Cloud Trade Technologies Limited - Period Ending 2020-03-31

Registration number: 07039186

Cloud Trade Technologies Limited

Annual Report and Financial Statements

for the Year Ended 31 March 2020

Cloud Trade Technologies Limited

Contents

Balance Sheet	1
Statement of Changes in Equity	2
Notes to the Financial Statements	3 to 14

Cloud Trade Technologies Limited

(Registration number: 07039186)
Balance Sheet as at 31 March 2020

	Note	31 March 2020 £	31 March 2019 £
Fixed assets
Intangible assets	5	3,566	7,260
Tangible assets	6	25,689	20,258
Investments	7	8	791
		29,263	28,309
Current assets
Debtors	8	872,866	502,192
Cash at bank and in hand		718,151	1,527,037
		1,591,017	2,029,229
Creditors: Amounts falling due within one year	9	(396,418)	(283,020)
Net current assets		1,194,599	1,746,209
Total assets less current liabilities		1,223,862	1,774,518
Provisions for liabilities		(2,609)	(2,609)
Net assets		1,221,253	1,771,909
Capital and reserves
Called up share capital		521	521
Share premium reserve		2,054,586	2,054,586
Share options reserve		44,795	24,255
Profit and loss account		(878,649)	(307,453)
Total equity		1,221,253	1,771,909

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Directors' Report and the Profit and Loss Account has been taken.

Approved and authorised by the Board on 16 June 2020 and signed on its behalf by:
 

.........................................

D A Cocks
Director

The notes on pages 3 to 14 form an integral part of these financial statements.

Page 1

Cloud Trade Technologies Limited

Statement of Changes in Equity for the Year Ended 31 March 2020

	Share capital £	Share premium £	Share options reserve £	Profit and loss account £	Total £
At 1 April 2019	521	2,054,586	24,255	(307,453)	1,771,909
Loss for the year	-	-	-	(571,592)	(571,592)
Total comprehensive income	-	-	-	(571,592)	(571,592)
Share based payment transactions	-	-	20,540	396	20,936
At 31 March 2020	521	2,054,586	44,795	(878,649)	1,221,253

	Share capital £	Share premium £	Share options reserve £	Profit and loss account £	Total £
At 1 April 2018	316	-	-	163,689	164,005
Loss for the year	-	-	-	(471,142)	(471,142)
Total comprehensive income	-	-	-	(471,142)	(471,142)
New share capital subscribed	205	2,054,586	-	-	2,054,791
Share based payment transactions	-	-	24,255	-	24,255
At 31 March 2019	521	2,054,586	24,255	(307,453)	1,771,909

The notes on pages 3 to 14 form an integral part of these financial statements.

Page 2

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

1	General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
1-2 Hatfields
London
SE1 9PG

These financial statements were authorised for issue by the Board on 16 June 2020.

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The financial statements are prepared in sterling, which is the functional currency of the company, and rounded to the nearest £.

Summary of disclosure exemptions

As permitted by s408 of The Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company's loss for the year was £571,592 (2019 - loss for the year of £471,142)..

Page 3

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Going concern

The growth of the Coronavirus COVID-19 pandemic across the world has had an inevitable impact on the company’s trading outlook. Due to both the domestic nature of the business and its expanding overseas market, the pandemic has impacted on the company’s customer base, who are also affected by events at this time.

In light of the rapid global spread of the pandemic in early 2020, the directors took immediate action and implemented their business continuity plans, with the continuation of operations where possible as a result of the implementation of social distancing and other safe working practices to ensure the working environment is as safe as possible. The company has invested in significant technology resources and infrastructure which has enabled the head office and support staff to be able to work from home.

The directors have reviewed budgets and sales forecasts to assist with planning and spend over the forthcoming months. Although COVID-19 is expected to have an impact on trading performance in the year ended 31 March 2021, the directors do not consider that this will significantly impact the company’s ability to continue as a going concern as more businesses move into e-invoicing as a result of the pandemic.

The directors have also reviewed its supply chains, key customers and capital resources. Following the year end, the company has had a £200,000 loan approved under the Government backed Coronavirus Business Interruption Loan scheme which will provide additional working capital for the business to enable the continuation of trade. Given the level of cash held by the company, the high levels of reserves and the continued support of the shareholders, the directors consider that the company has adequate resources in place to continue trading for the foreseeable future, being twelve months from the date of approval of the financial statements. Therefore, the going concern basis continues to be applied in the preparation of the financial statements.

Audit report

The Independent Auditor's Report was unqualified. The name of the Senior Statutory Auditor who signed the audit report on 16 June 2020 was Andrew J Jordan, who signed for and on behalf of Milsted Langdon LLP.

Key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Page 4

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of processing recurring electronic invoices, e-orders and other transactions, and the fair value of the consideration received or receivable for the provision of implementation, on-boarding and set up services.

Turnover is shown net of value added tax, returns, rebates and discounts.

Turnover generated from the provision of implementation, on-boarding and set up services is recognised by reference to the stage of completion of the implementation, on-boarding and set up process, when the amount of turnover generated can be reliably measured and when it is probable that future economic benefits generated from the provision of these services will be received.

Turnover generated from the provision of processing recurring electronic invoices, e-orders and other transactions, following the implementation, on-boarding and set up process, is deferred and is recognised over the period to which the service is performed. The amount deferred is the amount that is reasonably expected to cover the expected costs of delivering the service over the life of the contract together with a reasonable profit on those services.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current tax and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Current or deferred taxation assets and liabilities are not discounted.

Page 5

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Intangible assets

Separately acquired licences are shown at cost less any subsequent accumulated amortisation and any accumulated impairment losses.

Licences (including software) and customer-related intangible assets acquired in a business combination before the date of transition are recognised at historical cost thereby applying a transitional exemption from the requirement to value at fair value at the acquisition date.

Licences and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class	Amortisation method and rate
Intellectual property	straight line over ten years
Patents and licences	straight line over three years
Computer software	straight line over three years

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Fixtures and fittings	25% on cost
Computer equipment	33% on cost

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Trade debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Page 6

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Research and development
Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satsified as to the technical, commercial and financial viability of individual projects.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Page 7

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Share based payments

The company operates an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the entity. The fair value of the employee services received is measured by reference to the estimated fair value at the grant date of equity instruments granted and is recognised as an expense over the vesting period. The estimated fair value of the option granted is derived from market prices of similar quoted companies.

The total amount expensed is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.

The fair value of any options awarded also takes into account non vesting conditions. These are other factors outside the control of either party (such as a target based on an index) or within the control of one or more of the parties (such as the scheme being kept open or the employee maintaining their contribution of services to the company).

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal
value) and share premium when the options are exercised.

3	Staff numbers

The average number of persons employed by the company (including directors) during the year was 38 (2019 - 27).

4	Loss before tax

Arrived at after charging/(crediting)

	31 March 2020 £	31 March 2019 £
Depreciation expense	15,589	12,594
Amortisation expense	3,694	6,723
Auditor's remuneration - The audit of the company's annual accounts	8,250	7,800

Page 8

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

5	Intangible assets

	Intellectual property  £	Patents and licences  £	Computer software  £	Total £
Cost or valuation
At 1 April 2019	28,521	39,151	14,612	82,284
At 31 March 2020	28,521	39,151	14,612	82,284
Amortisation
At 1 April 2019	22,103	38,309	14,612	75,024
Amortisation charge	2,852	842	-	3,694
At 31 March 2020	24,955	39,151	14,612	78,718
Carrying amount
At 31 March 2020	3,566	-	-	3,566
At 31 March 2019	6,418	842	-	7,260

6	Tangible assets

	Fixtures and fittings £	Other tangible assets  £	Total £
Cost or valuation
At 1 April 2019	19,592	80,621	100,213
Additions	11,078	9,941	21,019
At 31 March 2020	30,670	90,562	121,232
Depreciation
At 1 April 2019	11,864	68,090	79,954
Charge for the year	5,112	10,477	15,589
At 31 March 2020	16,976	78,567	95,543
Carrying amount
At 31 March 2020	13,694	11,995	25,689
At 31 March 2019	7,727	12,531	20,258

7	Investments

	31 March 2020 £	31 March 2019 £
Investments in subsidiaries	8	791

Page 9

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Subsidiaries	£
Cost or valuation
At 1 April 2019	791
Revaluation	(783)
At 31 March 2020	8
Carrying amount
At 31 March 2020	8
At 31 March 2019	791

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking	Registered office	Holding	Proportion of voting rights and shares held
			2020	2019
Subsidiary undertakings
Cloud Trade, Inc.	170 Whitman Road, Needham, 02492, MA USA	Ordinary	100%	100%

Subsidiary undertakings

Cloud Trade, Inc. The principal activity of Cloud Trade, Inc. is e-invoicing and electronic invoice processing in the cloud.

8

Debtors

	Note	31 March 2020 £	31 March 2019 £
Trade debtors		290,545	217,986
Amounts owed by group undertakings	14	169,805	1,965
Other debtors		53,088	37,651
Prepayments		68,451	45,798
Accrued income		8,900	11,293
Corporation tax asset		282,077	187,499
		872,866	502,192

Amounts owed by group undertakings are interest free and repayable on demand.

Page 10

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

9

Creditors

Creditors: amounts falling due within one year

	31 March 2020 £	31 March 2019 £
Due within one year
Trade creditors	112,206	52,191
Taxation and social security	93,190	81,441
Other creditors	3,713	13,010
Accruals and deferred income	187,309	136,378
	396,418	283,020

10	Pension and other schemes

Defined contribution pension scheme

The company participates in a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £90,884 (2019 - £32,155)

11	Share capital

Allotted, called up and fully paid shares

	31 March 2020		31 March 2019
	No.	£	No.	£
Ordinary shares of £0.001 each	520,797	520.80	520,797	520.80

Page 11

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

12	Share-based payments

EMI Share option schemes

Scheme details and movements

The company granted 17 share options in 2016 at an exercise price of £108.00. These were sub-divided during 2018. During the year, no further options were granted (2019 - Nil) and 4,000 share options lapsed (2019 - Nil). There were 10,000 (2019 - 14,000) outstanding options at the year end.

The company granted 39,000 share options in 2018 at an exercise price of £0.77. During the year, no further options were granted (2019 - 39,000) and 2000 share options lapsed or were forfeited during the year. There were 37,000 (2019 - 39,000) outstanding options at the year end.

The company granted 10,000 share options in 2019 at an exercise price of £6.44. During the year, no further option was granted and no share options lapsed or were forfeited during the year. There were 10,000 (2019 - Nil) outstanding options at the year end.

The contractual life of the options is 10 years. There are no cash settlement alternatives.

The movements in the number of share options during the year were as follows:

			31 March 2020		31 March 2019
			Number		Number
Outstanding, start of the period			53,000		53,000
Granted during the period			10,000		-
Forfeited during the period			(6,000)		-
Outstanding, end of period			57,000		53,000
Exercisable, end of period			57,000		-

The movements in the weighted average exercise price of share options during the year were as follows:

			31 March 2020		31 March 2019
			£		£
Outstanding, start of the period			0.60		0.60
Granted during the period			6.44		-
Forfeited during the period			0.33		-
Outstanding, end of period			1.65		0.60
Exercisable, end of period			1.65		0.60

Page 12

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

Unapproved share option scheme

Scheme details and movements

During the year the company granted 614 share options at an exercise price of £0.77 (2019 - 11,070 share options at an exercise price of £9.76, and 5,535 share options at an exercise price of £0.77). No further options were granted and no share options lapsed or were forfeited. Therefore there were 17,219 (2019 - 16,605) outstanding options at a weighted average exercise price of £6.55 (2019 - £6.76) as at the year end.

The contractual life of the options is 10 years. There are no cash settlement alternatives.

The movements in the number of share options during the year were as follows:

			31 March 2020		31 March 2019
			Number		Number
Outstanding, start of the period			16,605		-
Granted during the period			614		16,605
Outstanding, end of period			17,219		16,605
Exercisable, end of period			17,219		16,605

The movements in the weighted average exercise price of share options during the year were as follows:

			31 March 2020		31 March 2019
			£		£
Outstanding, start of the period			6.76		-
Granted during the period			0.77		6.76
Outstanding, end of period			6.55		6.76
Exercisable, end of period			6.55		6.76

13	Financial commitments, guarantees and contingencies

Amounts not provided for in the balance sheet

The total amount of financial commitments not included in the balance sheet is £106,814 (2019 - £55,828).

Page 13

Cloud Trade Technologies Limited

Notes to the Financial Statements for the Year Ended 31 March 2020

14	Related party transactions

Key management personnel

All directors who have authority and responsibility for the planning, directing and controlling the activities of the company are considered to be key management personnel.

Key management compensation

	31 March 2020 £	31 March 2019 £
Salaries and other short term employee benefits	160,000	169,668
Post-employment benefits	37,750	10,887
	197,750	180,555

Page 14