| Cleartone Software Limited |
| Notes to the Accounts |
| for the year ended 31 January 2023 |
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| 1 |
Accounting policies |
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Basis of preparation |
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The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard). |
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The company is exempt from the requirement to prepare group accounts because it is itself a subsidiary undertaking. The financial statements therefore present information about the company as an individual undertaking and not about its group. |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Plant and machinery |
over 3 years |
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Fixtures and fittings |
over 3 years |
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Office equipment |
over 3 years |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that 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, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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Research and development |
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Expenditure on research and development is written off in the year it is incurred. |
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| 2 |
Employees |
2023 |
|
2022 |
| Number |
Number |
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Average number of persons employed by the company |
6 |
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6 |
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| 3 |
Debtors |
2023 |
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2022 |
| £ |
£ |
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Amounts owed by group undertakings and undertakings in which the company has a participating interest |
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1,692,301 |
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1,624,196 |
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Other debtors |
37 |
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37 |
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1,692,338 |
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1,624,233 |
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Amounts due after more than one year included above |
1,692,301 |
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1,624,196 |
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The amounts owed by group undertakings are repayable on demand, but require a notice period of at least one year. Interest was charged at a market rate of interest, as agreed with the directors. |
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| 4 |
Creditors: amounts falling due within one year |
2023 |
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2022 |
| £ |
£ |
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Bank loans and overdrafts |
80,000 |
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80,000 |
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Taxation and social security costs |
36,194 |
|
60,122 |
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Other creditors |
11,850 |
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12,850 |
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128,044 |
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152,972 |
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| 5 |
Creditors: amounts falling due after one year |
2023 |
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2022 |
| £ |
£ |
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Amounts owed to group undertakings and undertakings in which the company has a participating interest |
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1,006,948 |
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977,542 |
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The amounts owed to group undertakings are repayable on demand, but require a notice period of at least one year. Interest was charged at a market rate of interest, as agreed with the directors. |
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| 6 |
Loans |
2023 |
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2022 |
| £ |
£ |
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Creditors include: |
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Secured bank loans |
80,000 |
|
80,000 |
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The bank overdraft is secured by way of a debenture over the assets and undertakings of the company, from Cleartone Software Limited, Cleartone Group Limited and Cleartone Telecoms Limited, in favour of Handelsbanken. In addition, there is an unlimited inter company composite guarantee to the bank between Cleartone Software Limited, Cleartone Group Limited and Cleartone Telecoms Limited, as well as a counter indemnity by the same three companies. |
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| 7 |
Pension commitments |
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The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. At the balance sheet date, unpaid contributions of £0 (2022 - £0) were due to the fund. |
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| 8 |
Related party transactions |
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During the year, the company made charges for licence fees to Cleartone Telecoms Limited, on normal commercial terms, to the sum of £931,726 (2022 - £1,007,791). |
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At the balance sheet date, the amounts outstanding relating to group undertakings were £1,692,301 (2022 - £1,624,196) from Cleartone Telecoms Limited and £1,006,948 (2022 - £977,542) to Cleartone Group Limited. |
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| 9 |
Controlling party |
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Cleartone Group Limited, which holds 98% of the ordinary shares and 67% of the A ordinary shares of Cleartone Software Limited, is the company's immediate and ultimate parent undertaking and Mr RC Hill, who holds 52% of the shares of Cleartone Group Limited is the company's ultimate controlling party. Mr RC Hill also controls 100% of the shares of Boxblade Limited, a company which itself holds 18% of the shares of Cleartone Group Limited. Cleartone Group Limited is a company registered in England and Wales. |
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| 10 |
Other information |
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Cleartone Software Limited is a private company limited by shares and incorporated in England. Its registered office is: |
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Units 1-4 Crossley Farm |
|
Business Centre, Swan Lane |
|
Winterbourne |
|
Bristol |
|
BS36 1RH |
