Company registration number 09522753 (England and Wales)
QUALITY CLOUDS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
QUALITY CLOUDS LTD
COMPANY INFORMATION
Directors
Mr A Franquesa Ribe
Mr A Gomez
Mr A M Hurtado
Mr J Mcadam
Mr A Serle
(Appointed 21 August 2023)
Secretary
MBM Secretarial Services Limited
Company number
09522753
Registered office
20-22 Wenlock Road
London
N1 7GU
Auditor
Carston Accountants
Tudor House
16 Cathedral Road
Cardiff
CF11 9LJ
Accountants
Hentons
Stag House
Old London Road
Hertford
Hertfordshire
SG13 7LA
QUALITY CLOUDS LTD
CONTENTS
Page
Directors' report
1 - 3
Independent auditor's report
4 - 6
Group income statement
7
Group statement of comprehensive income
8
Group statement of financial position
9 - 10
Group statement of changes in equity
11
Group statement of cash flows
12
Notes to the group financial statements
13 - 29
Parent company statement of financial position
30
Parent company statement of changes in equity
31
Notes to the parent company financial statements
32 - 35
QUALITY CLOUDS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Principal activities

The principal activity of the group continued to be that of computer software support and development.

Results and dividends

The results for the year are set out on page 7.

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:

Mr A Franquesa Ribe
Mr A Gomez
Mr A M Hurtado
Mr J Mcadam
Mr M R Sutherland
(Resigned 27 July 2023)
Mr A Serle
(Appointed 21 August 2023)
Research and development

The group and its subsidiary company continue to undertake research and development activities to further assist in enhancing the wider software market.

Post reporting date events

Information relating to events since the end of the year is given in the notes to the financial statements.

Auditor

SBL Accountants were appointed as auditor and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

QUALITY CLOUDS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
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 group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom and have also chosen to prepare the parent company financial statements in accordance with Financial Reporting Standard (FRS) 101 'Reduced Disclosure Framework'. 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 the group financial statements, International Accounting Standard 1 requires that directors:

 

In preparing the parent company financial statements, the directors are required to:

 

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 enable them to ensure that the financial statements comply with the Companies Act 2006. They 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.

Statement of disclosure to auditor

Each director in office at the date of approval of this annual report confirms that:

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

QUALITY CLOUDS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Going concern

The financial statements are prepared on a going concern basis as the directors are satisfied that the Company has the ability to continue in business for the foreseeable future.

During the year ended 31 December 2023, the group incurred a loss of £4,159,209 and as of that date the group's accumulated losses increased to £10,365,591. These losses have been financed by continued capital investments which result in net assets of £1,435,811 being reported within the December 2023 group statement of financial position.

As per note 27, the Company raised £3,764,861 of new equity on 5 August 2024, which will fund continuing growth and operations.

67% of Group liabiities at 31st December 2023 are Deferred Income and for the Company Deferred Income and Group Creditors are 96% of liabilities.

In making the going concern assessment the directors have considered future projection of operating performance, cashflow forecasts, and the Company's ability to raise additional equity investment, which is evidenced by its strong track record in attracting new investment, such as the new equity raised on 5 August 2024 (see above).

 

In addition, the directors have reviewed the external risks and uncertainties that the Company faces and consider that this does not alter the going concern basis of preparing the financial statements.

Small companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

On behalf of the board
Mr A Serle
Director
13 September 2024
QUALITY CLOUDS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUALITY CLOUDS LTD
- 4 -
Opinion

We have audited the financial statements of Quality Clouds Ltd (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 December 2023 which comprise the group income statement, the group statement of comprehensive income, the group and parent company statement of financial position, the group and parent company statement of changes in equity, the group statement of cash flows and the group and parent company notes to the financial statements, including significant accounting policies.

 

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion:

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 group and 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.

Material uncertainty relating to going concern

We draw your attention to note 31 in the financial statements, which indicates that during the year ended 31 December 2023, the group incurred a loss of £4,159,209 and as of that date the group's accumulated losses increased to £10,365,591. These losses have been financed by continued capital investments which result in net assets of £1,435,811 being reported within the December 2023 group statement of financial position. As per note 27, the Company raised £3,764,861 of new equity on 5 August 2024, which will fund continuing growth and operations.

 

Our opinion is not modified in respect of this matter. 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.

 

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 annual 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. 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.

QUALITY CLOUDS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF QUALITY CLOUDS LTD
- 5 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in 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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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 parent 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

As part of our planning of the audit work required, we obtained an understanding of the legal and regulatory frameworks that are applicable to the entity via enquiries of the company’s management, carried out analytical procedures, held discussions amongst the management team and using knowledge of the sector determined that the most significant laws and regulations are those that relate to:

 

We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as International Financial Reporting Standards and the Companies Act 2006.

QUALITY CLOUDS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF QUALITY CLOUDS LTD
- 6 -

Based on the results of our risk assessment we designed our audit procedures to identify non-compliance with the laws and regulations and the fraud risks identified. This included enquiries with management to understand their policies and procedures for compliance with those regulations and we completed the following tests:

 

Based on the results of our risk assessment we designed our audit procedures to identify and to address material misstatements in relation to fraud. This included the risk of management bias and the risk of making inappropriate accounting entries, no significant issues were identified during our 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 maintained a risk of non-detection of irregularities, as these may involve collusions, forgery, intentional omissions, misrepresentations or the override of internal controls.

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.

Use of our 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.

Steven Davies (Senior Statutory Auditor)
For and on behalf of Carston Accountants
Chartered Accountants
Statutory Auditor
Tudor House
16 Cathedral Road
Cardiff
CF11 9LJ
13 September 2024
QUALITY CLOUDS LTD
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Revenue
4
2,162,206
1,586,478
Cost of sales
(229,176)
(43,268)
Gross profit
1,933,030
1,543,210
Other operating income
22
-
Administrative expenses
(6,518,703)
(3,797,208)
Operating loss
5
(4,585,651)
(2,253,998)
Investment revenues
8
43,132
493
Finance costs
9
(1,473)
(57,856)
Loss before taxation
(4,543,992)
(2,311,361)
Income tax income
10
384,783
246,701
Loss for the year
(4,159,209)
(2,064,660)
Profit for the financial year is all attributable to the owners of the parent company.

The income statement has been prepared on the basis that all operations are continuing operations.

The notes on pages 13 to 29 form part of these group financial statements.

QUALITY CLOUDS LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
£
£
Loss for the year
(4,159,209)
(2,064,660)
Other comprehensive income:
Items that may be reclassified to profit or loss
Currency translation differences:
- Translation (loss)/gain arising in the year
(11,379)
14,815
Total comprehensive income for the year
(4,170,588)
(2,049,845)
Total comprehensive income for the year is all attributable to the owners of the parent company.

The notes on pages 13 to 29 form part of these group financial statements.

QUALITY CLOUDS LTD
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
ASSETS
Non-current assets
Property, plant and equipment
11
32,853
21,200
Deferred tax asset
20
96,453
58,524
129,306
79,724
Current assets
Trade and other receivables
13
1,146,806
485,943
Current tax recoverable
347,307
208,923
Cash and cash equivalents
2,730,719
1,254,712
4,224,832
1,949,578
Total assets
4,354,138
2,029,302
EQUITY
Called up share capital
23
2
2
Share premium account
24
11,782,910
6,145,407
Share option reserve
25
16,700
-
Currency translation reserve
26
1,790
13,169
Retained earnings
(10,365,591)
(6,206,382)
Total equity
1,435,811
(47,804)
Non-controlling interests
-
0
-
0
Total equity
1,435,811
(47,804)
LIABILITIES
Non-current liabilities
Trade and other payables
19
517,708
237,884
Borrowings
15
36,299
57,377
554,007
295,261
Current liabilities
Trade and other payables
19
2,343,487
1,759,882
Current tax liabilities
-
0
1,163
Borrowings
15
20,833
20,800
2,364,320
1,781,845
Total liabilities
2,918,327
2,077,106
Total equity and liabilities
4,354,138
2,029,302

The notes on pages 13 to 29 form part of these group financial statements.

QUALITY CLOUDS LTD
GROUP STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
The financial statements were approved by the board of directors and authorised for issue on
11 September 2024
2024-09-13
and are signed on its behalf by:
Mr A Serle
Director
Company registration number 09522753 (England and Wales)
QUALITY CLOUDS LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium
Share option reserve
Currency translation reserve
Retained earnings
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2022
2
1,702,021
-
(1,646)
(4,141,722)
(2,441,345)
Year ended 31 December 2022:
Loss
-
-
-
-
(2,064,660)
(2,064,660)
Other comprehensive income:
Currency translation differences
-
-
-
14,815
-
0
14,815
Total comprehensive income
-
-
-
14,815
(2,064,660)
(2,049,845)
Transactions with owners:
Issue of share capital
23
-
0
4,443,386
-
-
-
4,443,386
Balance at 31 December 2022
2
6,145,407
-
13,169
(6,206,382)
(47,804)
Year ended 31 December 2023:
Loss
-
-
-
-
(4,159,209)
(4,159,209)
Other comprehensive income:
Currency translation differences
-
-
-
(11,379)
-
0
(11,379)
Total comprehensive income
-
-
-
(11,379)
(4,159,209)
(4,170,588)
Transactions with owners:
Issue of share capital
23
-
0
5,637,503
-
-
-
5,637,503
Share options exercised
-
-
16,700
-
-
16,700
Balance at 31 December 2023
2
11,782,910
16,700
1,790
(10,365,591)
1,435,811

The notes on pages 13 to 29 form part of these group financial statements.

QUALITY CLOUDS LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
32
(4,382,868)
(1,719,533)
Interest paid
(1,473)
(13,012)
Income taxes refunded
207,307
117,432
Net cash outflow from operating activities
(4,177,034)
(1,615,113)
Investing activities
Purchase of property, plant and equipment
(27,078)
(13,883)
Proceeds from disposal of property, plant and equipment
83
300
Loans made to directors
-
0
(20,446)
Repayment of loans made to directors
20,446
-
0
Interest received
43,132
493
Net cash generated from/(used in) investing activities
36,583
(33,536)
Financing activities
Proceeds from issue of shares
5,637,503
2,680,668
Repayment of bank loans
(21,045)
(19,726)
Net cash generated from financing activities
5,616,458
2,660,942
Net increase in cash and cash equivalents
1,476,007
1,012,293
Cash and cash equivalents at beginning of year
1,254,712
242,419
Cash and cash equivalents at end of year
2,730,719
1,254,712

The notes on pages 13 to 29 form part of these group financial statements.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information

Quality Clouds Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 20-22 Wenlock Road, London, N1 7GU. The company's principal activities and nature of its operations are disclosed in the directors' report.

 

The group consists of Quality Clouds Ltd and all of its subsidiaries.

1.1
Accounting convention

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

 

As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS

1.2
Business combinations

The 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.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Quality Clouds Ltd 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 2023. 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 group.

 

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.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.4
Revenue

Revenue represents amounts receivable in respect of services provided during the year, excluding value added tax ("VAT"). In accordance with IFRS 15 (“Revenue from Contracts with Customers”), revenue is measured by reference to the fair value of the consideration received or receivable by the company for the services provided, excluding VAT. For contracts with customers that stipulate the service will be provided over a period of time, the fair value of the contract is assessed and split equally over the term of the contract. Revenue is recognised when the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and when the costs incurred or to be incurred can be measured reliably.

1.5
Property, plant and equipment

Property, plant and equipment 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:

Fixtures and fittings
25% or 33% on cost
Computers
25% or 33% on cost

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.

1.6
Non-current investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.7
Impairment of tangible and intangible assets

At each reporting 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 group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.8
Cash and cash equivalents

Cash and cash equivalents 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.

1.9
Financial assets

Financial assets are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

1.10
Financial liabilities

The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

1.11
Equity instruments

Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.

1.12
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 year. 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.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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.

1.13
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 inventories or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Share-based payments

The group operates an equity-settled share-based remuneration plans for its employees. All goods and services received in exchange for the grant of any share-based payment are measured at their fair values.

 

Where employees are rewarded using share-based payments, the fair value of employees’ services is determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions.

All share-based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to retained earnings. The expense is allocated over the vesting period, based on the best available estimate of the number of shares expected to vest.

 

Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, are allocated to share capital up to the nominal (or par) value of the shares issued with any excess being recorded as share premium.

1.16
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.

1.17

Product development

Expenditure on product development is written off in the period in which it is incurred.

2
Adoption of new and revised standards and changes in accounting policies
Standards which are in issue but not yet effective

At the date of authorisation of these financial statements, the following standards and interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

Amendments to IAS 1 (effective 1 January 2024)
Classification of liabilities
Amendments to IAS 1 (effective 1 January 2024)
Non current liabilities with covenants
Amendments to IFRS 16 (effective 1 January 2024)
Lease liability in a sale and leaseback
Amendments to IAS 7 and IFRS 7 (effective 1 January 2024)
Supplier finance
Amendments to IAS 21 (effective 1 January 2025)
Lack of exchangeability

Management has assessed that the above changes to the standards are not expected to have a material impact on the financial position or financial performance of the company.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Critical accounting estimates and judgements

In the application of the company’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, 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.

 

In the opinion of the directors, there are no areas where management judgements have had a significant effect on amounts recognised in the financial statements.

4
Revenue
2023
2022
£
£
Revenue analysed by class of business
Computer software support and development services
2,162,206
1,586,478
2023
2022
£
£
Revenue analysed by geographical market
United Kingdom
296,094
229,154
Europe
500,456
451,954
USA
1,248,936
774,010
Rest of World
116,720
131,360
2,162,206
1,586,478
5
Operating profit
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange losses
14,005
30,574
Depreciation of property, plant and equipment
15,342
9,054
Share-based payments
16,700
-
6
Employees

The average monthly number of persons (including directors) employed by the group during the year was:

2023
2022
Number
Number
50
37
QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 18 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,017,116
1,556,538
Social security costs
512,752
296,240
Pension costs
25,396
15,821
3,555,264
1,868,599
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
368,432
324,604
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
143,965
146,976

Directors' remuneration of £(10,217) (2022: £90,073) is included in consultancy costs in the detailed group profit and loss account.

8
Investment income
2023
2022
£
£
Interest income
Financial instruments measured at amortised cost:
Bank deposits
42,679
493
Other interest income on financial assets
453
-
0
Total interest revenue
43,132
493
9
Finance costs
2023
2022
£
£
Interest on bank overdrafts and loans
1,473
1,207
Other interest payable
-
0
56,649
Total interest expense
1,473
57,856
QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
10
Income tax expense
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(345,585)
(194,079)
Adjustments in respect of prior periods
-
0
1,557
Total UK current tax
(345,585)
(192,522)
Deferred tax
Origination and reversal of temporary differences
(39,198)
(54,179)
Total tax (credit)
(384,783)
(246,701)

The charge for the year can be reconciled to the profit per the income statement as follows:

2023
2022
£
£
Loss before taxation
(4,543,992)
(2,311,361)
Expected tax credit based on a corporation tax rate of 19.00% (2022: 19.00%)
(863,358)
(439,159)
Effect of expenses not deductible in determining taxable profit
-
52,265
Unutilised tax losses carried forward
834,108
293,664
Effect of change in UK corporation tax rate
-
57,141
Permanent capital allowances in excess of depreciation
-
108
Research and development tax credit
(307,099)
(150,385)
Effect of overseas tax rates
(9,236)
3,565
Under/(over) provided in prior years
-
1,557
Deferred tax
(39,198)
(54,179)
Foreign R & D tax credits
-
(11,278)
Taxation credit for the year
(384,783)
(246,701)

At 31st December 2023 the group had unrelieved trading losses amounting to approximately £7,100,000 (2022: £4,800,000) which are available to be carried forward and offset against future trading profits. No deferred tax asset has been recognised in respect of these losses as there is uncertainty about the timing and extent of future trading profits.

 

The parent company losses are not available to transfer against taxable profits in the subsidiary undertaking and a deferred tax asset is recognised in respect of timing differences in the subsidiary as set out in Deferred Tax note 20 in the financial statements.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Property, plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2022
1,394
43,695
45,089
Additions
-
0
13,883
13,883
Disposals
-
0
(1,665)
(1,665)
At 31 December 2022
1,394
55,913
57,307
Additions
1,070
26,008
27,078
Disposals
-
0
(791)
(791)
At 31 December 2023
2,464
81,130
83,594
Accumulated depreciation and impairment
At 1 January 2022
1,215
27,203
28,418
Charge for the year
126
8,928
9,054
Eliminated on disposal
-
0
(1,365)
(1,365)
At 31 December 2022
1,341
34,766
36,107
Charge for the year
310
15,032
15,342
Eliminated on disposal
-
0
(708)
(708)
At 31 December 2023
1,651
49,090
50,741
Carrying amount
At 31 December 2023
813
32,040
32,853
At 31 December 2022
53
21,147
21,200
12
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Principal activities
Class of
% Held
shares held
Direct
Quality Clouds S.L.
Plç. Universitat Núm. 3, floor 6, BARCELONA 08007
Computer software development
Ordinary
100.00
Quality Clouds Inc.
800 N. State Street, Suite 403, City of Dover, County of Kent, 19901
Dormant
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Quality Clouds S.L.
254,266
(76,261)
QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Trade and other receivables
2023
2022
£
£
Trade receivables
900,683
358,217
Other receivables
68,481
61,880
Prepayments
177,642
65,846
1,146,806
485,943

The parent company has surrendered its losses relating to Research and Development costs, including the enhanced allowances available, in order to receive a cash refund.

 

Tax receivable is categorised in level 2 within the fair value hierarchy.

14
Trade receivables - credit risk
Fair value of trade receivables

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

No significant receivable balances are impaired at the reporting end date.

15
Borrowings
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Borrowings held at amortised cost:
Bank loans
20,833
20,800
36,299
57,377

Financial liabilities are categorised in level 2 within the fair value hierarchy except other loans outstanding at 31st December 2023 which are categorised in level 3 within the fair value hierarchy.

16
Fair value of financial liabilities

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
17
Liquidity risk

The following table details the remaining contractual maturity for the group's financial liabilities with agreed repayment periods. The contractual maturity is based on the earliest date on which the group may be required to pay.

1 – 3 months
3 months to 1 year
1 – 5 years
Total
£
£
£
£
At 31 December 2022
Bank loans
5,200
15,600
57,377
78,177
5,200
15,600
57,377
78,177
At 31 December 2023
Bank loans
5,208
15,625
36,299
57,132
5,208
15,625
36,299
57,132
18
Market risk
Market risk management

The company is exposed to various financial risks such as market risk (variation in foreign exchange rates, interest rates etc.), credit risk and liquidity risk. The company's risk management policy is aimed at limiting the negative impact of these risks on its financial results which are derived from the inability to predict financial markets and the changes in variables affecting costs and revenue.

 

The risk management policy is executed by the company's directors using the following procedure:

 

 

-

 

Evaluation of risks related to the company's activities.

 

 

-

 

Methodology planning and selection of any suitable actions for risk reduction.

 

 

-

 

Execute risk management in accordance to the procedure approved by the directors.

 

 

Business risk

The directors consider that the company's principal business risks are over-reliance on key customers. The directors are confident that the company is well placed to retain its existing customers and to also attract new business.

 

Financial instruments

The company's financial instruments are mainly comprised of bank deposits and amounts owed to and owed from third parties.

 

The carrying amounts reflected in the accompanying Statement of Financial Position for balances approximately their respective fair values due to the relatively short-term maturity of these financial instruments.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Market risk
(Continued)
- 23 -
Fair value of assets and liabilities

All assets and liabilities for which fair value is disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

 

1

 

 

Level 1

 

 

Quoted (unadjusted) market prices in active markets for identical assets or liabilities

 

 

2

 

 

Level 2

 

 

Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

 

 

3

 

 

Level 3

 

 

Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

 

 

For the purpose of fair value disclosures, the company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

Liquidity risk

The company manages its liquidity by carefully monitoring scheduled debt servicing payments for long-term financial liabilities as well as cash outflows due in its day-to-day business. Liquidity needs are monitored in various time bands, on a daily, weekly and monthly basis.

 

Foreign exchange risk

Currency risk arises from the fair values, or the cash flows, of a financial instrument fluctuating due to changes in foreign currency exchange rates. The group has trade receivables in various currencies such as Sterling, the Euro and the US Dollar and a significant proportion of the group's payables are also denominated in foreign currencies.

 

With a high level of foreign currency income and foreign currency costs there is a significant exposure to currency risk because the LLP does not actively undertake currency hedging transactions. Risks have been managed successfully to date through the operation of bank accounts for each currency with low levels of foreign exchange differences in the current year or previous period.

Credit risk

Credit risk is the risk of financial loss to the group if a counterparty fails to meet its contractual obligations.

 

Maximum exposure to credit risk at the reporting date to which the group is exposed is the carrying value of the trade and other receivables and customer defaults could adversely affect the liquidity of the group. However, due to the large number of customers and the diversification of the customer base, there is an acceptable level of concentration of credit risk with respect to these receivables.

 

The group has established credit policies under which customers are analysed for creditworthiness and there is an effective management of receivables in place both before and after they become overdue and if they were to become doubtful. In monitoring credit risk, customers are grouped according to their credit risk characteristics, ageing profile and existence of previous financial difficulties. If customers were to be characterised as doubtful, they would be reassessed at each reporting date for the estimated loss that would be expected, and an appropriate impairment allowance would be established.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
19
Trade and other payables
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Trade payables
106,793
125,580
-
0
-
0
Accruals
407,345
487,844
517,708
237,884
Social security and other taxation
203,372
131,333
-
0
-
0
Other payables
1,625,977
1,015,125
-
0
-
0
2,343,487
1,759,882
517,708
237,884
20
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting period.

Subsidiary exchange timing differences
£
Asset at 1 January 2022
(2,090)
Deferred tax movements in prior year
Charge/(credit) to profit or loss
(54,179)
Exchange difference
(2,255)
Asset at 1 January 2023
(58,524)
Deferred tax movements in current year
Charge/(credit) to profit or loss
(39,198)
Exchange difference
1,269
Asset at 31 December 2023
(96,453)

Deferred tax assets are expected to be recovered after more than one year.

21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
25,396
15,821

The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Contributions totalling £3,042 (2022: £3,009) were payable to the scheme at the end of the year and are included in creditors.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
22
Share-based payments
2023
2022
£
£
Expenses
Related to equity settled share based payments
16,700
-

The group operates an Employee Management Incentive ("EMI") scheme which will be settled by share based payments.

 

The scheme granted 43,941 share options on 24 September 2020 with a vesting period of 4 years from the date of employment. The estimated fair value of each share option granted in the Employee Management Incentive scheme is £0.17. The exercise price at the date of the grant of the share options is £0.17.

 

The scheme granted 25,000 share options on 21 March 2023 with a vesting period of 4 years from the date of employment. The estimated fair value of each share option granted in the Employee Management Incentive scheme is £2.19. The exercise price at the date of the grant of the share options is £2.19.

 

The scheme granted 4,800 share options on 24 July 2023 & 3,000 share options on 4 October 2023 with vesting periods of 4 years from the date of employment. The estimated fair value of each share option granted in the Employee Management Incentive scheme is £2.38. The exercise price at the date of the grant of the share options is £2.38.

 

At 31st December 2023:

 

20,623 EMI share options have been exercised

32,726 EMI share options have lapsed

23,392 un-exercised EMI share options remain

 

There was a weighted average remaining contractual life of 8.37 years.

 

During the year ended 31 December 2023 the group has granted further share options that are not part of the EMI scheme which will be settled by share based payments.

 

The scheme granted 242 "Non-EMI" share options on 27 May 2021, 100 "Non-EMI" share options on 23 June 2021, 406 "Non-EMI" share options on 9 July 2021, 32,330 "Non-EMI" share options on 4 May 2022 and 400 "Non-EMI" share options on 27 February 2023 with vesting periods of 4 years from the date of employment. The estimated fair value of each share option granted in the Employee Management Incentive scheme is £3.17. The exercise price at the date of the grant of the share options is £3.17.

 

The scheme granted 4,000 "Non-EMI" share options on 22 March 2023 with a vesting period of 4 years from the date of employment. The estimated fair value of each share option granted in the Employee Management Incentive scheme is £1.97. The exercise price at the date of the grant of the share options is £1.97.

 

The scheme granted 12,400 "Non-EMI" share options on 15 June 2023 and 400 "Non-EMI" share options on 12 September with vesting periods of 4 years from the date of employment. The estimated fair value of each share option granted in the Employee Management Incentive scheme is £2.14. The exercise price at the date of the grant of the share options is £2.14.

 

The scheme granted 80,000 "Non-EMI" share options on 5 May 2023 with a vesting period of 4 years from the date of employment. The estimated fair value of each share option granted in the Employee Management Incentive scheme is £2.14. The exercise price at the date of the grant of the share options is £2.14.

 

As a result of the fair value and exercise prices being equal there is no cost that needs to be accounted for as a share based payment.

 

At 31st December 2023, 384 Non-EMI share options have lapsed and 129,864 un-exercised Non-EMI share options remain.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0p each
1,023,908
1,044,900
2
2
Series A1 shares of 0p each
271,175
96,797
-
-
Series A2 shares of 0p each
318,728
318,728
-
-
Ordinary B shares of 0p each
-
12,128
-
-
Y1 Preferred shares of 0p each
-
262,405
-
-
Preferred shares of 0p each
-
271,175
-
-
Y2 Preferred shares of 0p each
-
135,238
-
-
G shares of 0p each
-
101,039
-
-
Growth shares of 0p each
101,039
-
-
-
Non-Voting Ordinary B shares of 0p each
20,623
-
-
-
Seed shares of 0p each
96,797
-
-
-
Series A+ (PP) shares of 0p each
614,554
-
-
-
Series A3 shares of 0p each
262,405
-
-
-
Series A4 shares of 0p each
135,238
-
-
-

The ordinary, Series A1, Series A2, G, Preferred, Y1 Preferred, Y2 Preferred, Growth, Seed, Series A3 and Series A4 classes of shares, have equal voting and dividend rights. Y1 Preferred, Y2 Preferred, Aeries A+ (PP), Series A1 and Series A2 classes of shares have a preference on a capital distribution. Ordinary B shares and Non-Voting Ordinary B shares have no dividend rights or rights to attend, speak or vote at any general meetings or on any written shareholder resolutions.

 

On 18th November 2019 a special resolution was passed giving Series A1 and Series A2 shares priority over the ordinary shares on distributions from a winding up of the company.

 

On 20 January 2023, 208 Ordinary B shares of £0.000001 were issued and fully paid for by cash, at a price of £0.17 per share.

 

On 31 March 2023, 593,562 Series A+ (PP) shares of £0.000001 were issued and fully paid for by cash, at a price of £9.53 per share.

 

On 31 March 2023, 96,797 Series A1 shares of £0.00001, were re-designated as 96,797 Seed shares of £0.000001, 271,175 Preferred shares of £0.000001 were re-designated as 271,175 Series A1 shares of £0.000001, 262,405 Y1 Preferred shares of £0.000001 were re-designated as 262,405 Series A3 shares of £0.000001, 135,238 Y2 Preferred shares of £0.000001 were re-designated as 135,238 Series A4 shares of £0.000001, 101,039 G shares of £0.000001 were re-designated as 101,039 Growth shares of £0.000001, 20,992 Ordinary shares of £0.000001 were re-designated as 20,992 Series A+ (PP) shares of £0.000001 and 20,623 Ordinary B shares of £0.000001 were re-designated as 20,623 Non-Voting Ordinary B shares of £0.000001.

 

On 23 October 2023, 8,287 Ordinary B shares of £0.000001 were issued and fully paid for by cash, at a price of £0.17 per share.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
24
Share premium account
2023
2022
£
£
At the beginning of the year
6,145,407
1,702,021
Issue of new shares
5,637,503
4,443,386
At the end of the year
11,782,910
6,145,407
25
Share option reserve
2023
2022
£
£
At the beginning of the year
-
-
Share options exercised
16,700
-
At the end of the year
16,700
-
26
Currency translation reserve
2023
2022
£
£
At the beginning of the year
13,169
(1,646)
Translation (loss)/gain arising in the year
(11,379)
14,815
At the end of the year
1,790
13,169
27
Events after the reporting date

On August 5 2024, the parent company secured significant external financing from British Smaller Companies VCT Plc, British Smaller Companies VCT2 Plc, YFM Equity Partners Growth III LP and Adara Ventures III Sicar SCA  to provide additional working capital to support the business investment and growth. The total amount receivable on 5 August, after deducting fees and associated VAT, was £3,764,861.

28
Related party transactions

During the year the group entered into the following transactions with related parties:

Sale of goods
Management charges included in cost of sales
2023
2022
2023
2022
£
£
£
£
Subsidiaries
-
0
-
0
156,172
74,948
QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
28
Related party transactions
(Continued)
- 28 -
Services included in administrative expenses
2023
2022
£
£
Subsidiaries
1,923,953
1,482,771

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Subsidiaries
402,364
659,972
29
Directors' transactions

During the year the loan to M Sutherland was written off and at 31st December 2023 the outstanding balance was £Nil (2022: £20,446). Interest of £453 was charged on the loan. The maximum amount of loan outstanding in the period was £20,899.

30
Controlling party

No single party has had ultimate control of the parent company during the current year or previous year.

31
Going concern

The financial statements are prepared on a going concern basis as the directors are satisfied that the Company has the ability to continue in business for the foreseeable future.

During the year ended 31 December 2023, the group incurred a loss of £4,159,209 and as of that date the group's accumulated losses increased to £10,365,591. These losses have been financed by continued capital investments which result in net assets of £1,435,811 being reported within the December 2023 group statement of financial position.

As per note 27, the Company raised £3,764,861 of new equity on 5 August 2024, which will fund continuing growth and operations.

67% of Group liabiities at 31st December 2023 are Deferred Income and for the Company Deferred Income and Group Creditors are 96% of liabilities.

In making the going concern assessment the directors have considered future projection of operating performance, cashflow forecasts, and the Company's ability to raise additional equity investment, which is evidenced by its strong track record in attracting new investment, such as the new equity raised on 5 August 2024 (see above).

 

In addition, the directors have reviewed the external risks and uncertainties that the Company faces and consider that this does not alter the going concern basis of preparing the financial statements.

QUALITY CLOUDS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
32
Cash absorbed by operations
2023
2022
£
£
Loss for the year before income tax
(4,543,992)
(2,311,361)
Adjustments for:
Finance costs
1,473
57,856
Investment income
(43,132)
(493)
Depreciation and impairment of property, plant and equipment
15,342
9,054
Foreign exchange gains on cash equivalents
(11,379)
12,561
Equity settled share based payment expense
16,700
-
Movements in working capital:
Increase in trade and other receivables
(681,309)
(133,104)
Increase in trade and other payables
863,429
645,954
Cash absorbed by operations
(4,382,868)
(1,719,533)
QUALITY CLOUDS LTD
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 30 -
2023
2022
Notes
£
£
ASSETS
Non-current assets
Property, plant and equipment
36
11,505
6,352
Investments
37
3,011
3,011
14,516
9,363
Current assets
Trade and other receivables
38
1,425,074
667,580
Cash and cash equivalents
2,701,648
1,245,981
4,126,722
1,913,561
Total assets
4,141,238
1,922,924
EQUITY
Called up share capital
43
2
2
Share premium account
11,782,910
6,145,407
Share option reserve
16,700
-
0
Retained earnings
(10,617,197)
(6,528,054)
Total equity
1,182,415
(382,645)
LIABILITIES
Non-current liabilities
39
537,242
267,051
Current liabilities
39
2,421,581
2,038,518
Total equity and liabilities
4,141,238
1,922,924

The notes on pages 32 to 35 form part of these parent financial statements.

As permitted by trues408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s loss for the year was £4,089,143 (2022 - £2,222,708 loss).

The financial statements were approved by the board of directors and authorised for issue on 5 September 2024 and are signed on its behalf by:
2024-09-13
Mr A Serle
Director
Company registration number 09522753 (England and Wales)
QUALITY CLOUDS LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
Share capital
Share premium account
Share option reserve
Retained earnings
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
2
1,702,021
-
(4,305,345)
(2,603,322)
Year ended 31 December 2022:
Loss and total comprehensive income
-
-
-
(2,222,709)
(2,222,709)
Transactions with owners:
Issue of share capital
43
-
0
4,443,386
-
-
4,443,386
Balance at 31 December 2022
2
6,145,407
-
(6,528,054)
(382,645)
Year ended 31 December 2023:
Loss and total comprehensive income
-
-
-
(4,089,143)
(4,089,143)
Transactions with owners:
Issue of share capital
43
-
0
5,637,503
-
-
5,637,503
Share options exercised
-
-
16,700
-
16,700
Balance at 31 December 2023
2
11,782,910
16,700
(10,617,197)
1,182,415

The notes on pages 32 to 35 form part of these parent financial statements.

QUALITY CLOUDS LTD
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
33
Accounting policies
Company information

Quality Clouds Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 20-22 Wenlock Road, London, N1 7GU. The company's principal activities and nature of its operations are disclosed in the directors' report.

33.1
Accounting convention

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The company applies accounting policies consistent with those applied by the group. To the extent that an accounting policy is relevant to both group and parent company financial statements, please refer to the group financial statements for disclosure of the relevant accounting policy.

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

 

As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS

34
Adoption of new and revised standards and changes in accounting policies
Standards which are in issue but not yet effective

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

Amendments to IAS 1 (effective 1 January 2024)
Classification of liabilities
Amendments to IAS 1 (effective 1 January 2024)
Non current liabilities with covenants
Amendments to IFRS 16 (effective 1 January 2024)
Lease liability in a sale and leaseback
Amendments to IAS 7 and IFRS 7 (effective 1 January 2024)
Supplier finance
Amendments to IAS 21 (effective 1 January 2025)
Lack of exchangeability

Management has assessed that the above changes to the standards are not expected to have a material impact on the financial position or financial performance of the company.

QUALITY CLOUDS LTD
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
35
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
16
10

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,388,812
592,418
Social security costs
179,955
68,494
Pension costs
25,396
15,821
1,594,163
676,733
36
Property, plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2023
1,394
19,911
21,305
Additions
1,070
11,576
12,646
Disposals
-
0
(791)
(791)
At 31 December 2023
2,464
30,696
33,160
Accumulated depreciation and impairment
At 1 January 2023
1,341
13,612
14,953
Charge for the year
310
7,100
7,410
Eliminated on disposal
-
0
(708)
(708)
At 31 December 2023
1,651
20,004
21,655
Carrying amount
At 31 December 2023
813
10,692
11,505
At 31 December 2022
53
6,299
6,352
37
Investments
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Investments in subsidiaries
-
0
-
0
3,011
3,011
QUALITY CLOUDS LTD
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
37
Investments
(Continued)
- 34 -
Fair value of financial assets carried at amortised cost

Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

Investment in subsidiary undertakings

Details of the company's principal operating subsidiaries are included in note 12.

Movements in non-current investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 & 31 December 2023
3,011
Carrying amount
At 31 December 2023
3,011
At 31 December 2022
3,011
38
Trade and other receivables
2023
2022
£
£
Trade receivables
900,503
342,240
Corporation tax recoverable
308,821
208,923
Other receivables
61,356
54,599
Prepayments
154,394
61,818
1,425,074
667,580

The company has surrendered its losses relating to Research and Development costs, including the enhanced allowances available, in order to receive a cash refund.

 

Tax receivable is categorised in level 2 within the fair value hierarchy.

39
Liabilities
Current
Non-current
2023
2022
2023
2022
Notes
£
£
£
£
Borrowings
40
10,000
10,000
19,534
29,167
Trade and other payables
42
2,343,508
1,989,082
517,708
237,884
Taxation and social security
68,073
39,436
-
-
2,421,581
2,038,518
537,242
267,051
QUALITY CLOUDS LTD
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
40
Borrowings
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Borrowings held at amortised cost:
Bank loans
10,000
10,000
19,534
29,167
41
Fair value of financial liabilities

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

42
Trade and other payables
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Trade payables
96,864
106,505
-
0
-
0
Amounts owed to fellow group undertakings
402,364
659,972
-
-
Accruals
218,303
212,226
517,708
237,884
Social security and other taxation
68,073
39,436
-
-
Other payables
1,625,977
1,010,379
-
0
-
0
2,411,581
2,028,518
517,708
237,884
43
Share capital
Refer to note 23 of the group financial statements.
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