The directors present the strategic report for the period ended 30 June 2025.

Cirrus Development Limited (the "Company") is engaged in the development of video games for third party publishers.

The Company has performed satisfactorily in the period to 30 June 2025 and this has continued since the balance sheet date.

Despite global macro-economic pressures impacting technology industries and the gaming sector, and a recent plateau in the global video games market following significant growth during the pandemic, the number of players continues to increase year on year, with major new title launches performing strongly and mobile gaming continuing to generate significant users and revenues. The directors expect that this underlying growth in the videogames market will continue in the long-term.

The Company continues to be well placed to take advantage of the growing player base and continuing demand for high quality services and content.

Governance and risk management framework

The Company's immediate parent undertaking is Sumo Digital Limited. The Board of the ultimate UK parent undertaking, Sumo Group Limited, is responsible for the Company's risk management and for ensuring that robust processes are in place to identify, manage and report risks that threaten the business objectives of the Company. These include Financial, Operational and Regulatory Compliance risks. The principal feature of the Company's risk management regime is a strong control environment, which is founded on appropriate organisational structure for planning, executing, controlling, and monitoring business operations. It includes clearly defined responsibilities and accountabilities.

Controls procedures

The Company seeks to continuously review and improve policies and procedures and the control framework in place. Investment is being made into the automation of key financial and resourcing processes.

Other control procedures include: budgetary systems and management controls to manage financial risk, timely and accurate management information in respect of key performance measures; and procedures to ensure complete and accurate accounting, which are regularly reviewed by the Board.

The principal risks and uncertainties are:

Talent

The continuing operations of Sumo Group Limited and its subsidiaries (the "Group") is dependent on recruiting and retaining talented people in the long-term, thus recruitment and retention of key staff is considered a principal risk. An inability to do so could potentially impact the Company’s borrowing of staff from the Group and so is also a principal risk to the Company.

In January 2025 the Group announced restructuring, including a refocus of the Group’s efforts on its core development services capabilities. During the period, the Group divested some studios and has made further headcount reductions, primarily across its central services and overhead teams as well as across its remaining studios. The impact of studio disposals and restructuring has resulted in an overall headcount reduction for the Group of approximately 36%.

Despite this, the Group remains well placed to deliver the resources required to support the staffing needs of the Company through existing resources.

Industry risk

The global video games sector faces challenges with a number of studio closures and layoffs across the industry in recent periods. This increases the risk to the Company of contract cancellations and non-renewals.

The Company continues to borrow staff from the Group as required in order to deliver on its development contracts, allowing the Company to balance its cost base to mitigate any contract changes.

Customers

The risk of project cancellation and customer confidence is managed by providing high quality products on time and to customer specifications. Projects are managed through milestones and progress against these is reported to the operating board on a monthly basis and weekly at project level.

IT security and stability

A breach of IT security, unauthorised copying or software piracy could result in loss of business and reputational damage for the Company, as well as associated negative financial impacts to revenue and costs. Due to the Company's high dependence on its IT systems and infrastructure, any failure, disruption or damage to the network or systems could lead to significant business interruption. Disruption and inability to conduct "business as usual" could lead to reputational damage, financial losses and the inability of the Company to generate revenues going forward. Project work is protected by copy protection technology and robust security testing, including penetration testing, and disaster recovery plans are in place. The Group has an experienced and dedicated IT team, and uses external consultants where needed, to ensure a good balance of skills and experience in the team.

On behalf of the board

The directors present their annual report and audited financial statements for the period ended 30 June 2025.

The principal activity of the company is to undertake development activities for video gaming projects.

The results for the period are set out on page 8.

Ordinary dividends were settled amounting to £5,000,000 (December 2024: £15,000,000). The directors do not recommend payment of a final dividend.

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

The auditor, Saffery LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

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;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• 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.

We have audited the financial statements of Cirrus Development Limited (the 'company') for the period ended 30 June 2025 which comprise the statement of comprehensive income, the statement of financial position, 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 101 Reduced Disclosure Framework (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 30 June 2025 and of its profit for the period then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice including FRS 101; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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.

Other information

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. 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 directors' report for the financial period 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.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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.

As explained more fully in the directors' responsibilities statement set out on page 4, 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.

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 directors, 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 directors 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, specifically legislation relating to creative industry tax credits.

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. We have reviewed management's assessment of how the company, and production, comply with the relevant laws and regulations governing access to the creative industry tax credits.

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.

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.

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

Cirrus Development Limited is a private company limited by shares incorporated in England and Wales. The registered office is 32 Jessops Riverside, Brightside Lane, Sheffield, South Yorkshire, S9 2RX. The company's principal activities and nature of its operations are disclosed in the directors' report.

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

The financial statements are prepared in British pounds sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.

The company has taken advantage of the following disclosure exemptions under FRS 101:

• the requirements of IFRS 7 Financial Instruments: Disclosures;

• the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;

• the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 40A to 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements;

• the requirements of IAS 7 Statement of Cash Flows;

• the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;

• the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures; and

• the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

The financial statements of the company are consolidated in the financial statements of Sumo Group Limited. These consolidated financial statements are available from its registered office, 32 Jessops Riverside, Brightside Lane, Sheffield, England, S9 2RX.

At the balance sheet date the company had net current assets of £true2,930,329 (31 December 2024: £6,073,452). The company continues to be supported by its parent who will ensure there are sufficient funds available to meet its obligations as they fall due for payment. On this basis, the accounts have been prepared on a going concern basis.

Revenue arises from the provision of game development services. To determine whether to recognise revenue, the company follows a 5-step process as follows:

1. Identifying the contract with a customer

2. Identifying the performance obligations

3. Determining the transaction price

4. Allocating the transaction price to the performance obligations

5. Recognising revenue when/as performance obligation(s) are satisfied

Revenue is measured at transaction price, stated net of VAT and other sales related taxes.

Revenue is generally recognised over time as the company satisfies performance obligations by transferring the promised services to its customers. The transaction price is set out in the contracts and is generally the development fee or guaranteed royalty to be received. It is recognised as the development activity takes place over time.

IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The company is exempt under FRS 101 from the disclosure requirements of IFRS 13. There was no impact on the company from the adoption of IFRS 13.

Cash and cash equivalents 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.

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax charge, disclosed as noted below, represents the sum of the tax currently recoverable and deferred tax.

The tax currently recoverable is based on relievable losses arising in the period as the result of video games tax relief legislation. Relievable losses differ from net losses as reported in the income statement because they include an additional deduction relating to qualifying video game development expenditure and exclude items of income or expense that are taxable or deductible in other periods, as well as items that are never taxable or deductible. The company’s tax position is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Video games tax credits have only been recognised where management believe that the tax credit will be recoverable based on their experience of obtaining the relevant certification and the success of similar historical claims in the wider group. Such credits are recognised in the statement of comprehensive income within Video Games Tax Relief in order to reflect the substance of these credits to the company.

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.

Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received. Government grants related to production costs are recognised in the statement of comprehensive income within Video Games Tax Relief over the periods in which the related production costs are incurred and for which the grant is intended to compensate.

Transactions in currencies other than British 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.

Reporting period

The Company has shortened its accounting period from 31 December 2025 to 30 June 2025. The previous period was also a 6-month period, and therefore the comparative amounts presented are comparable.

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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

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:

The key accounting estimate within the financial statements for this company is the valuation of the video games tax relief available. The estimate is based on the assessment of the value of qualifying expenditure as per HMRC legislation and guidance plus assessment of the qualification of the underlying game as eligible for the tax relief.

The average monthly number of persons (including directors) employed by the Company during the period was nil (period ending 31 December 2024 - nil).

The charge for the period can be reconciled to the profit per the income statement as follows:

Income tax expenses

The Company only recognizes deferred income tax assets for unused cumulative tax losses if it is probable that future taxable profits will be available to utilize those tax losses. As at 30 June 2025, the Company did not recognize deferred income tax assets of £2,935,955 (31 December 2024: £2,898,345) in respect of unused cumulative tax losses amounting to £11,743,819 (31 December 2024: £11,593,378).

During the period, a government grant in relation to the video games tax credit of £2,350,579 (31 December 2024: £1,838,055) was receivable with respect to the costs of production for the video games the Company had developed in the period. The related production costs are included within cost of sales.

Amounts owed by fellow group undertakings represent amounts due from the direct parent company.

The company has taken advantage of the exemption under FRS 101 from disclosing transactions entered into between two or more members of the group, where any subsidiary undertaking which is a party to the transaction is wholly owned by a member of that group.

The company's immediate parent undertaking is Sumo Digital Limited.

The ultimate parent undertaking is Tencent Holdings Limited, through its indirect wholly owned subsidiary, Sixjoy Hong Kong Limited.

The directors consider there to be no ultimate controlling party during the period.