Registered number: 4124971
LEADING QUALITY ASSURANCE LIMITED
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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LEADING QUALITY ASSURANCE LIMITED
Company Information
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Chartered Accountants and Statutory Auditors
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LEADING QUALITY ASSURANCE LIMITED
Registered number: 4124971
Balance sheet
As at 31 December 2022
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the profit and loss account in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 September 2023.
The notes on pages 2 to 10 form part of these financial statements.
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LEADING QUALITY ASSURANCE LIMITED
Notes to the financial statements
For the Year Ended 31 December 2022
Leading Quality Assurance Limited is a private company limited by shares and is registered and incorporated in England and Wales. The registered office is 2 Victoria Works, Fairway, Orpington, Kent, BR5 1EG.
The principal activity of the company continued to be that of hotel inspection.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.
The following principal accounting policies have been applied:
The financial statements have been prepared on a going concern basis despite an excess of liabilities over total assets of £7,443,570 due to the impact of COVID-19 on the company's activity in 2020 and 2021. These circumstances, extraordinary in nature and extent, had significant direct and indirect repercussions on economic activity in general and on the company's activities in those years. There has been significant improvement in activity in 2022 and the company made a profit for the year of £73,944.
The directors consider the going concern basis to be appropriate since the company's ultimate controlling party has confirmed that it will provide the company with whatever financial support may be necessary in order to enable to the company to meet its liabilities and commitments as they fall due in the foreseeable future.
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LEADING QUALITY ASSURANCE LIMITED
Notes to the financial statements
For the Year Ended 31 December 2022
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
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 except when deferred in other comprehensive income as qualifying cash flow hedges.
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.
In respect of long-term contracts and contracts for ongoing services, turnover represents the value of work done during the year, which includes estimates of amounts not invoiced. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Research and development expenditure is written off against profits in the year in which it is incurred.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Profit and loss account in the same period as the related expenditure.
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LEADING QUALITY ASSURANCE LIMITED
Notes to the financial statements
For the Year Ended 31 December 2022
2.Accounting policies (continued)
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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 balance sheet 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 balance sheet 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 balance sheet date.
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LEADING QUALITY ASSURANCE LIMITED
Notes to the financial statements
For the Year Ended 31 December 2022
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Profit and loss account over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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Intellectual Property Rights
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Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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LEADING QUALITY ASSURANCE LIMITED
Notes to the financial statements
For the Year Ended 31 December 2022
2.Accounting policies (continued)
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
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.
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The average monthly number of employees, including directors, during the year was 42 (2021 - 38).
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LEADING QUALITY ASSURANCE LIMITED
Notes to the financial statements
For the Year Ended 31 December 2022
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Intellectual Property Rights
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LEADING QUALITY ASSURANCE LIMITED
Notes to the financial statements
For the Year Ended 31 December 2022
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Amounts owed by group undertakings
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Corporation tax recoverable
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LEADING QUALITY ASSURANCE LIMITED
Notes to the financial statements
For the Year Ended 31 December 2022
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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The bank loan is secured by way of a fixed and floating charge over all property and assets of the company.
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Allotted, called up and fully paid
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55 (2021 - 55) Ordinary A shares of £1.00 each
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45 (2021 - 45) Ordinary B shares of £1.00 each
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LEADING QUALITY ASSURANCE LIMITED
Notes to the financial statements
For the Year Ended 31 December 2022
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Commitments under operating leases
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At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The company has adopted the exemption permitted by paragraph 33.1A of FRS 102 and has not disclosed transactions with other group members, which are wholly owned subsidiaries.
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The parent company of the smallest group of which Leading Quality Assurance Limited is a member and consolidated accounts are prepared is LQA Holdingco LLC. Their registered office is 301 Commerce St, Suite 1600, Fort Worth, TX 76102.
The auditor's report on the financial statements for the year ended 31 December 2022 was unqualified.
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In their report, the auditor emphasised the following matter without qualifying their report:
Attention was drawn to the preparation of the accounts on a going concern basis, as the company had an
excess of liabilities over assets at the year end. The ultimate controlling party has stated that it will provide any necessary financial support and funding required in order to enable the company to meet its'
liabilities and commitments as they fall due for at least the next twelve months. Without this support, the
ability of the company to continue as a going concern is not certain. Please refer to note 2.2
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The audit report was signed on 29 September 2023 by Andrew Burch (Senior statutory auditor) on behalf of Sayers Butterworth LLP.
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