Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-31truetruetruetruetruetrue2023-01-01false6360truefalsefalse 11334866 2023-01-01 2023-12-31 11334866 2022-01-01 2022-12-31 11334866 2023-12-31 11334866 2022-12-31 11334866 2022-01-01 11334866 1 2023-01-01 2023-12-31 11334866 1 2022-01-01 2022-12-31 11334866 2 2023-01-01 2023-12-31 11334866 2 2022-01-01 2022-12-31 11334866 5 2023-01-01 2023-12-31 11334866 5 2022-01-01 2022-12-31 11334866 1 2023-01-01 2023-12-31 11334866 e:Director1 2023-01-01 2023-12-31 11334866 e:Director2 2023-01-01 2023-12-31 11334866 e:Director3 2023-01-01 2023-12-31 11334866 e:RegisteredOffice 2023-01-01 2023-12-31 11334866 d:FurnitureFittings 2023-01-01 2023-12-31 11334866 d:FurnitureFittings 2023-12-31 11334866 d:FurnitureFittings 2022-12-31 11334866 d:FurnitureFittings d:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11334866 d:ComputerEquipment 2023-01-01 2023-12-31 11334866 d:ComputerEquipment 2023-12-31 11334866 d:ComputerEquipment 2022-12-31 11334866 d:ComputerEquipment d:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11334866 d:OtherPropertyPlantEquipment 2023-01-01 2023-12-31 11334866 d:OtherPropertyPlantEquipment 2023-12-31 11334866 d:OtherPropertyPlantEquipment 2022-12-31 11334866 d:OtherPropertyPlantEquipment d:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11334866 d:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11334866 d:CurrentFinancialInstruments 2023-12-31 11334866 d:CurrentFinancialInstruments 2022-12-31 11334866 d:Non-currentFinancialInstruments 2023-12-31 11334866 d:Non-currentFinancialInstruments 2022-12-31 11334866 d:CurrentFinancialInstruments d:WithinOneYear 2023-12-31 11334866 d:CurrentFinancialInstruments d:WithinOneYear 2022-12-31 11334866 d:ReportableOperatingSegment1 2023-01-01 2023-12-31 11334866 d:ReportableOperatingSegment1 2022-01-01 2022-12-31 11334866 f:UnitedKingdom 2023-01-01 2023-12-31 11334866 f:UnitedKingdom 2022-01-01 2022-12-31 11334866 f:RestEuropeOutsideUK 2023-01-01 2023-12-31 11334866 f:RestEuropeOutsideUK 2022-01-01 2022-12-31 11334866 d:UKTax 2023-01-01 2023-12-31 11334866 d:UKTax 2022-01-01 2022-12-31 11334866 d:ShareCapital 2023-01-01 2023-12-31 11334866 d:ShareCapital 2023-12-31 11334866 d:ShareCapital 2022-01-01 2022-12-31 11334866 d:ShareCapital 2022-12-31 11334866 d:ShareCapital 2022-01-01 11334866 d:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 11334866 d:RetainedEarningsAccumulatedLosses 2023-12-31 11334866 d:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 11334866 d:RetainedEarningsAccumulatedLosses 2022-12-31 11334866 d:RetainedEarningsAccumulatedLosses 2022-01-01 11334866 e:OrdinaryShareClass1 2023-01-01 2023-12-31 11334866 e:OrdinaryShareClass1 2022-01-01 2022-12-31 11334866 e:OrdinaryShareClass1 2023-12-31 11334866 e:OrdinaryShareClass1 2022-12-31 11334866 e:FRS102 2023-01-01 2023-12-31 11334866 e:Audited 2023-01-01 2023-12-31 11334866 e:FullAccounts 2023-01-01 2023-12-31 11334866 e:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 11334866 2 2023-01-01 2023-12-31 11334866 d:AcceleratedTaxDepreciationDeferredTax 2023-12-31 11334866 d:AcceleratedTaxDepreciationDeferredTax 2022-12-31 11334866 d:TaxLossesCarry-forwardsDeferredTax 2023-12-31 11334866 d:TaxLossesCarry-forwardsDeferredTax 2022-12-31 11334866 g:USDollar 2023-01-01 2023-12-31 xbrli:shares iso4217:GBP xbrli:pure



















Cloudinary UK Ltd

Registered number: 11334866
Annual Report
For the year ended 31 December 2023

 
CLOUDINARY UK LTD
 
 
COMPANY INFORMATION


Directors
I Lahan 
T Lev-Ami 
N Soferman 




Registered number
11334866



Registered office
30 Old Bailey

London

United Kingdom

EC4M 7AU




Independent auditor
Forvis Mazars LLP
Chartered Accountants & Statutory Auditor

90 Victoria Street

Bristol

BS1 6DP





 
CLOUDINARY UK LTD
 

CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 5
Independent Auditor's Report
 
6 - 9
Statement of Comprehensive Income
 
10
Statement of Financial Position
 
11
Statement of Changes in Equity
 
12
Notes to the Financial Statements
 
13 - 25

 
CLOUDINARY UK LTD
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their Strategic Report and the audited financial statements of Cloudinary UK Ltd ("the company") for the year ended 31 December 2023.

Business review
 
The company's turnover has increased this year to $8,012,668 (2022: $7,379,572).
Primary factors that contributed to turnover growth include: 

Providing value and meeting the evolving needs of our existing customers leads to increased consumption and revenue.
Adding new customers: We continue to invest in sales activities. With more AEs in 2023, we were able to acquire more enterprise customers. 
Organic growth of existing customers combined with acquisition of new ones, our business develops a robust and diversified revenue base.

Principal risks and uncertainties
 
The company, in carrying out its business, faces a number of risks and uncertainties including price, liquidity and foreign exchange risk.
Price risk
Price risk is the risk that changes in prices have the potential to impact on the profitability of the company. The company does not consider that it is materially exposed to price risk as they are usually solid and identical for the entire industry.
Liquidity risk
The company funds its day-to-day operations from operating cash flow. Intercompany loans within the Group are also available if needed from time to time. Risk is managed through the use of detailed cash flow forecasts and the application of strict cash management policies to ensure that the company maintains sufficient funds for operations.
Foreign exchange risk
The company is exposed to foreign exchange risk where its revenues and purchases are denominated on currencies other than its functional currency. Foreign exchange risk is not actively managed but management consider there to be an element of natural hedging in foreign exchange denominated payables and receivables.

Business risks

UK businesses are currently facing many uncertainties such as the consequences of Brexit, Covid 19, environmental sustainability. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working. The directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that these are non-adjusting events with the greatest impact on the business expected to be from the economic ripple effect on the global economy. The directors have taken account of these potential impacts in their going concern assessment.
The company continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.

- 1 -

 
CLOUDINARY UK LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial key performance indicators
 
The company considers that its key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover. Total turnover has shown growth during the year to $8,012,668 (2022: $7,379,572) and the company has maintained its strong financial position at the end of the year.


This report was approved by the board and signed on its behalf by:



T Lev-Ami
Director

Date: 12 September 2024
- 2 -

 
CLOUDINARY UK LTD
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the audited financial statements for the year ended 31 December 2023.

Principal activity

The principal activity of the company is image and video management for both web and mobile applications. 

Directors

The directors who served during the year and to the date of this report were:

I Lahan 
T Lev-Ami 
N Soferman 

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:


select suitable accounting policies for the company's financial statements 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 financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors which were made during the year and remain in place at the date of this report. No claim or notice of a claim in respect of these indemnities has been received in the year.

- 3 -

 
CLOUDINARY UK LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Going concern

The financial statements are prepared on a going concern basis. The company remains assured of the financial support by the parent company. The directors have received confirmation that the parent company will continue to support the company and provide it with adequate funds when necessary to enable it to meet its debts as they fall due in the foreseeable future. On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis.

Economic impact of global events

UK businesses are facing many uncertainties and challenges caused by political, economic, social, technological, legal and environmental factors. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
The directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that the greatest impact on the business is expected to be from the economic ripple effect on the global economy. The directors have taken account of these potential impacts in their going concern assessment.
The company continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.

Future developments

The directors do not anticipate any significant developments for the company during the coming year. 
The directors remain confident that the company is well placed to take advantage of opportunities as they arise and to continue its profitable growth path.

Matters covered in the Strategic Report

The company has chosen in accordance with Companies Act 2006, s414C(11) to set out in the company's Strategic Report information required by Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. Certain matters which are required to be disclosed in the Directors’ Report have been omitted as they are included in the Strategic Report.

Provision of information to the auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware; and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the company since the year end.

- 4 -

 
CLOUDINARY UK LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Auditor

The auditor, Forvis Mazars LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf by:
 




T Lev-Ami
Director

Date: 12 September 2024

- 5 -

 
CLOUDINARY UK LTD
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CLOUDINARY UK LTD
 

Opinion

We have audited the financial statements of Cloudinary UK Ltd (the ‘company’) for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies. 
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 company’s affairs as at 31 December 2023 and of its 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.

Basis for opinion

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 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 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.

Other information

The other information comprises the information included in the Directors' report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. 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.
- 6 -

 
CLOUDINARY UK LTD
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CLOUDINARY UK LTD
 

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' Report 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 light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

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, or returns adequate for our audit have not been received from branches not visited by us; or
the 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.

- 7 -

 
CLOUDINARY UK LTD
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CLOUDINARY UK LTD
 

Responsibilities of Directors

As explained more fully in the directors' responsibilities statement set out on page 3, 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 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 intend either to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the 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.
 
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
 
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. 

Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation and anti-money laundering regulation.

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.  

We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.
- 8 -

 
CLOUDINARY UK LTD
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CLOUDINARY UK LTD
 

In addition, we evaluated the directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, revenue recognition (which we pinpointed to the cut off assertion) and significant one-off or unusual transactions. 

Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of the audit report

This report is made solely to the 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 company's members those matters we are required to state to them in an auditor's 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 company and the company's members as a body for our audit work, for this report, or for the opinions we have formed.




Jonathan Marchant (Senior statutory auditor)  
For and on behalf of Forvis Forvis Mazars LLP
Chartered Accountants and Statutory Auditor 
90 Victoria Street
Bristol
BS1 6DP

12 September 2024
- 9 -

 
CLOUDINARY UK LTD
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
Restated 2022
Note
$
$

  

Turnover
 4 
8,012,668
7,379,572

Cost of sales
  
(6,689,721)
(6,331,673)

Gross profit
  
1,322,947
1,047,899

Operational expenses
  
(1,051,894)
(446,252)

Operating profit
 5 
271,053
601,647

Interest receivable and similar income
 7 
1,033
-

Profit before tax
  
272,086
601,647

Tax on profit
 8 
(523,573)
(210,702)

(Loss)/profit for the financial year
  
(251,487)
390,945

Other comprehensive income
  
-
-

Total comprehensive (loss)/income for the year
  
(251,487)
390,945

The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.

The notes on pages 13 to 25 form part of these financial statements.

- 10 -

 
CLOUDINARY UK LTD
REGISTERED NUMBER: 11334866

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
$
$

Fixed assets
  

Tangible assets
 9 
118,979
175,503

  
118,979
175,503

Current assets
  

Debtors: amounts falling due after more than one year
 10 
833,855
238,321

Debtors: amounts falling due within one year
 10 
9,254,584
11,034,265

Cash at bank and in hand
 11 
286,720
265,351

  
10,375,159
11,537,937

Creditors: amounts falling due within one year
 12 
(10,272,862)
(11,224,852)

Net current assets
  
 
 
102,297
 
 
313,085

Total assets less current liabilities
  
221,276
488,588

Provisions for liabilities
  

Deferred tax
 13 
(21,767)
(37,592)

  
 
 
(21,767)
 
 
(37,592)

Net assets
  
199,509
450,996


Capital and reserves
  

Called up share capital 
 14 
1,290
1,290

Profit and loss account
  
198,219
449,706

Total equity
  
199,509
450,996


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 



T Lev-Ami
Director

Date: 12 September 2024

The notes on pages 13 to 25 form part of these financial statements.

- 11 -

 
CLOUDINARY UK LTD
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

$
$
$


At 1 January 2022
1,290
58,761
60,051


Comprehensive income for the year

Profit for the year
-
390,945
390,945


Other comprehensive income for the year
-
-
-


Total comprehensive income for the year
-
390,945
390,945



At 1 January 2023
1,290
449,706
450,996


Comprehensive loss for the year

Loss for the year
-
(251,487)
(251,487)


Other comprehensive income for the year
-
-
-


Total comprehensive loss for the year
-
(251,487)
(251,487)


At 31 December 2023
1,290
198,219
199,509


The notes on pages 13 to 25 form part of these financial statements.
- 12 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Cloudinary UK Ltd is a private company limited by shares and incorporated in England and Wales. The company's registered number is 11334866. The address of its registered office is 30 Old Bailey, London, United Kingdom, EC4M 7AU.
The principal activity of the company is image and video management for both web and mobile applications. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3).

The financial statements have been presented in United States Dollar as this is the currency of the primary economic environment in which the group operates and is rounded to the nearest dollar. 

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b), 12.29A and 12.30;
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Cloudinary Ltd as at 31 December 2023 and these financial statements may be obtained from 20 Bert Aharon, Petah Tikva, Israel, 4951400.

- 13 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Going concern

The financial statements are prepared on a going concern basis. The company remains assured of the financial support by the parent company. The directors have received confirmation that the parent company will continue to support the company and provide it with adequate funds when necessary to enable it to meet its debts as they fall due in the foreseeable future. On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis.

 
2.4

Foreign currency translation

Functional and presentation currency

The company's functional and presentation currency is United States Dollar.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within 'operational expenses'.

 
2.5

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Rendering of services

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of turnover can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Commissions paid to acquire contracts are capitalised when the contract is secured, the amounts can be measured reliably, and are recoverable through performance of the contract.

- 14 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.6

Interest receivable and similar income

Interest receivable and similar income is recognised in profit or loss using the effective interest method.

 
2.7

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in other creditors as a liability in the Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds.

 
2.8

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.

- 15 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.9

Current and deferred taxation

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

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

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.10

Tangible assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Fixtures and fittings
-
between 5 and 10 years
Computer equipment
-
over 3 years
Electronic equipment
-
between 5 and 10 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

- 16 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.11

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.12

Cash at bank and in hand

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.13

Creditors: amounts falling due within one year

Short-term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.14

Financial instruments

The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's Statement of Financial Position 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

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
 
- 17 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.14
Financial instruments (continued)

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

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

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.

- 18 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In applying the company’s accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors’ judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.
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, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
3.1 Critical judgements in applying the company’s accounting policies
The directors do not consider there to be any critical judgements made in the process of applying the company’s accounting policies.
3.2 Key sources of estimation uncertainty
The directors do not consider there to be any key sources of estimation uncertainty.


4.


Turnover

An analysis of turnover by class of business is as follows:


2023
Restated 2022
$
$

Rendering of services
8,012,668
7,379,572


Analysis of turnover by country of destination:

2023
Restated 2022
$
$

United Kingdom
7,730,247
7,123,572

Rest of Europe
282,421
256,000

8,012,668
7,379,572


- 19 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

5.


Operating profit

The operating profit is stated after charging/(crediting):

2023
2022
$
$

Depreciation on tangible assets
73,055
66,583

Exchange losses/(gains)
738,208
(367,358)

Share-based payment
1,759,996
2,231,527

Fees payable to the company's auditor for the audit of the company's financial statements
13,125
12,500


6.


Employees

Staff costs were as follows:


2023
2022
$
$

Wages and salaries
10,239,482
10,701,551

Social security costs
1,266,437
1,345,538

Cost of defined contribution scheme
380,626
365,447

11,886,545
12,412,536


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Directors
3
3



Employees
60
57

63
60

The directors' remuneration is borne by the ultimate parent company.
Management considers the directors and senior management to be the key management personnel of the company.


7.


Interest receivable and similar income

2023
2022
$
$


Other interest receivable
1,033
-

- 20 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Taxation


2023
2022
$
$

Corporation tax


Current tax on profits for the year
415,456
201,883

Adjustments in respect of previous periods
123,942
-


Total current tax
539,398
201,883

Deferred tax


Origination and reversal of timing differences
(6,132)
8,819

Adjustments in respect of prior periods
(9,693)
-

Total deferred tax
(15,825)
8,819


Tax on profit
523,573
210,702

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 23.52% (2022:19%). The differences are explained below:

2023
2022
$
$


(Loss)/profit before tax
272,086
601,647


(Loss)/profit before tax multiplied by standard rate of corporation tax in the UK of 23.52% (2022: 19%)
63,995
114,313

Effects of:


Fixed asset differences
-
(5,836)

Expenses not deductible for tax purposes
414,352
428,919

Other permanent differences
(78,545)
(324,648)

Adjustments to tax charge in respect of prior periods
113,350
(1,258)

Adjustments to tax charge in respect of prior periods - deferred tax
(9,693)
-

Remeasurement of deferred tax for changes in tax rates
(363)
2,117

Current tax (prior period) exchange difference arising on movement between opening and closing spot rates
10,592
1,257

Current tax (current period) exchange difference arising on movement between opening and closing spot rates
9,885
(4,162)

Total tax charge for the year
523,573
210,702

- 21 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
8.Taxation (continued)


Factors that may affect future tax charges

From 1 April 2023, the rate of corporation tax in the United Kingdom has increased from 19% to 25%. Companies with profits of £50,000 or less are continuing to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase. Deferred tax recognised during the year has been calculated at 25%.


9.


Tangible assets





Fixtures and fittings
Computer equipment
Electronic equipment
Total

$
$
$
$



Cost


At 1 January 2023
11,847
229,762
70,074
311,683


Additions
-
4,692
11,990
16,682


Disposals
-
(4,534)
-
(4,534)



At 31 December 2023

11,847
229,920
82,064
323,831



Depreciation


At 1 January 2023
2,003
119,593
14,584
136,180


Charge for the year
1,680
59,687
11,688
73,055


Disposals
-
(4,383)
-
(4,383)



At 31 December 2023

3,683
174,897
26,272
204,852



Net book value



At 31 December 2023
8,164
55,023
55,792
118,979



At 31 December 2022
9,844
110,169
55,490
175,503

- 22 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Debtors

2023
2022
$
$

Due after more than one year

Prepayments and accrued income
833,855
238,321


Prepayments and accrued income due after more than one year includes deferred commission of $757,467 (2022: $114,598) and rent deposits of $76,388 (2022: $123,723).

2023
2022
$
$

Due within one year

Trade debtors
289,306
443,472

Amounts owed by group undertakings
8,682,905
10,417,042

Prepayments and accrued income
282,373
173,751

9,254,584
11,034,265


Amounts owed by group undertakings are unsecured, interest-free and payable on demand. 


11.


Cash at bank and in hand

2023
2022
$
$

Cash at bank and in hand
286,720
265,351



12.


Creditors: amounts falling due within one year

2023
2022
$
$

Trade creditors
175,772
203,587

Amounts owed to group undertakings
7,569,149
8,138,036

Corporation tax
415,470
79,451

Other taxation and social security
515,366
848,156

Other creditors
-
65,385

Accruals and deferred income
1,597,105
1,890,237

10,272,862
11,224,852


Amounts owed to group undertakings are unsecured, interest-free and repayable on demand. 

- 23 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Deferred taxation




2023
2022


$

$






At beginning of year
(37,592)
(28,773)


Credited/(charged) to profit or loss
15,825
(8,819)



At end of year
(21,767)
(37,592)

The provision for deferred taxation is made up as follows:

2023
2022
$
$


Fixed asset timing differences
(29,745)
(43,986)

Short term timing differences
7,978
6,394

(21,767)
(37,592)


14.


Called up share capital

2023
2022
$
$
Allotted, called up and fully paid



1,290 (2022: 1,290) ordinary shares of $1 each
1,290
1,290


The company has one class of ordinary shares; each share has attached to it full voting, dividend and capital distribution rights.

15.


Share-based payments

The company has one type of shared based arrangement which is according to the parent company plan (Cloudinary Ltd. 2013 Share Incentive Plan). The plan provides for the grant of options to purchase ordinary shares of the parent company to employees and non-employees of the company at a purchase price as determined by the board of directors at the date of grant. The options vest according to the determination of the board of directors at the grant date (4 years vesting with 1 year cliff) and expire up to 10 years from the date of grant date. The settlement method is equity and the fair value of the share options at the grant date was calculated using the Black Scholes model, which is considered to be the most appropriate generally accepted valuation method of measuring fair value.
The company is part of a group payment arrangement and the expenses are reasonably allocated and charged to the profit or loss of the company.

- 24 -

 
CLOUDINARY UK LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Prior year adjustment

During the year, the directors have reviewed the classification of transfer pricing adjustments in the comparative period. After careful consideration, the directors believe that the balance totalling $9,744,689 should be recorded as decreasing operational expenses rather than increasing turnover, since they represent the participation of the parent company in its subsidiaries' marketing and sales expenses. This reclassification has no impact on the profit and loss or net reserve position of the company.


17.


Contingent liabilities

On 5 January 2022, a charge was registered at companies house in relation to the credit card limit increasing from £15,000 to £30,000. On 15 June 2022 an additional £10,000 was added, increasing the credit card limit to £40,000. On 7 February 2024, the charge was transferred from Silicon Valley Bank to HSBC Innovation Banking. This charge is pledged against the current accounts of the company. The maximum value of this contingent liability as at 31 December 2023 was £40,000 (2022: £40,000).


18.


Pension commitments

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. The pension cost charge represents contributions payable by the company to the fund and amounted to $380,626 (2022: $365,447). Contributions payable to the fund at the year end amounted to $nil (2022: $65,385).


19.


Related party transactions

The company has taken advantage of the exemption under paragraph 33.1A of Financial Reporting Standard 102 not to disclose transactions with other wholly owned members of the group.


20.


Post balance sheet events

There have been no significant events affecting the company since the year end.


21.


Controlling party

The immediate and ultimate parent undertaking is Cloudinary Ltd, a company incorporated in Israel. Cloudinary Ltd is also the parent undertaking of the smallest and largest group which consolidates the financial information of the company. Copies of the consolidated financial statements may be obtained from its registered office, 20 Bert Aharon, Petah Tikva, Israel, 4951400. 

- 25 -