ZUPA_TECH_LIMITED - Accounts

The directors present their annual report and financial statements for the year ended 31 December 2020.

The principal activity of the company continued to be that of software development.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

I have been working in my own businesses since 1988 and I have to say 2020 was certainly unique in so many ways; some good and some tragically bad!

From a business perspective, for us at ZupaTech with our zupaPlatform project going at full tilt, it was a great year to focus our teams on going to a full Agile development process. We realised very early that our teams were well placed for online remote working and we have never looked back. We will go back to our office in due course, but it will be more for team building and knowledge sharing rather than an everyday office culture.

The first launch for the project will be our ‘zupaBiz’ MVP (minimum viable product), which is targeted for demoing from March 2021, with current and new clients trialling the Platform from beginning of September. Our development teams have continued building new functionality and performance/load test our main platform. The four months to the end of 2021 will be ‘tuning the Platform’ based mainly from our trialling users’ comments and suggestions at demo and trialling stages.

We expect to launch zupaBiz for commercial trading at the beginning of 2022.

With our current Caternet system, our clients are working in the Hospitality sector and we have all been pretty hammered with reducing income for 2020. But we have been there for our clients for the restart and 2nd lockdown as we got to the end of the year.

Further update on the project; the zupaPlatform project has built a technology ‘chassis’ in order to create a fully modernised ‘Business Operating Platform’ (from all we have learnt from Caternet over the last 12 years) for SME to Global businesses B2B. This will then get followed by zupaTrader for start-ups in B2B and B2C/P2P. The software will have fully integrated tech rather than plug-ins which means the successful start-ups do not need to change their tech as they need more power – they just upscale and move into their next growth period with the modernised software system.

Both zupaBiz and zupaTrader are SaaS based models, so no capital required. We are already receiving orders as businesses come out of the Pandemic and start opening up with existing older tech and the need for new future proofed tech which we are offering in component format to enable those businesses to benefit from the microservices technology quickly so they don’t waste any time being able to trade their way back into the ‘New World’.

As always, I have to say what a great team we are building into as we have matured over the project period to date – a business is the sum total of its people and products. We have certainly worked hard as a group and are looking forward to the first trade in zupaBiz in due course.

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

For the financial year ended 31 December 2020 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

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 members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Zupa Tech Limited is a private company limited by shares incorporated in England and Wales. The registered office is Htec House, George Curl Way, Southampton, United Kingdom, SO18 2RX.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

At the balance sheet date, the company had net current trueassets of £198,554 (2019: £267,984). At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The directors have assessed the impact of the Covid-19 pandemic and believe that they have taken sufficient steps and have adequate resources in place to continue trading for at least twelve months from the date that these financial statements are signed.

The turnover shown in the profit and loss account represents amounts invoiced during the period, exclusive of Value Added Tax.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors and loans from fellow group companies that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax.

Deferred tax is measured on a discounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

The average monthly number of persons (including directors) employed by the company during the year was:

Development costs are not amortised until the asset to which they relate has been brought into use.

During the prior year, a formal loan agreement was put in place for amounts owed to a director. The director loaned the company £2,542,959 on 28 September 2019 upon which interest is payable on the unpaid principal at a rate of 0.71% per annum, calculated annually in arrears. The loan is repayable in monthly instalments of £10,000 with the balance outstanding at 31 August 2029 repayable in full. As a result of the Covid-19 pandemic, some months were repaid at a lower rate than the £10,000 in agreement with the director. Included in accruals is interest in relation to the loan totalling £Nil (2019 - £5,964).

Post year end, a new formal loan agreement was put in place for amounts owed to a director. This involved amalgamating the above loan with the general directors loan account. Interest is payable on the unpaid principal of the full amount at a rate of 4% per annum, calculated annually in arrears. The loan is repayable in monthly instalments of £10,000 with the balance outstanding at 31 August 2029 repayable in full.

During the year £109,500 (2019 - £40,000) was repaid and interest of £22,876 was charged in the year. The balance outstanding at the year end was £2,416,334 (2019 - £2,502,958).

Deferred tax is not recognised in respect of tax losses as it is not probable that they will be recovered against the reversal of deferred tax liabilities or future taxable profits.

The preference shares have no specific date of redemption. Redemption is at the discretion of the directors. Distributions to the holders of the preference shares are also at the discretion of the directors. In accordance with FRS25, the preference shares are shown as equity, rather than debt.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

Included in other creditors is a loan with one of the directors and a close family member. At the year end, the company owed them £nil (2019 - £1,151,129).