related party. The company is deemed to be a related party due to common shareholders.
At the year end amount owing from related parties was £1,742 (2021: £1,742). The companies are deemed to be related parties due to common directors and shareholders.
There was a directors loan of £1,105,000 (2021: £1,605,000) in the year, which is shown in current liabilities in the balance sheet. Interest is charged at 8% and a total of £107,000 (2021: £31,367) was paid in the year.
All related party transactions are done at arms length.
There were no transactions during the year with related parties other than with group companies. The company is exempt from disclosing transactions with group companies that are wholly owned within the same group.
21
Ultimate controlling party
The company is a wholly owned subsidiary of Lucid Entertainment Group
L
td
which is also the ultimate parent company. The
ultimate p
arent company, which prepares consolidated financial statements, is registered in England and Wales at 29-31 Parliament Street, Liverpool, England, L8 5RN.
The smallest and largest group into which the results of this entity are consolidated is that headed by Lucid Entertainment Group Ltd.
The ultimate controlling party is Mr P Wallace.
2022-03-31
2021-04-01
false
CCH Software
CCH Accounts Production 2022.300
No description of principal activity
Mr P C Wallace
Mr N J Davies
Mr B T Woodhouse
Mr B T Woodhouse
Miss H L Davidson
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