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Registered number: 11956982
MODERN WOLF LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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CONTENTS
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Statement of changes in equity
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Notes to the financial statements
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COMPANY INFORMATION
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167 - 169 Great Portland Street
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Blick Rothenberg Audit LLP
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Chartered Accountants & Statutory Auditor
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REGISTERED NUMBER:11956982
MODERN WOLF LIMITED
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BALANCE SHEET
AS AT 31 MARCH 2025
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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REGISTERED NUMBER:11956982
MODERN WOLF LIMITED
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BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2025
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The company has opted not to file the profit and loss account in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 8 October 2026.
The notes on pages 5 to 17 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2025
At 31 March 2024 and 1 April 2024
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The notes on pages 5 to 17 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Modern Wolf Limited is a private company limited by shares incorporated in England and Wales. The address of its registered office is 167 - 169 Great Portland Street, London, England, W1W 5PF.
The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. 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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Exemption from preparing consolidated financial statements
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The company, and the Group headed by it, qualify as small as set out in section 383 of the Companies Act 2006 and the parent and Group are considered eligible for the exemption to prepare consolidated accounts.
The company has made a loss in the current year of £1,218,548 (2024: £2,532,060) and has net liabilities of £12,042,396 (2024: £10,823,848) at the balance sheet date. Therefore, the company is reliant on financial support from its ultimate parent company, Wedgwood FIC Limited, which itself is reliant upon the support of its beneficial owner, who has provided a letter of support to Modern Wolf Limited confirming it will provide financial support to the company for a period of at least 12 months from the approval of these financial statements. There are short-term pressures on group cash flows and should the ultimate beneficial owner not provide support to the group, then these circumstances would indicate the existence of a material uncertainty that may cast doubt over the ability of the company to continue as a going concern.
After having made enquiries with the ultimate beneficial owner, the directors have a reasonable expectation that the parent company will continue to be able to provide financial support to the company based on the support of the ultimate beneficial owner. Accordingly, the directors have adopted the going concern basis in preparing the financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
Revenue of the company consists of recharges made to group undertakings and game royalty income. For recharges, revenue is recognised as the costs to which the recharges relate are incurred, as this is the point at which the company's performance obligation is satisfied.
Revenue from sales-based game royalty income, promised in exchange for a licence of the intellectual property, is recognised after the launch of the product, when the relevant sales occur.
Revenue is recognised at the transaction price that is allocated to the performance obligation, being the consideration that is expected to be received.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
The intangible assets in relation to game development are amortised over two years from the date of game launch, beyond the two years, any additions capitalised are amortised in full with no extension of their estimated useful life.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.
Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument.
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.
Financial assets
Basic financial assets, including other debtors, cash and bank balances, and intercompany balances are initially recognised at transaction price, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.
Financial liabilities
Basic financial liabilities, including trade and other creditors, bank loans and intercompany balances 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 payments discounted at a market rate of interest for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
Impairment of financial assets
Financial assets measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
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 and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
Ordinary shares are classified as equity.
Interest income is recognised in profit or loss using the effective interest method.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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Operating leases: the company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
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Foreign currency translation
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Functional and presentation currency
The company's functional and presentational currency is Sterling.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses are presented in profit or loss within 'administrative expenses'.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
Current tax is the amount of income tax payable in respect of taxable profit for the year or prior years and is recognised in the profit and loss account. Video Games Tax Relief is recognised when the Company has established entitlement to relief and the amount recoverable can be measured reliably.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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Judgements in applying accounting policies and key sources of estimation uncertainty
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Impairment of investments
The company determines whether the investment is impaired when indicators of impairment exist or based on the annual impairment assessment. The annual assessment requires an estimate of the recoverable amount by reference to the value in use of the subsidiary undertaking.
Value in use is based on forecasted future cash flows generated by the subsidiary. These cash flows have not been discounted based on management's assessment of this being immaterial. The investment was fully impaired at 31 March 2024 and was derecognised during the current year following the dissolution of the subsidiary. No further impairment loss or disposal gain/loss arose in 2025.
Capitalisation of development expenditure
Management has to make judgements as to whether development expenditure has met the criteria for capitalisation or whether it should be expensed in the year. Development expenditure is capitalised only after its reliable measurement, technical feasibility and commercial viability can be demonstrated.
Impairment of capitalised development expenditure
Intangible assets are amortised over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances suggest that their carrying value may not be recoverable. The recoverable amount is determined based on value in use, calculated using forecasted cash flows. These cash flows have not been discounted due to the short term nature of the assets. Based on this assessment, an impairment adjustment of £246,689 was recognised as at 31 March 2025. (2024: none).
Determining the appropriate amortisation period requires management judgement to ensure that the estimated useful economic life of a game reflects the expected period of customer demand. Amortisation and impairment charges relating to development costs are presented within research and development expenses, in line with common industry practice.
Impairment of debtors
Management reviews debtors for indicators of impairment and estimates the recoverable amount based on the contractual terms and expected future cash flows. No impairment loss has been recognised for the year ended 31 March 2025 (2024: £196,746). Further details are provided in note 10.
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The average monthly number of employees, including directors, during the year was 10 (2024 - 14).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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The current tax charge includes corporation tax in respect of VGTR claims of £Nil (2024: £120,915).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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Investments in subsidiary companies
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Impairment
At 1 April 2024
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The investment in the wholly owned subsidiary, Modern Wolf Development Limited, was disposed of in the year after being fully impaired by £240,001 in the prior year, following the decision to wind down its operations.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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Prepayments and accrued income
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At 31 March 2024, other debtors included £69,674 representing the residual carrying amount of proceeds receivable from the disposal of an intangible asset, after an impairment charge of £196,746 recognised in 2024. During the year ended 31 March 2025, the remaining £69,674 was written off when recovery was no longer considered probable.
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Creditors: amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free, have no fixed repayment date and are repayable on demand.
At 31 March 2025, the Company owed £204,207 to its subsidiary, Modern Wolf Development Limited. The subsidiary was wound up during the year and, accordingly, the intercompany creditor balance was released and written back in full. The resulting credit of £204,207 has been recognised in the profit and loss account for the year ended 31 March 2025.
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Creditors: amounts falling due after more than one year
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The bank loan is payable in quarterly installments commencing 12 months from the date the loan is drawn, and it is due to be fully repaid by July 2026. Interest is applied monthly at a rate of 2.5% per annum, with the government paying the interest during the first 12 months.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Allotted, called up and fully paid
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10,000 (2024 - 10,000) ordinary shares of £1.00 each
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Related party transactions
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The company has taken advantage of the exemption contained in FRS 102 Section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of the group.
During the year the company had supplier payments settled by an entity under common control of £204,468 (2024: £Nil). The full amount of £204,468 (2024: £Nil) is owed at year end.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
The company's immediate parent undertaking is Supernova Capital Two Limited, a private company limited by shares incorporated in England and Wales.
The ultimate parent company for which consolidated financial statements are drawn up is Wedgwood FIC Limited, whose registered office address is 167-169 Great Portland Street, London, England, W1W 5PF. Copies of the consolidated financial statements are available to the public from Companies House, Crown Way, Cardiff, CF14 3UZ.
The auditor's report on the financial statements for the year ended 31 March 2025 was unqualified.
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In their report, the auditor emphasised the following matter without qualifying their report:
Material uncertainty relating to going concern
We draw attention to Note 2.3 of the financial statements, which indicates that the directors have a easonable expectation that the ultimate parent company and beneficial owner will continue to be able to provide financial support to the company. However, if they are unable to provide financial support to the company, this would indicate the existence of a material uncertainty, which may cast doubt over the ability of the company to continue as a going concern. Our opinion is not modified in respect of this matter.
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. Our evaluation of the directors' assessment of the company's ability to continue to adopt the going concern basis of accounting included
reviewing post year end management accounts and forecasts.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in
the relevant sections of the report.
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The audit report was signed on 9 October 2026 by Marc Levy FCA (senior statutory auditor) on behalf of Blick Rothenberg Audit LLP.
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