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Registered number: 4124971










LEADING QUALITY ASSURANCE LIMITED
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022




















 
LEADING QUALITY ASSURANCE LIMITED
 
 
Company Information


Directors
M Bornitz 
E Hooper 




Registered number
4124971



Registered office
2 Victoria Works
Fairway

Orpington

Kent

BR5 1EG




Independent auditor
Sayers Butterworth LLP
Chartered Accountants and Statutory Auditors

3rd Floor

12 Gough Square

London

EC4A 3DW





 
LEADING QUALITY ASSURANCE LIMITED
Registered number: 4124971

Balance sheet
As at 31 December 2022

2022
2021
Note
£
£

Fixed assets
  

Intangible assets
 4 
22,130
29,609

Tangible assets
 5 
37,082
4,593

  
59,212
34,202

Current assets
  

Debtors: amounts falling due within one year
 6 
2,945,567
1,476,858

Cash at bank and in hand
  
647,571
224,202

  
3,593,138
1,701,060

Creditors: amounts falling due within one year
 7 
(10,966,753)
(9,073,609)

Net current liabilities
  
 
 
(7,373,615)
 
 
(7,372,549)

Total assets less current liabilities
  
(7,314,403)
(7,338,347)

Creditors: amounts falling due after more than one year
 8 
(129,167)
(179,167)

  

Net liabilities
  
(7,443,570)
(7,517,514)


Capital and reserves
  

Called up share capital 
 9 
100
100

Profit and loss account
  
(7,443,670)
(7,517,614)

  
(7,443,570)
(7,517,514)


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.




E Hooper
Director

The notes on pages 2 to 10 form part of these financial statements.
Page 1

 
LEADING QUALITY ASSURANCE LIMITED
 
 
 
Notes to the financial statements
For the Year Ended 31 December 2022

1.


General information

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

 
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 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:

 
2.2

Going concern

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. 

Page 2

 
LEADING QUALITY ASSURANCE LIMITED
 
 
 
Notes to the financial statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)

 
2.3

Foreign currency translation

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.

 
2.4

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.
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.

 
2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.6

Research and development

Research and development expenditure is written off against profits in the year in which it is incurred.

 
2.7

Government grants

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.

Page 3

 
LEADING QUALITY ASSURANCE LIMITED
 
 
 
Notes to the financial statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)

 
2.8

Finance costs

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.

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.10

Taxation

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.

Page 4

 
LEADING QUALITY ASSURANCE LIMITED
 
 
 
Notes to the financial statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)

 
2.11

Intangible assets

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:

Intellectual Property Rights
-
10 years
Customer Contracts
-
6-30 months

 
2.12

Tangible fixed 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.

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:

Leasehold improvements
-
33% straight line
Fixtures & Fittings
-
25% - 33% straight line

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.

 
2.13

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.

Page 5

 
LEADING QUALITY ASSURANCE LIMITED
 
 
 
Notes to the financial statements
For the Year Ended 31 December 2022

2.Accounting policies (continued)

 
2.14

Cash and cash equivalents

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.

 
2.15

Creditors

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.

 
2.16

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.

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.


3.


Employees

The average monthly number of employees, including directors, during the year was 42 (2021 - 38).

Page 6

 
LEADING QUALITY ASSURANCE LIMITED
 
 
 
Notes to the financial statements
For the Year Ended 31 December 2022

4.


Intangible assets




Goodwill
Intellectual Property Rights
Customer contracts
Total

£
£
£
£



Cost


At 1 January 2022
1,005,459
74,790
552,549
1,632,798



At 31 December 2022

1,005,459
74,790
552,549
1,632,798



Amortisation


At 1 January 2022
1,005,459
45,181
552,549
1,603,189


Charge for the year
-
7,479
-
7,479



At 31 December 2022

1,005,459
52,660
552,549
1,610,668



Net book value



At 31 December 2022
-
22,130
-
22,130



At 31 December 2021
-
29,609
-
29,609



Page 7

 
LEADING QUALITY ASSURANCE LIMITED
 
 
 
Notes to the financial statements
For the Year Ended 31 December 2022

5.


Tangible fixed assets





Land and buildings
Plant & machinery
Total

£
£
£



Cost or valuation


At 1 January 2022
34,094
121,820
155,914


Additions
-
56,601
56,601



At 31 December 2022

34,094
178,421
212,515



Depreciation


At 1 January 2022
34,094
117,227
151,321


Charge for the year
-
24,112
24,112



At 31 December 2022

34,094
141,339
175,433



Net book value



At 31 December 2022
-
37,082
37,082



At 31 December 2021
-
4,593
4,593


6.


Debtors

2022
2021
£
£


Trade debtors
1,829,114
858,753

Amounts owed by group undertakings
414,028
263,005

Other debtors
540,453
88,522

Corporation tax recoverable
161,972
266,578

2,945,567
1,476,858


Page 8

 
LEADING QUALITY ASSURANCE LIMITED
 
 
 
Notes to the financial statements
For the Year Ended 31 December 2022

7.


Creditors: Amounts falling due within one year

2022
2021
£
£

Bank loans
50,000
50,000

Trade creditors
59,747
30,786

Amounts owed to group undertakings
9,272,507
7,049,076

Other taxation and social security
83,402
41,914

Other creditors
442,579
913,154

Accruals and deferred income
1,058,518
988,679

10,966,753
9,073,609



8.


Creditors: Amounts falling due after more than one year

2022
2021
£
£

Bank loans
129,167
179,167

129,167
179,167


The bank loan is secured by way of a fixed and floating charge over all property and assets of the company.


9.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



55 (2021 - 55) Ordinary A shares of £1.00 each
55
55
45 (2021 - 45) Ordinary B shares of £1.00 each
45
45

100

100


Page 9

 
LEADING QUALITY ASSURANCE LIMITED
 
 
 
Notes to the financial statements
For the Year Ended 31 December 2022

10.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£


Not later than 1 year
23,005
27,000

Later than 1 year and not later than 5 years
-
23,005

23,005
50,005


11.


Related party transactions

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.


12.


Parent undertaking

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


13.


Auditor's information

The auditor's report on the financial statements for the year ended 31 December 2022 was unqualified.

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

The audit report was signed on 29 September 2023 by Andrew Burch (Senior statutory auditor) on behalf of Sayers Butterworth LLP.

 
Page 10