Company Registration No. 10480375 (England and Wales)
Codat Limited
Annual report and
group financial statements
for the year ended 31 December 2021
Codat Limited
Company information
Directors
Alexander Cardona
Peter Lord
David Hoare
Stéphane Kurgan
(Appointed 4 October 2021)
Patrick McGoldrick
(Appointed 22 April 2022)
Company number
10480375
Registered office
301 Ink Rooms
28 Easton Street
London
WC1X 0BE
Independent auditor
Saffery Champness LLP
71 Queen Victoria Street
London
EC4V 4BE
Codat Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 9
Income statement
10
Group statement of comprehensive income
11
Group statement of financial position
12 - 13
Company statement of financial position
14 - 15
Group statement of changes in equity
16 - 17
Company statement of changes in equity
18 - 19
Group statement of cash flows
20
Notes to the financial statements
21 - 44
Codat Limited
Strategic report
For the year ended 31 December 2021
Page 1
The directors present the
S
trategic
R
eport for the period ended 31 December 2021
for Codat Limited ("the Company") and its subsidiaries Codat Inc. and Codat Pty Ltd, together ("the Group").
Business review
The principal activity of the Group is the provision of software as a service (SaaS), through offering a standardised API that provides real-time data connectivity to the financial software used by small businesses globally.
The financial results for the Group for the period ended 31 December 2021 show an increase in revenue of 109% compared to the prior year (2021: $6.5m, 2020: $3.1m). The Group reported a loss of $
14.5
m (2020: $2.3m).
The Group
's
cash balance as at 31 December 2021 is $47.4m (2020: $14.1m).
Principal risks and uncertainties
The principal risks and uncertainties faced by the Group relate to cybersecurity, loss of key staff, liquidity risk and competition within the market.
The Group
's
exposure to major risks and uncertainties is managed by adopting robust policies and controls in order to mitigate and protect against them.
Financial risk management
The Group’s operations expose it to a variety of financial risks that include foreign exchange risk, credit risk and liquidity and cashflow risk. The following policies are in place to help mitigate these risks:
Foreign exchange risk
The Group is exposed to foreign exchange risk from commercial transactions and recogni
s
ed assets and liabilities that are denominated in a currency that is not the functional currency. The Group monitors movements in exchange rates, cash balances in foreign currencies and foreign currency funding requirements in order to mitigate exposure to foreign currency risk.
Liquidity and cashflow risk
The Group’s liquidity and cash flow risk is managed by monitoring and maintaining a level of cash and cash equivalents that is deemed adequate by the Directors to finance the Group
's
operations.
This is done through short and long term funding requirements as well as fund raising activities from new investors.
Credit risk
The Group
's
credit risk is attributable to its cash and cash equivalents, deposits with banks and financial institutions, and outstanding trade debtors. The Group seeks to minimize the exposure on cash deposits by using only major banks and financial institutions. The Group monitors trade debtor balances on an ongoing basis.
Codat Limited
Strategic report (continued)
For the year ended 31 December 2021
Page 2
Key performance indicators
The key performance indicators for the Group are; revenue from customers, average employee head count and the cash balance.
The results of these can be seen on pages
10
,
25
and
27
.
Future developments
The Group has achieved strong revenue growth, and the Directors are confident of the future performance of the Group.
Alexander Cardona
Director
12 September 2022
Codat Limited
Directors' report
For the year ended 31 December 2021
Page 3
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company and group continued to be that of information technology service activities.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Alexander Cardona
Jan Hammer
(Resigned 4 October 2021)
Peter Lord
David Hoare
Stéphane Kurgan
(Appointed 4 October 2021)
Patrick McGoldrick
(Appointed 22 April 2022)
Future developments
The
g
roup has achieved strong revenue growth, and the
d
irectors are confident of the future performance of the
g
roup.
Auditor
The auditor, Saffery Champness LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Codat Limited
Directors' report (continued)
For the year ended 31 December 2021
Page 4
Statement of directors' responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the
;
-
prepare the
on the going concern basis unless it is inappropriate to presume that the
group and
company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor
of the
company is
unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor
of the
company
is
aware of that information.
Going concern
After assessing the group’s actual and expected future cashflows
and with the recent fund raise of $100m
, based on their current expectations of trading prospects, the
d
irectors have a reasonable expectation that the group has adequate resources in order to be able to continue in operational existence for the foreseeable future. Accordingly, the
d
irectors continue to adopt the going concern basis in preparing the financial statements.
Codat Limited
Directors' report (continued)
For the year ended 31 December 2021
Page 5
On behalf of the board
Alexander Cardona
Director
13 September 2022
Codat Limited
Independent auditor's report
To the members of Codat Limited
Page 6
Opinion
We have audited the
financial statements of
Codat Limited
(the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements,
including
significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102
,
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the group and of the parent company's affairs as at 31 December 2021 and of the group's loss for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the
group or the parent
company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Codat Limited
Independent auditor's report (continued)
To the members of Codat Limited
Page 7
The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of
the
audit
:
-
the information given in the strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the
group and the parent
company and
their
environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-
the parent company financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine
is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the
financial statements
, the
directors are
responsible for assessing the
group and the parent
company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors
either
intend
to liquidate the
group or parent
company or to cease operations, or have no realistic alternative but to do so.
Codat Limited
Independent auditor's report (continued)
To the members of Codat Limited
Page 8
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the group and parent company financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with directors and by updating our understanding of the sector in which the group and parent company operates.
Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
Codat Limited
Independent auditor's report (continued)
To the members of Codat Limited
Page 9
As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the parent company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company's members those matters we are required to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jamie Cassell (Senior Statutory Auditor)
For and on behalf of Saffery Champness LLP
12 September 2022
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
Codat Limited
Group income statement
For the year ended 31 December 2021
Page 10
Year
Period
ended
ended
31 December
31 December
2021
2020
Notes
$
$
Turnover
3
6,517,525
3,116,330
Cost of sales
(1,028,074)
(469,563)
Gross profit
5,489,451
2,646,767
Administrative expenses
(21,270,387)
(9,236,357)
Other operating income
3,637,293
3,892,183
Operating loss
4
(12,143,643)
(2,697,407)
Interest receivable and similar income
8
28,965
12,079
Interest payable and similar expenses
9
(1)
Other gains and losses
10
(2,886,494)
Loss before taxation
(15,001,172)
(2,685,329)
Tax on loss
11
460,622
406,132
Loss for the financial year
23
(14,540,550)
(2,279,197)
Loss for the financial year is all attributable to the owners of the parent company.
Codat Limited
Group statement of comprehensive income
For the year ended 31 December 2021
Page 11
Year
Period
ended
ended
31 December
31 December
2021
2020
$
$
Loss for the year
(14,540,550)
(2,279,197)
Other comprehensive income
Currency translation differences
(2,062,087)
914,434
Total comprehensive income for the year
(16,602,637)
(1,364,763)
Total comprehensive income for the year is all attributable to the owners of the parent company.
Codat Limited
Group statement of financial position
As at 31 December 2021
Page 12
2021
2020
Notes
$
$
$
$
Fixed assets
Tangible assets
12
520,225
311,188
Current assets
Debtors
15
4,529,974
1,294,771
Cash at bank and in hand
47,440,060
14,110,778
51,970,034
15,405,549
Creditors: amounts falling due within one year
16
(13,950,082)
(4,462,816)
Net current assets
38,019,952
10,942,733
Total assets less current liabilities
38,540,177
11,253,921
Creditors: amounts falling due after more than one year
17
(98,006)
(2,643,545)
Provisions for liabilities
Deferred tax liability
18
101,643
47,360
(101,643)
(47,360)
Net assets
38,340,528
8,563,016
Capital and reserves
Called up share capital
22
3,167
2,520
Share premium account
23
55,131,518
11,980,717
Equity reserve
23
392,994
50,787
Capital contribution reserve
23
2,886,494
Other reserves
23
(1,169,417)
892,927
Profit and loss reserves
23
(18,904,228)
(4,363,935)
Total equity
38,340,528
8,563,016
Codat Limited
Group statement of financial position (continued)
As at 31 December 2021
Page 13
The financial statements were approved by the board of directors and authorised for issue on 12 September 2022 and are signed on its behalf by:
Alexander Cardona
Director
Codat Limited
Company statement of financial position
As at 31 December 2021
Page 14
2021
2020
Notes
$
$
$
$
Fixed assets
Tangible assets
12
437,670
301,239
Investments
13
124,412
10
562,082
301,249
Current assets
Debtors
15
10,307,332
2,043,100
Cash at bank and in hand
46,628,686
13,949,515
56,936,018
15,992,615
Creditors: amounts falling due within one year
16
(12,566,437)
(4,322,101)
Net current assets
44,369,581
11,670,514
Total assets less current liabilities
44,931,663
11,971,763
Creditors: amounts falling due after more than one year
17
(98,006)
(2,643,545)
Provisions for liabilities
Deferred tax liability
18
101,643
47,360
(101,643)
(47,360)
Net assets
44,732,014
9,280,858
Capital and reserves
Called up share capital
22
3,166
2,520
Share premium account
23
55,131,518
11,980,717
Equity reserve
23
392,994
50,787
Capital contribution reserve
23
2,886,494
Other reserves
23
(1,169,417)
892,927
Profit and loss reserves
23
(12,512,741)
(3,646,093)
Total equity
44,732,014
9,280,858
As permitted by s408 Companies Act 2006, the
c
ompany has not presented its own profit and loss account and related notes. The
c
ompany’s loss for the
period
was $8,866,647 (2020 - $1,561,355 loss).
Codat Limited
Company statement of financial position (continued)
As at 31 December 2021
Page 15
The financial statements were approved by the board of directors and authorised for issue on 12 September 2022 and are signed on its behalf by:
12 September 2022
Alexander Cardona
Director
Company Registration No. 10480375
Codat Limited
Group statement of changes in equity
For the year ended 31 December 2021
Page 16
Share capital
Share premium account
Equity reserve
Capital contribution reserve
Other reserves
Profit and loss reserves
Total
Notes
$
$
$
$
$
$
$
Balance at 1 December 2019
1,980
2,226,331
-
-
(21,507)
(2,084,738)
122,066
Period ended 31 December 2020:
Loss for the period
-
-
-
-
-
(2,279,197)
(2,279,197)
Other comprehensive income:
Currency translation differences
-
-
-
-
-
914,434
914,434
Total comprehensive income for the period
-
-
-
-
-
(1,364,763)
(1,364,763)
Issue of share capital
22
540
9,754,386
-
-
-
-
9,754,926
Credit to equity for equity settled share-based payments
21
-
-
-
-
-
50,787
50,787
Transfers
-
-
-
-
914,434
(914,434)
-
Other movements
-
-
50,787
-
-
(50,787)
-
Balance at 31 December 2020
2,520
11,980,717
50,787
892,927
(4,363,935)
8,563,016
Codat Limited
Group statement of changes in equity (continued)
For the year ended 31 December 2021
Share capital
Share premium account
Equity reserve
Capital contribution reserve
Other reserves
Profit and loss reserves
Total
Notes
$
$
$
$
$
$
$
Page 17
Year ended 31 December 2021:
Loss for the year
-
-
-
-
-
(14,540,550)
(14,540,550)
Other comprehensive income:
Currency translation differences
-
-
-
-
-
(2,062,087)
(2,062,087)
Total comprehensive income for the year
-
-
-
-
-
(16,602,637)
(16,602,637)
Issue of share capital
22
647
43,150,801
-
-
-
-
43,151,448
Capital contribution
-
-
-
2,886,494
-
-
2,886,494
Reclassification
-
-
-
-
40,414
(40,414)
-
Transfers to other reserves
-
-
-
-
(2,102,758)
2,102,758
-
Transfers to equity reserves
-
-
342,207
-
-
(342,207)
-
Share based payments
-
-
-
-
-
342,207
342,207
Balance at 31 December 2021
3,167
55,131,518
392,994
2,886,494
(1,169,417)
(18,904,228)
38,340,528
Codat Limited
Company statement of changes in equity
For the year ended 31 December 2021
Page 18
Share capital
Share premium account
Equity reserve
Capital contribution reserve
Other reserves
Profit and loss reserves
Total
Notes
$
$
$
$
$
$
$
Balance at 1 December 2019
1,980
2,226,331
-
-
(21,507)
(2,084,738)
122,066
Period ended 31 December 2020:
Loss for the period
-
-
-
-
-
(1,561,355)
(1,561,355)
Other comprehensive income:
Currency translation differences
-
-
-
-
-
914,434
914,434
Total comprehensive income for the period
-
-
-
-
-
(646,921)
(646,921)
Issue of share capital
22
540
9,754,386
-
-
-
-
9,754,926
Credit to equity for equity settled share-based payments
21
-
-
-
-
-
50,787
50,787
Transfers
-
-
-
-
914,434
(914,434)
-
Other movements
-
-
50,787
-
-
(50,787)
-
Balance at 31 December 2020
2,520
11,980,717
50,787
892,927
(3,646,093)
9,280,858
Codat Limited
Company statement of changes in equity (continued)
For the year ended 31 December 2021
Share capital
Share premium account
Equity reserve
Capital contribution reserve
Other reserves
Profit and loss reserves
Total
Notes
$
$
$
$
$
$
$
Page 19
Year ended 31 December 2021:
Loss for the year
-
-
-
-
-
(8,866,648)
(8,866,648)
Other comprehensive income:
Currency translation differences
-
-
-
-
-
(2,062,344)
(2,062,344)
Total comprehensive income for the year
-
-
-
-
-
(10,928,992)
(10,928,992)
Issue of share capital
22
646
43,150,801
-
-
-
-
43,151,447
Capital contribution
-
-
-
2,886,494
-
-
2,886,494
Transfer to other reserves
-
-
-
-
(2,062,344)
2,062,344
-
Transfer to equity reserves
-
-
342,207
-
-
(342,207)
-
Share based payments
-
-
-
-
-
342,207
342,207
Balance at 31 December 2021
3,166
55,131,518
392,994
2,886,494
(1,169,417)
(12,512,741)
44,732,014
Codat Limited
Group statement of cash flows
For the year ended 31 December 2021
Page 20
2021
2020
Notes
$
$
$
$
Cash flows from operating activities
Cash absorbed by operations
26
(7,414,175)
(2,901,394)
Interest paid
(1)
Income taxes (paid)/refunded
(479)
146,475
Net cash outflow from operating activities
(7,414,654)
(2,754,920)
Investing activities
Purchase of tangible fixed assets
(374,390)
(222,411)
Interest received
28,965
12,079
Net cash used in investing activities
(345,425)
(210,332)
Financing activities
Proceeds from issue of shares
43,151,448
9,754,926
Net cash generated from financing activities
43,151,448
9,754,926
Net increase in cash and cash equivalents
35,391,369
6,789,674
Cash and cash equivalents at beginning of year
14,110,778
6,406,670
Effect of foreign exchange rates
(2,062,087)
914,434
Cash and cash equivalents at end of year
47,440,060
14,110,778
Codat Limited
Notes to the group financial statements
For the year ended 31 December 2021
Page 21
1
Accounting policies
Company information
Codat Limited (“the company”)
is a
private
limited company incorporated in
England and Wales
.
The registered office is
301 Ink Rooms, 28 Easton Street, London, WC1X 0BE.
The group consists of Codat Limited and all of its subsidiaries.
1.1
Accounting convention
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.
The financial statements are prepared in
United States Dollars.
Th
e functional currency of the company
is Sterling
.
Monetary a
mounts
in these financial statements are
rounded to the nearest
United States Dollar
.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues
: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
-
Section 26 ‘Share based Payment’
:
Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 22
1.2
Business combinations
In the parent company
financial statements, t
he cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
I
nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company
Codat Limited
together with
all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates
.
All
financial statements
are made up to 31 December 2021
.
Where necessary, adjustments are made to the
financial statements
of subsidiaries to bring the accounting policies used into line with those used by other members of the
g
roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
1.4
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the
group
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 group have operating cash flows and management forecasts which do not provide any indication of material cash flow concerns.
In addition, as disclosed in note 25,
on 21 April 2022 the group completed a Series C
fundraise, generating $100m in funding through share capital.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 23
1.5
Reporting period
During the prior period, the directors extended the accounting period by one month. Therefore, the comparative figures for 2020 are for the 13 month period from 1 December 2019 to 31 December 2020.
1.6
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
The group recognises service revenue over the period when the service is provided. Minimum monthly usage is recognised over the period of the contract, and any additional usage is recognised in the period it is used.
1.7
Tangible fixed assets
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:
Leasehold improvements
Over useful life of 3 years
Fixtures and fittings
33% reducing balance
Computer equipment
33% reducing balance
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 recognised in the
income statement
.
1.8
Fixed asset investments
Equity in
vest
ments are measured at fair value through profit or loss
,
except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably
,
which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I
n the parent company
financial statements,
investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the
group. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 24
1.9
Impairment of fixed assets
At each reporting
period
end date, the
group
reviews the carrying amounts of its tangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.10
Cash and cash equivalents
Cash and cash equivalents
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. Bank overdrafts are shown within borrowings in current liabilities.
1.11
Financial instruments
The group 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 group's
statement of financial position
when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 25
Basic financial assets
Basic financial assets, which include debtors, 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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
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 group after deducting all of its liabilities.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 26
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from fellow group companies and preference shares 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
paymen
ts 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. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the
group's contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the group 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 group.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the
period
. Taxable profit differs from net profit as reported in the
income statement
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
group’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 27
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
Employee benefits
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the
Black Scholes
model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
The expense in relation to options over the
parent
company’s shares granted to employees of a subsidiary is recognised by the
c
ompany as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 28
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.17
Leases
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 lease
d
asset are consumed.
1.18
Government grants
Government grants are recognised at the fair value of the asset receive
d
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.
1.19
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
All variances arising following the translation from functional to presentational currency are recognised in other comprehensive income and transferred to other reserves.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
Page 29
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the group’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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Share based payments
The estimated fair values of the Company’s share options have been calculated using a Black-Scholes valuation technique. This method requires the application of judgement in assessing a number of key inputs, including expected dividends, expected share price volatility and the expected period to exercise. The Directors makes these judgement by reference to observable external sources, where applicable, or by review of forecast and historical data.
Recoverability of intercompany receivables
The recoverability of intercompany receivables is dependent on the future performance of the subsidiary. The Directors make a judgement of the recoverability based on review of the projections and forecasts for the subsidiary, sensitised across a range of probability-weighted scenarios.
Convertible loan notes
The estimated fair values of the Company’s
convertible loan notes
have been calculated using a
Binomial step simulation
valuation technique. This method requires the application of judgement in assessing a number of key inputs, including
discount rate, settlement date, dilution and volatility
. The Directors
have used a third party specialist to value the convertible loan notes, and perform a detailed review of the calculation to ensure inputs and calculations are as expected.
3
Turnover and other revenue
2021
2020
$
$
Turnover analysed by class of business
Subscription fees
6,517,525
3,116,330
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
3
Turnover and other revenue (continued)
Page 30
2021
2020
$
$
Turnover analysed by geographical market
UK
3,530,412
2,373,119
Europe
281,956
180,097
Rest of World
2,705,157
563,114
6,517,525
3,116,330
2021
2020
$
$
Other significant revenue
Interest income
28,965
12,079
Grants received
3,623,199
3,890,346
Other income
14,770
-
4
Operating loss
2021
2020
$
$
Operating loss for the year is stated after charging/(crediting):
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(1,175,699)
34,182
Government grants
(3,623,199)
(3,890,346)
Depreciation of owned tangible fixed assets
147,012
96,024
Loss on disposal of tangible fixed assets
18,341
Share-based payments
342,207
50,787
Operating lease charges
850,330
358,146
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
$
$
For audit services
Audit of the financial statements of the group and company
22,000
23,791
Audit of the financial statements of the company's subsidiaries
6,500
-
28,500
23,791
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
5
Auditor's remuneration (continued)
Page 31
For other services
Taxation compliance services
7,710
-
All other non-audit services
28,694
-
36,404
-
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2021
2020
2021
2020
Number
Number
Number
Number
Directors
3
3
3
3
Sales and Marketing
47
12
33
12
Technical
68
41
67
41
Operations
19
6
15
6
Total
137
62
118
62
Their aggregate remuneration comprised:
Group
Company
2021
2020
2021
2020
$
$
$
$
Wages and salaries
15,997,849
5,823,688
11,722,621
5,748,008
Social security costs
1,704,144
698,688
1,391,896
691,013
Pension costs
503,899
101,350
503,899
101,350
18,205,892
6,623,726
13,618,416
6,540,371
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
Page 32
7
Directors' remuneration
2021
2020
$
$
Remuneration for qualifying services
635,389
376,489
Company pension contributions to defined contribution schemes
12,640
5,367
648,029
381,856
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2021
2020
$
$
Remuneration for qualifying services
281,958
174,824
Company pension contributions to defined contribution schemes
2,735
1,708
8
Interest receivable and similar income
2021
2020
$
$
Interest income
Interest on bank deposits
28,965
12,079
9
Interest payable and similar expenses
2021
2020
$
$
Interest charges
1
10
Other gains and losses
2021
2020
$
$
Loss on conversion of convertible loan notes
(2,886,494)
-
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
Page 33
11
Taxation
2021
2020
$
$
Current tax
Adjustments in respect of prior periods
(6,965)
Other tax reliefs
(508,387)
(427,890)
Total current tax
(515,352)
(427,890)
Deferred tax
Origination and reversal of timing differences
39,672
21,758
Changes in tax rates in future years from 19% to 25%
15,058
Total deferred tax
54,730
21,758
Total tax credit
(460,622)
(406,132)
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
$
$
Loss before taxation
(15,001,172)
(2,685,329)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
(2,850,223)
(510,213)
Tax effect of expenses that are not deductible in determining taxable profit
1,112,878
Tax effect of income not taxable in determining taxable profit
(490,557)
Unutilised tax losses carried forward
1,021,203
510,213
Permanent capital allowances in excess of depreciation
(8,052)
21,758
Research and development tax credit
(404,839)
(427,890)
Other permanent differences
109
Deferred tax adjustments in respect of prior years
56,838
Fixed asset differences
(553,369)
Remeasurement of deferred tax for changes in tax rates
1,655,390
Taxation credit
(460,622)
(406,132)
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
11
Taxation (continued)
Page 34
The group and company have not recognised a deferred tax asset for tax losses due to the uncertainty of timing of profits.
12
Tangible fixed assets
Group
Leasehold improvements
Fixtures and fittings
Computer equipment
Total
$
$
$
$
Cost
At 1 January 2021
100,894
71,565
276,649
449,108
Additions
4,733
10,322
359,335
374,390
Disposals
(315)
(40,586)
(40,901)
At 31 December 2021
105,627
81,572
595,398
782,597
Depreciation and impairment
At 1 January 2021
53,318
29,581
55,021
137,920
Depreciation charged in the year
34,707
12,655
99,650
147,012
Eliminated in respect of disposals
(184)
(22,376)
(22,560)
At 31 December 2021
88,025
42,052
132,295
262,372
Carrying amount
At 31 December 2021
17,602
39,520
463,103
520,225
At 31 December 2020
47,576
41,984
221,628
311,188
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
12
Tangible fixed assets (continued)
Page 35
Company
Leasehold improvements
Fixtures and fittings
Computer equipment
Total
$
$
$
$
Cost
At 1 January 2021
100,894
71,565
266,417
438,876
Additions
4,733
10,322
273,851
288,906
Disposals
(315)
(40,586)
(40,901)
At 31 December 2021
105,627
81,572
499,682
686,881
Depreciation and impairment
At 1 January 2021
53,318
29,581
54,738
137,637
Depreciation charged in the year
34,707
12,655
86,772
134,134
Eliminated in respect of disposals
(184)
(22,376)
(22,560)
At 31 December 2021
88,025
42,052
119,134
249,211
Carrying amount
At 31 December 2021
17,602
39,520
380,548
437,670
At 31 December 2020
47,576
41,984
211,679
301,239
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
Page 36
13
Fixed asset investments
Group
Company
2021
2020
2021
2020
Notes
$
$
$
$
Investments in subsidiaries
14
124,412
10
Movements in fixed asset investments
Company
Shares in subsidiaries
$
Cost or valuation
At 1 January 2021
10
Additions
124,402
At 31 December 2021
124,412
Carrying amount
At 31 December 2021
124,412
At 31 December 2020
10
14
Subsidiaries
Details of the company's subsidiaries at 31 December 2021 are as follows:
Name of undertaking
Registered office
Nature of business
Class of shares held
% Held Direct
Codat Inc
215 Park Avenue South, 11th Floor, New York, NY 10003
Provision of Saas
Ordinary
100.00
Codat PTY Ltd
Level 11 and 12, 10 Carrington Street, Sydney, NSW 2000
Provision of Saas
Ordinary
100.00
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
Page 37
15
Debtors
Group
Company
2021
2020
2021
2020
Amounts falling due within one year:
$
$
$
$
Trade debtors
1,595,427
349,154
925,602
330,849
Corporation tax recoverable
939,276
427,965
939,276
427,965
Amounts owed by group undertakings
-
-
6,833,159
836,324
Other debtors
674,723
172,758
518,121
131,896
Prepayments and accrued income
1,196,027
223,066
970,620
217,601
4,405,453
1,172,943
10,186,778
1,944,635
Amounts falling due after more than one year:
Other debtors
124,521
121,828
120,554
98,465
Total debtors
4,529,974
1,294,771
10,307,332
2,043,100
16
Creditors: amounts falling due within one year
Group
Company
2021
2020
2021
2020
Notes
$
$
$
$
Trade creditors
470,368
333,321
380,747
287,157
Other taxation and social security
530,862
261,367
530,862
261,367
Deferred income
19
11,724,862
3,502,825
10,837,598
3,429,868
Other creditors
107,742
71,399
104,257
71,399
Accruals
1,116,248
293,904
712,973
272,310
13,950,082
4,462,816
12,566,437
4,322,101
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
Page 38
17
Creditors: amounts falling due after more than one year
Group
Company
2021
2020
2021
2020
Notes
$
$
$
$
Deferred income
19
97,291
2,617,063
97,291
2,617,063
Other creditors
715
26,482
715
26,482
98,006
2,643,545
98,006
2,643,545
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2021
2020
Group
$
$
Accelerated capital allowances
101,643
47,360
Liabilities
Liabilities
2021
2020
Company
$
$
Accelerated capital allowances
101,643
47,360
Group
Company
2021
2021
Movements in the year:
$
$
Liability at 1 January 2021
47,360
47,360
Charge to profit or loss
39,672
39,672
Change in tax rate (note 11)
15,058
15,058
Other
(447)
(447)
Liability at 31 December 2021
101,643
101,643
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
Page 39
19
Deferred income
Group
Company
2021
2020
2021
2020
$
$
$
$
Arising from government grants
8,598,483
5,447,541
8,598,483
5,447,541
Other deferred income
3,223,670
672,347
2,336,406
599,390
11,822,153
6,119,888
10,934,889
6,046,931
Deferred income is included in the financial statements as follows:
Current liabilities
11,724,862
3,502,825
10,837,598
3,429,868
Non-current liabilities
97,291
2,617,063
97,291
2,617,063
11,822,153
6,119,888
10,934,889
6,046,931
20
Retirement benefit schemes
2021
2020
Defined contribution schemes
$
$
Charge to profit or loss in respect of defined contribution schemes
503,899
101,350
A
defined contribution pension scheme
is operated
for all qualifying employees.
The assets of the scheme are held separately from those of the group in an independently administered fund.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
Page 40
21
Share-based payment transactions
Employee Management Incentive (EMI) scheme
The parent Company operates an Employee Management Incentive scheme, whereby employees are granted options to purchase shares in the parent Company. The options are granted with a fixed exercise price, are exercisable subject to vesting spread over a 4 year period, and expire ten years after the grant date. Share options will immediately vest in full in the event of an exit. Employees are required to remain in employment with the company until exercise, otherwise the awards lapse. On exercise of options by the employees, the parent Company issues new shares. The weighted average exercise price is disclosed in pounds sterling as this is the currency in which the options are exercisable.
The fair value of the share options have been estimated using the Black-Scholes model, being a common valuation method for valuing European style options.
At the start of the year, a total of 2,382,500 share options remained in issue over Ordinary shares.
2021
2021
Number
Price (£)
Outstanding at 1 January 2021
2,382,500
0.07
Granted
963,742
0.63
Forfeited
(52,688)
0.46
Exercised
(16,800)
0.09
Outstanding at 31 December 2021
3,276,754
0.23
Exercisable at 31 December 2021
1,506,021
0.06
The options outstanding at 31 December 2021 had an exercise price ranging from £0.65 to 0.0149, and a remaining contractual life of 3 years.
Group (£)
Company (£)
Expenses recognised in the period
Arising from equity settled share based payment transactions
107,659
107,659
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
21
Share-based payment transactions (continued)
Page 41
Incentive Stock Option (ISO) scheme
The parent company also operates a ISO equity settled scheme for its US subsidiary employees. The options are granted with a fixed exercise price, are exercisable subject to vesting spread over a 4 year period, and expire ten years after the grant date. Share options will immediately vest in full in the event of an exit. Employees are required to remain in employment with the company until exercise, otherwise the awards lapse. Options have also been granted where vesting is subject to employees meeting certain internal targets. As this is a non-market performance condition it is not included in the determination of the fair value of the grant date, however it is used to estimate the number of awards expected to vest. On exercise of options by the employees, the parent Company issues new shares.
The weighted average exercise price is disclosed in dollars as this is the currency in which the options are exercisable.
The fair value of the share options have been estimated using the Black-Scholes model, being a common valuation method for valuing European style options.
The ISO scheme has resulted in a capital contribution reserve in the US subsidiary accounts, whilst an increase in investment is recognised in the parent company accounts. The strike price is determined by a third party valuation exercise conducted in accordance with Section 409A of the Internal Revenue Code.
2021
2021
Number
Price ($)
Outstanding at 1 January 2021
-
-
Granted
346,480
1.36
Forfeited
(23,692)
4.28
Outstanding at 31 December 2021
322,788
1.26
Exercisable at 31 December 2021
2,301
1.80
The options outstanding at 31 December 2021 had an exercise price ranging from £1.8 to £5.59, and a remaining contractual life of 3 years.
Group ($)
Company ($)
Expenses recognised in the period
Arising from equity settled share based payment transactions
124,395
124,395
The options outstanding at 31 December 2021 had an exercise price ranging from £0.65 to 0.0149, and a remaining contractual life of 4 years.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
21
Share-based payment transactions (continued)
Page 42
Growth Share Plan
The parent Company also operates a growth share scheme, under which employees are given the opportunity to purchase Growth shares. Growth shares allow employees to participate in the growth of the company above a hurdle valuation, which is set as the market value of the company at the date of grant. Similar to the EMI scheme, the shares are subject to employment vesting conditions.
During the reporting period, no tranches of shares have been issued, however as the vesting period begins from an employees start date, a share based payment charge has been recognised in the reporting period in respect of employees who started employment prior to 31 December 2021.
22
Share capital
Group and company
2021
2020
2021
2020
Ordinary share capital
Number
Number
$
$
Issued and fully paid
Ordinary shares of of 0.01p each
31,660,000
20,044,000
3,166
2,520
The ordinary shares are denominated in Sterling. During the year 11,616,000 shares were issued with a nominal value of £0.0001 each.
On 2 February 2021 the parent company allotted 11,900 ordinary shares for £0.0945 each with a nominal value of £0.0001. On 11 June 2021 the parent company allotted 627,562 ordinary shares for £6.46 each with a nominal value of £0.0001, 3,433,388 ordinary shares for £10.11 each with a nominal value of £0.0001 and 502,361 ordinary shares for £8.07 each with a nominal value of £0.0001. On 4 October 2021 the parent company allotted 2,600 ordinary shares for £0.0945 each with a nominal value of £0.0001.
23
Reserves
Equity reserve
The equity reserve recognises all share based payment related balances.
Other reserves
Other reserves recognises all OCI balances in relation to foreign exchange.
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
Page 43
24
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2021
2020
2021
2020
$
$
$
$
Within one year
250,000
515,107
-
421,655
Between two and five years
-
216,464
-
216,464
250,000
731,571
-
638,119
25
Events after the reporting date
On 21 April 2022 the group completed a Series C fundraise, generating $100m in funding through share capital.
26
Cash absorbed by group operations
2021
2020
$
$
Loss for the year after tax
(14,540,550)
(2,279,197)
Adjustments for:
Taxation credited
(460,622)
(406,132)
Finance costs
1
Investment income
(28,965)
(12,079)
Loss on disposal of tangible fixed assets
18,341
-
Depreciation and impairment of tangible fixed assets
147,012
96,024
Other gains and losses
2,886,494
-
Equity settled share based payment expense
346,280
50,787
Movements in working capital:
Increase in debtors
(2,723,892)
(562,977)
Increase in creditors
1,239,462
317,084
Increase/(decrease) in deferred income
5,702,265
(104,905)
Cash absorbed by operations
(7,414,175)
(2,901,394)
Codat Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
Page 44
27
Analysis of changes in net funds - group
1 January 2021
Cash flows
Exchange rate movements
31 December 2021
$
$
$
$
Cash at bank and in hand
14,110,778
35,391,369
(2,062,087)
47,440,060
2021-12-31
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