190518040SAR-1_FCC_SAR_Appendix_A

FCC ID: XAM500079GR01

RF Exposure Info

Download: PDF

FCCID_4462022

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Balance Sheet
at 31 March 2018

Note 31 March 2018 1 April 2017
£000 £000 £000 £000
Fixed assets
Intangible assets 74 58
Tangible assets 4;812 5,334

4,886 5.392
Current assets
Debiors, Including £2,820,000 (2077 £4,867,000) 12 46,139 41,652
due after more than one year (Deferred Tax)
Cash at bank and in hand 10 375

46,149 42,027
Creditors: amounts falling due within one year 13 (24,565) — (16.871)

21,584 25,156
Net current assets

‘Total assets less current liabilities 26,470 30,548

Provisions for liabilities
Other provisions 15 (1,154) (1,136)
(1,154) (1,136)

Net assets 25,316 29,412

‘Capital and reserves
Called up share capital 16 10 10
Profit and loss account 25,306 29,402

Shareholder‘s funds 25,316 29,412

These financial statements wereapproved by the board of directors on 02 May 2019 and were signed onits behalf by:

CMbn
Derek Wai Seng Chan
Director

ACompany registered number: 2057591

The notes on pages 13 to 28 form part of these financial statements.

11

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Statement of Changes in Equity Called up Share Profit ‘Total
share premium and loss equit
capital account account quity
£000 £000 £000 £000

Balance at 2 April 2016 10 34,396 13,957 48,363
Total comprehensive income for the period
Profit — 1,303 1,303
Other comprehensive income

Total comprehensive income for the period — 1,303 1,303

Equity—settled share based payment transactions — 4,842 4,842
Deferred tax movement recorded directly in equity — (96) (96)
Conversion of share premium (34,396) 34,396 —
Dividends — (25,000) (25,000)

Total contributions by and distributions to owners (34,396) 14,142 (20,254)

Balance at 1 April 2017 10 = 29,402 29,412

Total comprehensive loss for the period
Loss — (10,036) (10,036)
Other comprehensive income

Total comprehensive income for the period = (10,036) (10,036)

Equity—settled share based payment transactions = 5,402 5,402
Current tax movement recorded directly in equity — 737 737
Deferred tax movement recorded directly in equity — (199) (199)

Total contributions by and distributions to owners — 5,940 5,940

Balance at 31 March 2018 10 — 25,306 25,316

The notes on pages 13 to 28 form part of these financial statements.

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes
(forming part of thefinancial statements)

1 Accounting policies
Electronic Arts Limited (the "Company") is a private company incorporated, domiciled and registered in England in the
UK. The registered number is 2057591 and the registered office is Onslow House, Onslow Street, Guildford, Surrey, GU 1
4TN.
The Company is exempt by virtue of section 401 of the Companies Act 2006 from the requirement to prepare group
financial statements. These financial statements presentinformation about the Company as an individual undertaking and
not about its group.
The Company‘s ultimate parent undertaking, Electronic Arts Inc., includes the Company in its consolidated financial
statements. The consolidated financial statements of Electronic Arts Inc., are prepared in accordance with US Financial
Reporting Standards and are available to the public and may be obtained from 209 Redwood Shores Parkway, Redwood
City, CA 94065.
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure
Framework ("FRS 101").
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements
of International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"), but makes amendments where
necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure
exemptions has been taken:
e a Cash Flow Statement and related notes;
e Disclosures in respect of transactions with wholly owned subsidiaries;
* Disclosures in respect of capital management;
e The effects of new but not yet effective IFRSs;

e Disclosures in respect of the compensation of Key Management Personnel; and
e Disclosures of transactions with a management entity that provides key management personnel services to the
company.
As the consolidated financial statements of Electronic Arts Inc., include the equivalent disclosures, the Company has also
taken the exemptions under FRS 101 available in respect of the following disclosures:
e IFRS 2 Share Based Payments in respect of group settled share based payments
e Certain disclosures required by IAS 36 /Impairment ofassets in respect of the impairment of goodwill and indefinite
life intangible assets;
e Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial
Instrument Disclosures.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in
these financial statements.
No judgements have been made by the directors, in the application of these accounting policies that have significant effect
on the financial statements and estimates which would have a significant risk of material adjustment in the next year
statements.

1.1 Measurement convention

The financial statements are prepared on the histo,rical cost basis except that the following assets and liabilities are stated
at their fair value: liabilities for cash—settled share—based payments.
1.2 Going concern
The company had net current assets of £21,584,000 as at 31 March 2018 (01 April 2017: £25,156,000). The company‘s
directors therefore have a reasonable expectation that the company has adequate resources to continue in operational
existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the
financial statements.
13

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)
1 Accounting policies (continued)
1.3 Foreign currency
Transactions in foreign currencies are translated to the Company‘s functional currencies at the foreign exchange rate
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet
date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Non—monetary assets and
liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the
date of the transaction. Non—monetary assets and liabilities denominated in foreign currencies that are stated at fair value
are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined.
Foreign exchange differences arising on translation are recognised in the profit and loss account.
1.4 Non—derivativefinancial instruments
Non—derivative financial instruments comprise investments in equity and debt securities, trade and other debtors, cash
and cash equivalents, loans and borrowings, and trade and other creditors.
Trade and other debtors

Trade and other debtors are recognised initially at fair value. Subsequent to initial recognition they are medsuled at
amortised cost using the effective interest method, less any impairment losses.
. Trade and other creditors
Trade and other creditors are recognised initially at fair value. Subsequent to initial recognition they are measured at
amortised cost using the effective interest method.
Investments in debt and equity securities
Investments in subsidiaries are carried at cost less impairment.
1.5 Tangiblefixed assets -
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses.
Where parts of an item of tangible fixed assets have different useful lives, they are accounted for as separate items of
tangible fixed assets.
Leases in which the Company assumes substantially all the risks and rewards of ownership of the leased asset are
classified as finance leases. Leased assets acquired by way of finance lease are stated at an amount equal to the lower of
their fair value and the present value of the minimum lease payments at inception. of the lease, less accumulated
depreciation and less accumulated impairment losses. Lease payments are accounted for asdescribed below.
Depreciation is charged to the profit and loss account on a straight—line basis over the estimated useful lives of each part
of an item of tangible fixed assets. Land is not depreciated. Depreciation starts the month after an asset is placed in service.
The estimated useful lives are as follows:
e Leasehold improvement : Shorter of lease term and life

e Office and computer equipment: 3—5 years

Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.
1.6 Intangible assets, goodwill and negative goodwill
Goodwill
Goodwill is stated at cost less any accumulated impairment losses. It is not amortised but is tested annually for
impairment. This is not in accordance with The Large and Medium—sized Companies and Groups (Accounts and
Reports) Regulations 2008 which requires that all goodwill be amortised. The directors consider that this would fail to
give a true and fair view of the profit for the year and that the economic measure of performance in any period is
properly made by reference only to any impairment that may have arisen. It is not practicable to quantify the effect on
the financial statements of this departure.

14

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes(continued)
1:6 Intangible assets, goodwill and negative goodwill (continued)
Research and development

Expenditure on research activities is recognised in the profit and loss account as an expense as incurred.
Expenditure on development activities is capitalised if the product or process is technically and commercially feasible
and the Company intends and has the technical ability and sufficient resources to complete development, future economic
benefits are probable and if the Company can measure reliably the expenditure attributable to the intangible asset during
its development. Development activities involve a plan or design for the production of. new or substantially improved
products or processes. The expenditure capitalised includes the cost of materials, direct labour and an appropriate
proportion of overheads and capitalised borrowing costs. Other development expenditure is recognised in the profit and
loss account as an expense as incurred. Capitalised development expenditure is stated at cnast less accumulated
amortisation and less accumulatedimpairment losses.
The company does not own the Intellectual Property (IP) related to developmentactivities undertaken during the periods
and hence no saleable asset is created. As such there is no future economic benefits to the company, and all development
costs are expensed as incurred. '
Other intangible assets
Other intangible assets that are acquired by the Company are stated at cost less accumulated amortisation and less
accumulated impairment losses.
The cost of an intangible asset acquired in a business combination is its fair value at the acquisition date.
Amortisation

Amortisation is charged to the profit and loss account on a straight—line basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically
tested for impairment at each balance sheet date. Othér intangible assets are amortised from the month following the date
they are available for use. The estimated useful lives are as follows:
* Computer software: 3—4 years

1.7 Government grants

Government grants, in the form of Video Games tax relief (VGTR)and R&D expenditure credit (RDEC), are presented
as deductions from the related expenses.

1.8 Impairment excluding deferred tax assets
Financial assets (including trade and other debtors)
e A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine
whether there is objective evidence that it is impaired; A financial asset isimpaired if objective evidence indicates
that a loss event has occurred after the initial recognition of the asset, andthat the loss event had a negative effect
on the estimated future cash flows of that asset that can be estimated reliably.

e An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount and the present value of the estimated future cash flows discounted at the asset‘s
original effective interest rate. For financial instruments measured at cost less impairment an impairment is
calculated as the differencé between its carrying amount and the best éstimate of the amount that the Company
would receive for the asset if it were to be sold at the reporting date. Interest.on the impaired asset continues to
be recognised through the unwinding ofthe discount. When a subsequent event causes the amount of impairment
loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)
1 Accounting policies (continued)
1.8 Impairment excluding deferred tax assets (continued)
Non—financial assets
The carrying amounts of the Company‘s non—financial assets, other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset‘s recoverable
amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for
use, the recoverable amount is estimated each year at the same time.
The recoverable amount of an asset is the greater ofits value in use and its fair value less costs to sell. 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.
An impairment loss is recognised if the carrying amount ofan asset exceeds its estimated recoverable amount. Impairment
losses are recognised in profit or loss.
An impairment loss in respect of goodwill is reversed if and only if the reasons for the impairment have ceased to apply.
In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in
the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset‘s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.

1.9 Employee benefits
Defined contribution plans
A defined contribution plan is a post—employment benefit plan under which the company pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to
defined contribution pension plans are recognised as an expensein the profit and loss account in the periods during which
services are rendered by employees.
Short—term benefits
Short—term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided. A liability is recognised for the amount expected to be paid under short—term cash bonus or profit—sharing
plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated reliably.
Termination benefits
Termination benefits are recognised as an expense when the Company is demonstrably committed, without realistic
possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or
to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for
voluntary redundancies are recognised as an expense if the company has made an offer of voluntary redundancy, it is
probably that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable
more than 12 months after the reporting date, then they are discounted to their present value.
Share—based payment transactions
Share—based payment arrangements in which the Company receives goods or services as consideration for its own equity
instruments are accounted for as equity—settled share—based payment transactions, regardless of how the equity
instruments are obtained by the Company.
The grant date fair value of share—based payments awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the
awards, The fair value of the awards granted is measured using an option valuation model, taking into account the terms
and conditions upon which the awards were granted. The amount recognised as an expense is adjusted to reflect the actual
number of awards for which the related service and non—market vesting conditions are expected to be met, such that the
amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non—
market performance conditions at the vesting date. For share—based payment awards with non—vesting conditions, the grant
date fair value of the share—based payment is measured to reflect such conditions and there is no true—up for differences
between expected and actual outcomes.

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)
1 Accounting policies (continued)
1.9 Employee benefits (continued)
Share—based payment transactions (continued)
Share—based payment transactions in which the Company receives goods or services by incurring a liability to transfer
cash or otherassets that is based on the price ofthe Company‘s equity instruments are accounted for as cash—settled share—
based payments. The fair value of the amount payable to employees is recognised as an expense, with a corresponding
increase in liabilities, over the period in which the employees become unconditionally entitled to payment. The liability
is remeasured at each balance sheet date and at settlement date. Any changes in the fair value of the liability are recognised
as personnel expense in profit or loss. °
The Company took advantage of the option available in IFRS 1 to apply IFRS 2 only to equity instruments that were
granted after 7 November 2002 and that had not vested by 29 March 2014. Where the Company grants rights to its parent‘s
equity instruments to its employees the Company accounts for these share—based payments as cash—settled.
1.10 Provisions

A provision is recognised in the balance sheet when the Company has a present legal or constructive obligation as ‘a result
of a past event, that can be reliably measured andit is probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre—tax rate that reflects
risks specific to the liability.
1.11 Turnover

Turnover is principally derived from the sale of packaged interactive software games designed for play on video game
consoles, personal computers, hand held games machines or the licensing of software games designed for play on mobile
phones and internet enabled hand held devices.
Revenue is recognised upon delivery to the end customer, i.ec. when title and risk of loss are transferred. In order to
recognise reventue, Electronic Arts Limited must not have any continuing obligations and it must also be probable that
the amounts receivable will be collected.
The company, in common with other companies in the electronic games industry, has arrangements with its distributors,
which allow for the exchange of products under certain cireumstances. Price protection may also be offered for both
personal computer and video games systems products. Provision is made for anticipated credits arising from these
arrangements and is calculated by reference to estimated distributor stock holdings at the balance sheet date, the rate of
stock sell—through in the channel, past experience and situations of whitch management is aware. Revenue is recognised
net of these allowances and excluding value added tax.
Additional turnover is derived from intercompany services provided for administration, marketing and research &
development.
1.12 Expenses

Operating lease payments
Payments (excluding costs for services and insurance) made under operating leases are recognised in the profit and loss
account on a straight—line basis over the term of the lease. Lease incentives received are recognised in the profit and loss
account as an integral part.of the total lease expéense.
Interest receivable and Interest payable
Interest payable and similar charges include interest payable, finance charges on shares classified as liabilities and finance
leases recognised in profit or loss using the effective interest method, unwinding of the discount on provisions, and net
foreign exchange losses that are recognised in the profit and loss account (see foreign currency accounting policy).
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a
substantial time to be prepared for use, are capitalised as part of the cost of that asset. Other interest receivable and similar
income include interest receivable on funds invested and net foreign exchange gains.
Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method.
Dividend income is recognised in the profit and loss account on the date the entity‘s right to receive payments is
established. Foreign currency gains and losses are reported on a net basis.

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)
1 Accounting policies (continued
1.13 Taxation
Tax on the profit or loss for the year comprises current and deferredtax. Tax is recognised in the profit and loss account
except to the extent that it relates to items recognised directly in equity or. other comprehensive income, in which case it
is recognised directly in equity or other.comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided, without discounting, on temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not
provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting
nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent
that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively
enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilised.

2 Turnover

_ Period ended Period ended
31 March 1 Aprit
2018 2017
£000 £000
By activity:
Sale ofgoods 126,581 161,051
Rendering of services 52,322 49,908

Total turnover 178,903 210,959

By geographical market:
UK 125,402 155,225
Rest of the World 53,501 55,734

Total turnover 178,903 210,959

3 Expenses and auditor‘s remuneration
Period ended Period ended
31 March 1 April
2018 2017
Included in profit/loss are thefollowing: £000 £000

Depreciation and other amounts written off tangible assets — owned 1,816 1,349
Amortisation ofintangible fixed assets 120 29
Hire of plant and machinery — rentals payable under operating leases 123 132
Hire of other assets — rentals payable under operating leases 1,554 1,585
Research and development expensed as incurred 15,336 13,216

Auditor‘s remuneration:

Audit ofthese financial statements 137 148

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)

4 Staff numbers and costs
The average number of persons emp]oyed by the Company (including directors) during the year, analysed by category,
was as follows:
Number of employees
Period ended Period ended
31 March 1 April
2018 2017

Corporate administration 106 114
Publishing, saies, development 190 173
and operations

296 287

The aggregate payroll costs of these persons were as follows:
Period ended Period ended
31 March 1 April
2018 2017
£000 +£000

Wages and salaries 19,615 18,749
Share based payments (see note 17) 5,403 4,84 1
Social security costs 2,902 2,579
Contributions to defined contribution plans (see note 17) 1,953 1,857

29,873 28,026

5 Directors‘ remuneration

Period ended Period ended
31 March 1 April
2018 2017
£000 £000

Directors‘ remuneration 803 760
Company contributions to defined contributions plans 31 22

834 782

The aggregate of remuneration and amountsreceivable under long term incentive schemes of the highest paid
director was £335,458 (2017: £482,626), and company pensioncontributions of £12,766 (2017: £8,988) were made
to a money purchase scheme on his behalf. During the year, the highest paid director exercised share options and
received shares—under a—long term incentive scheme.

Electronic Arts Limited
Annual report andfinancial statements
52 week period énded 31 March 2018

Notes (continued)

5 Directors‘ remuneration (continued)

Number of directors
Period ended Period ended
31 March 1 April
2018 2017

Retirement benefits are accruing to the following number of directors under:.
Money purchase schemes 0 2

The number of directors who exercised share options was 0 2

During the year, services performed for the Company by K Kallweit and J Schatz were deemed inconsequential.
As such, no remuneration was paid in respect of qualifying services performed for the Company asdirectors (2017:
£nil).

6 Other interest receivable and similar income

Period ended Period endéd
31 March 1 April
2018 2017
£000 £000

On bank deposits and group undertakings 122 108
Other interest receivable 7 &

Total interest receivable and similar income . _ 129 108

7 Interest payable and similar charges

Period ended Period ended
31 March 1 April
2018 2017
£000 £000

Other interest payable 768
Unwind of discount on provisions 18 17

Fotal other interest payable and similar charges 786 17

OtherInterest payable for period represents £768,000 (2017: £nil) relating to a provision for—interest on a tax audit
with HMRC. The Company agreed the closure of this audit in February 2019.

20

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)

8 Taxation

Recognised in the profit and loss account
Period ended 31 March ‘Period ended 1 April 2017
2018
£000 £000 £000 £000
UK corporation tax ,
Current tax on income for the period. 1,257 0
Adjustments in respect of prior periods 5,589 (1)

6,846 (1)
Foreign tax.
Current tax on incomé for the period 0 — —

Total current tax 6,846 (1)

Deferred tax.(see note 14)
Origination and reversal of temporary differences 10. (840)
Reduction in.tax rate = 128
Research and development tax credit (124) =
Recognition ofpreviously unrecognised tax losses — 30
Adjustments in respect of prior periods 1,963 —

Total deferredtax 1,848 (682)

Tax 8,694 (683)

Tax recognised directly in equity (i.e., not in comprehensive income)

Current tax recognised directly in equity 137 —

Deferred tax—recognised directly in equity (199) (96)

Reconciliation of tax expense
Period ended Period ended
31 March 1 April
2018 2017
£000 £000

(Loss) / profit for the year (10,036) 1,303
Total tax expense / (Gredity 8,694 (683)

(Loss) / profit excluding taxation (1,342) 620

Tax using the UK. corporation tax rate of 19—% (2017:20%) (255) 124
Reduction in tax rate on deferred tax balance 130 218
Non—deductible expenses 1,262 (994)
Tax exempt revenues — —
Video games tax credit 5 —
Under / (over) provided in prior years — current tax 5,589 (1)
Under / (over) provided in prior years —déferred tax 1,963 (30)

Total tax expense / (credit) .8,694 (683)

21

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)

8 Taxation (Continued)

A reduction in the UK corporation tax rate from 21% to 20% (effective from 1 April 2015) was substantively enacted on
2 July 2013. Further reductions to 19% (effective from 1 Aprii 2017) and to 18% (effective 1 April 2020) were
substantively enacted 26 October 2015, and an additional reduction to 17% (effective 1 April 2020) was substantively
enacted on 6 September 2016. This will reduce the company‘s future current tax charge accordingly. The deferred tax
asset at 31 March 2018 has been calculated based onthese rates.

In February 2019, the Company agreed the closure ofan ongoing tax audit with HMRC. The total tax liability arising
from prior period settlement is recognized in the current financial statements period ended 31 March 2018 and included
as adjustments in respect of prior periods to current and deferred tax expense of £5,589,000 and £1,963,000, respectively.
Following recognition of previously unrecognized deferred tax assets, utilization of operating losses and allowances, as
well as usage of historical prepayments and settlement of amounts receivable from research & development and video
games tax credits, a further cash payment to HMRC of £2 million was required for settlement. This tax liability is included
in the amount due from taxation of £2,398,000 (note 13).

9 Intangible assets
Computer
Goodwill Software Total
£000 £000 £000
Cost .
Balance at 1 April 2017 19,591 1,606 21,197
Additions = 136 136
Disposals — (1,543) (1,543)

Balance at 31 March 2018 19,591 . 199 19,790

Amortisation and impairment
Balance at 1 April 2017 (19,591) (1,548) (21,139)
Amortisation for the year — (120) (120)
Disposals . — 1,543 1,543

Balance at 31 March 2018 (19,591) . (125) (19,716)

Net book value .
At I Aprit 2017 «— 58. 58

At 31 March 2018 — 74 74

Amortisation and impairment charge
Goodwill brought forward relates to the acquisition of Studio 33 (UK) Limited on 9 October 2003, the acquisition of the
games development business and related assets and liabilities of Criterion Software Limited on 21 October 2006, the
acquisition of the trade and assets of Electronic Arts Mobile Limited, a fellow group subsidiary, on 28 March 2009, the
acquisition of Playfish Limited, a fellow group subsidiary, on 1 February 2010 and the acquisition of Chillingo Limited,
a fellow group subsidiary, on 30 November 2010. '

22 .

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)

10 > Tangible fixedassets
Leasehold Office Computer
Improvements Equipment Hardware Total
£000 £000 £000 £000
Cost
Balance at 1 April 2017 7,218 1,443 9,659 18,320
Additions — 147 1,150 1,294
Adjustments (3) — — —

Balance at 31 March 2018 ~ 7,215 1,590 10,809 19,614

Balance at 1 April 2017 (4,432) (1,155) (7,399) (12,986)
Depreciation charge for the year (450) (92) (1,274) (1,816)
Disposals

Balance at 31 March 2018 (4,882) (1,247) (8,673) (14,802)

Net book value
At 1 April 2017 2,786 288 2,260 5,334

At 31 March 2018 2,333 343 2,136 4,812

Included in leasehold improvements is £1,119,000(2017: £1,119,000), which—represents capitalisation of the dilapidation
provision. Depreciation of this asset amounted to £160,000 (2017: £120,000) during the period. Net book value at the end
of the period was £839,000 (2017: £999,000).

11 Fixed asset investments

The Company has the following investments in subsidiaries, (* denotes investment held directly by the company):

Class of Ownership
Principal Registered
shares
activity office 31 Mar 18 i Apr 2017
held
Onslow House, Onslow
Playfish Limited* Dormant
Street, Guildford, GUI 4TN Ordinary 100% 100%
Onslow House, Onslow
Chillingo Limited* Dormant Street, Guildford, GUI 4TN Ordinary 100% 100%

Onslow House, Onslow
Click Gamer 'I'cchnolog‘ics Dormant Street, Guildford, GU1 4TN Ordinary 100% 100%
Limited*
Room 1445, 14/F, Tower A,
Beijing Playfish Game Online game Pacific Center; No. 2(A) Ordinary 100% 100%
Technology Limited development
Gong Ti.Nofth Road,
Chaoyang District, Beijing,
PRC

Electronic Arts Limited* Development .and Electronic Arts Ltda, Ordinary Liquidated 1 out of
distribution of Avenida Brigadeiro Faria 1,220,000
video games Limo no.3144, Jardim
Paulistano, Sao Paulo

23

‘Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)

12 Debtors

31 March 1 April
2018 2017

£000 £000

Trade debtors 4,667
Amounts owed by group undertakings 41,698 26,813
Other debtors 1,394 1,646
Deferred tax assets (see note 14) 2,820 4,867
Prepayments and accrued income 227 3,659

46,139 41,652

Due within one year 43,321 36,785
Due after more than one year 2,820 4,867

As the sales and return provision for the comparative period ended 31 March 2018 was greater than the total trade
debtors position, the remaining balanceof £4,960,000 was classified within Accruals and deferred income.

13 Creditors: amounts falling due within one year
31 March 1 April
2018 2017
£000 £000

Trade creditors 590 2,410
Amounts owed to group undertakings 4,947 192
Taxation and social security 2,398
Accruals and deferred income 16,630 14,269

24,565 16,871

Accruals and deferred income for the comparative period ended 1 April 2017 includes £4,960,000 of total £7,633,000
sales and return provisioning, which was re—classified after trade debtors of £2,673,000 had been fully netted off.

24

Electronic Arts Limited
Annual report andfinancial statements.
52 week period ended 31 March 2018

Notes (continued)

14 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities No Net
Period ended Period Ended ‘Period ended Period ended Period ended Period ended
31 March 1 April 31 March 1 April 31 March 1 April
2018 2017 2018 2017 2018 2017
£000 £000 £000 £000 £000 £000

Tangible fixed assets 939 1,681 — — 939 1,681
Share—based payments 1,570 1,937 = — 1,570 1,937
Deferredgovernment grants 221 263 — — 221 263
Provisions — — L L
Tax value of loss carry—forwards 5 843 — — 5 843
Other 85 143 — = 85 143

Tax (assets) / liabilities 2,820 4,867 — — 2,820 4,867

Net tax (assets) / liabilities 2,820 4,867 — > 2,820 4,867

Movement in deferredtax during the year
— Recognised Recognised
1 April 2017 in income in equity 31 March 2018
£000 £000 £000 £000

Tangible fixed assets 1,681 (742) 939
Share—based payments 1,937 (168) (199) 1,570
Deferred government grants 263 (42) 221
Provisions — — —
Tax value ofloss carry—forwards utilised 843 (838) 5.
Other 143 (58) 85

4,867 (1,848) (199) 2,820

Movement in deferredtax during the prior year
Recognised Recognised
2 Abril 2016 in income in equity J Aprit 2017
£000 £000 £000 £000

Tangible fixed assets 1,564 117 — 1,681
Share—based payments 1,710 323 (96) 1,937
Deferred government grants 160 103 — 263
Provisions _ — = —
Tax value of loss carry—forwards 616 227 — 843
Other 126 17 — 143

4,176 787 (96) 4,867

25

Electronic Arts Limited
Annual report andfinancial statemenis
52 week period ended 31 March 2018

Notes (continued)

15 Provisions

Dilapidations
£000
Balance at 1 April 2017 — 1,136
Unwinding of discounted amount 18

Balance at 31 March 2018 )0 1,154

The dilapidations provision of £1,154,000 represents the—estimated costs required to reinstate the leased premises to a
state as required under the lease, which expires.on31 ‘May.2026.

16 Capital and reserves
Share capital
31 March ~_ 1A April
2018 2017
£000 — £000
Allotted, calted up andfully paid
10,003 ordinary shares of £1 each 10 10

10 10

17 Employee benefits
Defined contribution plans

The Company operates a number of defined contribution pension plans. The total expense relating to these plans:in the
current year was £1,953,000 (2017: £1,857,000).

Share based payments
Employee Stock Purchase Plan
Since September 1991, employees have been offered the ability to participate in an employee stock purchase plan.
Under the terms of, the 2000 Employee Stock Purchase Plan ("ESPP"), eligible employees may authorise payroll
deductions of up to 10 percent oftheir compensation to purchase shares at 85 percent of the lower of the fair market
value of the common stock of Electronic Arts Inc., on the date of commencement of the offering or on the last day of
each six—month purchase period.
The weighted average share price at the date of exercise during the year was $121.96 (20/7: $83.72).
Stock Option Plans
The 2000 Equity Incentive Plan ("The Equity Plan") permits the grant to employees of options of common stock of
Electronic Arts Inc., restricted stock, restricted stock units and stock appreciation rights to employees, offices and
directors. Pursuant to the Equity Plan, incentive stock options may be granted to employees, officers and directors, at
not less than 100 percent of the fair market value on the date of grant.
Options granted under the Equity Plan generally expire 10 years from the date of the grant and are generally exercisable
as to 24 percent of the shares after 12 months and then rateably over the following 38 months.
The weighted average share price at the date of exercise of share options exercised during the year was $88.74 (2077:;
$74.94).
The options outstanding at the year end have an exercise price in the range of$16.06 to $47.06 and a weighted average
contractual life of 4.8 years,

26

Electronic Aris Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)

17 Employee benefits (continued)

Restricted Stock Units and Restricted Stock
Restricted Stock Units and Restricted Stock (collectively reférred toas "restricted stock rights") are granted under the
Equity Plan to employees. Restricted stock— units entitle holders to receive shares of common stock in Electronic Arts
at the end of a specified period of time at a zero exercise price. Upon vesting, the equivalent number of common shares
is typically issued net of tax withholdings. Restricted stock is issued and outstanding upon grant; however restricted
stock award holders are restricted from selling shares until they vest. Upon vesting, the company will typically withhold
shares to satisfy tax withholding requirements. Restricted stock rights are subject to forfeiture and transfer restrictions.
Vesting for restricted stock rights is based on the holders‘ continued employment with the company. If the vesting
conditions are not met, unvested restricted stock rights will beforfeited. Generally, restricted stock rights vest according
to one of the following vesting schedules:
100 percent after one year;
Three—year vesting with 25 percent vesting at the end of each of the first and second years and the remaining 50 percent
vesting at the end of the third year, or 1/3 vesting each year;
Four—year vesting with 25 percent vesting at the end of each year.

The weighted average share price at the date of exercise of share options exercised during the year was $113.17 (2017:
£77.72).
The options outstanding at the year end have a weighted average contractual life of 0.8 years.

18 Operating Leases
Non—cancellable operating lease rentals are payablé as—follows:
Period ended Period ended
31 March 1 April
2018 2017
£000 £000

Less than one year 1,680 1,680
Between one and five years 6,719 6,719
More than five years 279 1,960

8,678 10,359

The Company leases its office at Onslow House, and a number ofservers under operating leases.
During the year £1,554,000 (2017: £1,585,000) was recognised as an expense in the profit and loss account in respect of
operating leases.

19 Commitments
The company did not have any contracted capital expenditure at the period end (2017: £nil).

20 UlItimate parent company and parent company of larger group
The immediate parent company is Electronic Arts Nederland BV, a company registered in the Netherlands at Evert Van
De Beekstraat 104, 1118 CN Schiphol, Netherlands.
The ultimate controlling party is Electronic Arts Inc., a company incorporated in the USA. The largest group in which
the results of the— company are consolidated is that headed by Electronic Arts Inc. The consolidated accounts of Electronic
Arts Inc. are available to the public and copies may be obtained from Electronic Arts Inc. at 209 Redwood Shores
Parkway, Redwood City, CA 94065.

27

Electronic Arts Limited
Annual report andfinancial statements
52 week period ended 31 March 2018

Notes (continued)

21 Accounting estimates and judgements.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are addressed below. |
Sales Return Allowance (SRA)

To promote sell through to end users of our products, customers are offered credit to perform price promotions or
permanent mark downs in their selling prices. When calculating the SRA provision, (reduction of net revenue),
management considers the anticipated saleability of current stock in channel based on its historical and current seli
through rates as well as otherfactors (e.g. new / upcoming releases).

28 .

Document Created: 2019-09-27 18:19:52
Document Modified: 2019-09-27 18:19:52

© 2024 FCC.report
This site is not affiliated with or endorsed by the FCC