LUCID GAMES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Company Registration No. 07497245 (England and Wales)
LUCID GAMES LIMITED
CONTENTS
Page
Balance sheet
1
Statement of changes in equity
2
Notes to the financial statements
3 - 11
LUCID GAMES LIMITED
BALANCE SHEET
AS AT
31 MARCH 2021
31 March 2021
- 1 -
2021
2020
(as restated)
Notes
£
£
£
£
Fixed assets
Intangible assets
4
13,142
47,732
Tangible assets
5
446,135
314,425
Investments
6
1,206,000
1,665,277
362,157
Current assets
Debtors
7
5,221,031
3,630,599
Cash at bank and in hand
98,687
27,261
5,319,718
3,657,860
Creditors: amounts falling due within one year
8
(3,980,532)
(1,248,421)
Net current assets
1,339,186
2,409,439
Net assets
3,004,463
2,771,596
Capital and reserves
Called up share capital
1
1
Profit and loss reserves
3,004,462
2,771,595
Total equity
3,004,463
2,771,596
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 21 December 2021 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 2021
- 2 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2019
1
2,414,768
2,414,769
Year ended 31 March 2020:
Profit and total comprehensive income for the year
-
907,327
907,327
Dividends
-
(550,500)
(550,500)
Balance at 31 March 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
-
(318,500)
(318,500)
Balance at 31 March 2021
1
3,004,462
3,004,463
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
- 3 -
1
Accounting policies
Company information
Lucid Games Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
31 Parliament Street, 5th Floor, Liverpool, L8 5RN.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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.
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
As part of assessing the potential impact of the ongoing COVID-19 virus situation management has prepared financial forecasts. These forecasts indicate that the company will continue to trade profitably, and generate cash, over the period considered by them in their assessment of the appropriateness of adopting the going concern basis in the preparation of these financial statements.
true
Management has also considered the impact of potential operational challenges posed by COVID-19, including but not restricted to, an assessment of the group's infrastructure, staff availability and logistical arrangements. Management has concluded that any operational pressures caused directly by the COVID-19 situation are unlikely to have a material impact on the company. On this basis the directors consider it appropriate to prepare these financial statements on a going concern basis.
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.
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
.
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 4 -
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 2021
1
Accounting policies
(Continued)
- 5 -
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.
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.
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 6 -
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.
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.
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 7 -
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.
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.
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.
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 8 -
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Total
126
117
4
Intangible fixed assets
Other
£
Cost
At 1 April 2020 and 31 March 2021
462,895
Amortisation and impairment
At 1 April 2020
415,163
Amortisation charged for the year
34,590
At 31 March 2021
449,753
Carrying amount
At 31 March 2021
13,142
At 31 March 2020
47,732
5
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 April 2020
707,721
Additions
291,841
At 31 March 2021
999,562
Depreciation and impairment
At 1 April 2020
393,296
Depreciation charged in the year
160,131
At 31 March 2021
553,427
Carrying amount
At 31 March 2021
446,135
At 31 March 2020
314,425
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 9 -
6
Fixed asset investments
2021
2020
£
£
Shares in group undertakings and participating interests
1,206,000
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 April 2020
-
Additions
1,206,000
At 31 March 2021
1,206,000
Carrying amount
At 31 March 2021
1,206,000
At 31 March 2020
-
Additions in the year relation to the purchase by the Company of Lucid Publishing Limited on 5 October 2020.
7
Debtors
2021
2020
(as restated)
Amounts falling due within one year:
£
£
Corporation tax recoverable
265,748
Amounts owed by group undertakings
2,427,049
1,662,723
Other debtors
2,528,234
1,967,876
5,221,031
3,630,599
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 10 -
8
Creditors: amounts falling due within one year
2021
2020
(as restated)
£
£
Trade creditors
320,452
450,367
Amounts owed to group undertakings
1,451,803
251,803
Taxation and social security
310,955
309,659
Other creditors
1,897,322
236,592
3,980,532
1,248,421
9
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was unqualified.
The senior statutory auditor was Andrew Moss BA FCA and the auditor was DSG.
10
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2021
2020
£
£
634,522
956,882
11
Related party transactions
LUCID GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
11
Related party transactions
(Continued)
- 11 -
During the year the company entered into a contract with a related party which generated revenue of £739,903 (2020: £nil). The company is deemed a related party due to common directors.
Recharges to related parties, due to common directors and shareholders was £27,334 (2020: £50,768).
During the year the company incurred costs of £620,000 (2020: £550,000) 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 (2020: £1,531,224). The companies are deemed to be related parties due to common directors and shareholders.
There was a directors loan of £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 £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.
12
Prior year restatement
In the previous year the company took advantage of the audit exemption under s477 of the Companies Act. As part of the 2021 audit, opening balance review was undertaken of 2020 and the following adjustments have been made to the accounts:
- Sales has been increased by £1m to reflect the reversal of an impairment journal relating to Lucid Publishing Ltd which was recorded via intercompany in 2020;
- Consultancy costs of £506,728 have been reclassified from administrative costs to cost of sales; and
- Consultancy and outsourcing costs were increased by £180,537 due to understatement of accrual in 2020.
The profit and loss and balance sheet along with any corresponding notes in the financial statements have been updated accordingly. The overall impact of the above amendments was to increase underlying profit by £819,463.
13
Parent company
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.