Going Concern
The company has incurred losses in recent periods, reflecting a strategic decision to invest in the research and development of proprietary software applications, with associated costs expensed through the profit and loss account rather than capitalised, owing to uncertainty over technical feasibility during the development phase. During the year, research and development expenditure reduced significantly as the company's products reached maturity, and the director expects the company to move towards positive operating cashflows going forward.
The company remains dependent on continued financial support from Burgess Cloud Consulting Ltd, a company under common control as disclosed in note 5, to which £630,493 was owed at the balance sheet date. This support has historically been, and is expected to continue to be, provided on an ongoing basis, with repayment not required until the company is able to do so from its own resources. The director, who is also sole director of Burgess Cloud Consulting Ltd, confirms that this support is expected to remain available for at least twelve months from the date of approval of these accounts, and that Burgess Cloud Consulting Ltd does not intend to demand repayment during that period.
On this basis, the director considers it appropriate to prepare the accounts on a going concern basis.
Transactions with subsidiary entities
Included within operating costs are intercompany recharges totalling £58,814 (prior year £127,243). These costs represent salaries and associated administrative costs of overseas workers employed by a wholly owned subsidiary entity Application Perfection India Private Limited. The employees provide software development activities to the Company, specifically in developing it's software applications licenced to third parties.
Related Party Borrowings
Inlcuded in creditors is £630,493 payable to Burgess Cloud Consulting Ltd, an entity under common control (prior year £557,839). Both entities are close companies, wholly owned by the same individual who is also the sole director of both entities. The other entity provides ongoing financial support to the company as it pursues its R&D program. The loan is repayable on demand but the director does not anticipate needing to repay the loan until the company is able to do so out of profits.
From 1 August 2024 the loan is interest bearing at 2.5% (prior year 0%), interest of £15,272 is included within loan interest (prior year £17,368).