Epic V10 Gen 1 damage to gel coat

Can anyone tell me why the gel coat is damaged on this boat? And is it repairable? Is the boat functional in its current condition?

A close-up photo would be helpful. 

My guess is that it is UV damage. 
If the boat is cheap and you have the tools, it might be possible to sand back and re-gel-coat.

It's mostly like UV damage to the clear coat, which isn't gelcoat. It's probably the epoxy or whatever resin Epic used at the time to lay out the carbon fiber. I had a similar issue with a carbon boat. Local rowing shop said they could sand and re clear coat it but it would cost about $1500 USD. That was almost what I pad for the boat so I skipped it.

Sorry for the delay in reply, forum was on the fritz!
The ski has no gelcoat, this was the lightest ski they made at the time and if laminated properly with epoxy no gelcoat is needed. The downside is the UV stability, if looked after properly and stored indoors the ski would be fine for many years.
This one obviously not well cared for!
It will come up good if you are handy with your hands. There is a cheap fix or and expensive fix. Obviously expensive is to take it to the appropriate repairer and he will sand it down and professionally paint it with a Polyurethane 2K clear coat. Cheap fix is sand it down yourself with a 250 or finer grade paper, just enough to remove the damaged surface, don't rub the carbon, just the epoxy surface, You can either paint with a clear polyurethane paint with a brush or with an epoxy. West System 105 is a good epoxy and will come out looking quite good. I usually just use a plastic bondo applicator and squeegie it on. This works much better than a brush and keeps it very thin without any runs. 
If done well it will look like new or very close to.

Ranga, wouldn't the key be to pick a hardener (or resin?) with UV inhibitors? That would be the 207 hardener in the west system? Alternatively, pick an epoxy used for surfboards clear coat, for example the Resin Research stuff. Surfboard DYI shops seem to all have some variant.

Everything is possible. Most resins do not have UV inhibitors. There must be a reason Epic use the resin they use as they usually use the best materials they can find. 
I use West System and it goes yellow in the sun, so not sure what you are talking about. If you clear coat with a paint then that helps a lot as most high quality paints have good UV inhibitors. Hence that is exactly what Epic started to do with their clear Elite skis.
The only UV additive I know of is for curing with a UV light. Epoxy is very temperamental stuff, you can't just add stuff too it, the properties go out of wack and you loose a lot of strength.
There might be stuff out there, I am not 100% up to speed on the latest stuff.

I had that same ski. First paddle took on quite a bit of water. Turns out the hull was basically a sieve. Must of had a thousand pin holes. I sanded the entire hull and applied a couple coats of epoxy. Of course sanded again (and again). Painted the bottom of hull with white polyurethane and the top with clear polyurethane. Sure was pretty. The painted section held up fine. The clear coat eventually failed and looked just like yours again. NO LEAKS THOUGH!  A lot of work.. Improved the drainage too!

I had that same ski. First paddle took on quite a bit of water. Turns out the hull was basically a sieve. Must of had a thousand pin holes. I sanded the entire hull and applied a couple coats of epoxy. Of course sanded again 9and again). Painted the bottom of hull with white polyurethane and the top with clear polyurethane. Sure was pretty. The painted section held up fine. The clear coat eventually failed and looked just like yours again. NO LEAKS THOUGH!  A lot of work.. Improved the drainage too!

I scraped off the flaking clear coat, did a light sand and then brushed on a thin coat west system epoxy!

Looks good from 15ft away which is good enough for me!

Should you use hardener as well? (i assume so but just checking,,)