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30/04/2020
Fit Cloud Technology Ltd
07216878
Information for filing with the Registrar
For the year ended 30 April 2020
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FIT CLOUD TECHNOLOGY LTD
REGISTERED NUMBER: 07216878
STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2020
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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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Advanced subscription capital
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- 1 -
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FIT CLOUD TECHNOLOGY LTD
REGISTERED NUMBER: 07216878
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 30 APRIL 2020
The directors consider that the company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
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 statement of comprehensive income 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 by:
The notes on pages 3 to 13 form part of these financial statements.
- 2 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
Fit Cloud Technology Ltd is a private company limited by shares incorporated in the United Kingdom. The company's registered number is 07216878. The address of its registered office is The Granary, 50 Barton Road, Worsley, Manchester, M28 2EB.
The principal activity of the company is that of a provision of software development and onward subscription.
The financial statements have been presented in Pound Sterling as this is currency of the primary economic environment in which the company operates and is rounded to the nearest pound.
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 Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
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.
These financial statements have been prepared on a going concern basis. The directors, having considered the financial position of the company for a period of at least twelve months from the date of signing these financial statements, have no reason to believe that a material uncertainty exists that may cast doubt about the ability of the company to continue as a going concern.
Accordingly the directors have a reasonable expectation that the company will continue in operational existence and thus they adopt the going concern basis of accounting in preparing the financial statements.
The directors have included in their consideration, the likely financial impact that COVID-19 will have on the business in their assessment.
- 3 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The company's functional and presentational currency is GBP.
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.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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Operating leases: the company as lessee
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Rentals paid under operating leases are charged to the statement of comprehensive income on a straight line basis over the lease term.
- 4 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
2.Accounting policies (continued)
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Interest income is recognised in the statement of comprehensive income using the effective interest method.
Finance costs are charged to the statement of comprehensive income 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 the statement of comprehensive income in the year in which they are incurred.
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 the statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the statement of financial position. The assets of the plan are held separately from the company in independently administered funds.
- 5 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
2.Accounting policies (continued)
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each statement of financial position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to statement of comprehensive income over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the statement of comprehensive income is charged with fair value of goods and services received.
Tax is recognised in the statement of comprehensive income, 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.
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 income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the statement of financial position 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 reporting date.
An estimate of the likely tax credit that is attributable to a claim being made in respect of Research and Development expenditure is recognised at the time that the expenditure is actually incurred.
- 6 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
2.Accounting policies (continued)
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.
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.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
With effect from 1 May 2019, the company changed the period over which any new capitalised development expenditure would be amortised from three to five years. The change was to bring the policy into line with their current assessment of the useful life of the asset.
The company has estimated the self-developed gym membership management software will have a useful economic life of three years. At the end of the three years the software is likely to have no residual value.
Intangible assets that are not ready for sale are not amortised.
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.
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 the statement of comprehensive income.
- 7 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
2.Accounting policies (continued)
Investments in subsidiaries are measured at cost less accumulated impairment.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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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. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
- 8 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Critical judgements in applying the company's accounting policies
The critical judgements that the directors have made in the process of applying the company's accounting policies that have the most significant effect on the statutory financial statements are discussed below.
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments, identified during the current financial year.
The directors have included in their consideration, the likely financial impact that COVID-19 is having on the business in their assessment.
Key sources of estimation uncertainty
Determining useful economic lives of tangible fixed assets
The company depreciate tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on variety of products, including technological innovation, product life cycles and maintenance programmes.
The judgement is applied by management when determining the residual values for tangible fixed assets. When determining the residual value, management aim to assess the amount that the company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful life. Where possible this is done with reference to external market prices.
Recoverability of debtors
The company establishes a provision for debtors that are estimated not to be recoverable. When assessing recoverability the directors have considered factors such as the aging of the debtors, past experience of recoverability, and the credit profile of the individual or groups of customers.
- 9 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
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The average monthly number of employees, including directors, during the year was 36 (2019 - 28).
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Capitalised develop-ment expenditure
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Charge for the year on owned assets
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At the year end, the company has capitalised development expenditure of £470,522 (2019 - £nil) in respect of assets that are not ready for sale. No amortisation has been charged in respect of these assets during the year.
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- 10 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
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Charge for the year on owned assets
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Investments in subsidiary companies
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Details of security provided
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The company has provided lenders with security over debt of £224,427 (2019 - £400,564) by way of a fixed and floating charge over all property and undertakings of the company, now and in the future.
The company has provided hire purchase lenders with security over debt of £15,065 (2019 - £22,651) on the value of the underlying office equipment.
- 11 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
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Allotted, called up and fully paid
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299,000 (2019 - 272,369) Ordinary shares of £0.001 each
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During the year 26,631 Ordinary shares of £0.001 were issued and fully paid.
Share premium account
Advanced subscription capital represents any funds provided to the company in respect of any future share issues not completed by the end of a financial period.
Share premium represents the amount above the nominal value received for issue share capital, less transaction costs.
Profit & loss account
This reserve includes the cumulative profits or losses.
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £16,166 (2019 - £11,780). Contributions totalling £5,266 (2019 - £3,194) were payable to the fund at the balance sheet date and are included in other creditors.
- 12 -
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FIT CLOUD TECHNOLOGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2020
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Related party transactions
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Directors
Included within debtors: amounts due within one year is a loan to a director amounting to £5,292 (2019 - £26,645). An amount of £20,605 was written off during the year. Interest is charged at a market rate of 3% and the loan is repayable on demand.
Included within creditors due within one year are loans from directors amounting to £5,610 (2019 - £NIL). These amounts have been advanced interest free and are repayable on demand.
The company has borrowed £200,000 from a director, and £30,000 from a close family member of that director.
£200,000 (2019 - £NIL) is included within creditors: amounts falling due after more than one year. This loan is formal and interest is accrued at a flat rate of 10.5% per annum and paid quarterly in arrears. During the year, the company has accrued interest charges of £7,000 (2019 - £nil) in respect of this loan.
£30,000 (2019 - £30,000) is included within creditors: amounts falling due within one year. The loan was formal and interest has accrued at a flat rate of 6% per annum. This loan has exceeded its original payment term. Interest of £5,722 has accrued on this loan and the loan is repayable on demand.
Wholly owned subsidiary undertakings
The company has taken advantage of exemption granted by financial reporting standards from disclosing related party transactions with subsidiary undertakings which it wholly owns.
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Post balance sheet events
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Before the year end and pre the signing of this report there has been a worldwide pandemic caused by a newly discovered coronavirus, COVID-19.
Most people infected with the COVID-19 virus will experience mild to moderate respiratory illness and recover without requiring special treatment. Older people, and those with underlying medical problems like cardiovascular disease, diabetes, chronic respiratory disease, and cancer are more likely to develop serious illness.
To help prevent the spread of the virus, the UK government, as well as jurisdictions in other countries in which the company operates, have introduced strict social distancing policies and has forced businesses in the hospitality and leisure industries to close. The company provides software services to gym facilities on a subscription basis and gyms have been forced to close, the company's main source of revenue is therefore threatened.
The company is taking mitigating steps to protect its financial position by accessing grants that have been made available to the industry and by furloughing staff. Following the year end the company has secured additional funding of £350,000 under the Coronavirus Business Interuption Loan Scheme (CBILS).
The company has provided for doubtful debts of 5% of the total trade receivables as at the year end. This provision is directly related to the pandemic.
The directors believe that in the short-term the financial position of the company will be stable. However, a long-term forced lock-down could cast doubt on the ability of the company to continue as a going concern.
- 13 -
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