Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2019
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ROCK SERVICES HOLDINGS LIMITED
COMPANY INFORMATION
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ROCK SERVICES HOLDINGS LIMITED
CONTENTS
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ROCK SERVICES HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
The directors present their strategic report for the year ended 31 December 2019.
The Group is required by the Companies Act 2006 to set out in this report, a fair review of the business of the Group during the financial year ended 31 December 2019, the position of the Group and Company at the end of the period and a description of the principal risks and uncertainties facing the Group. This review is prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed, and the business review should not be relied upon by any other party or for any other purpose.
The directors consider the results to be satisfactory given the challenges presented by the continuing economic uncertainty caused by Brexit and the acute and unprecedented challenges presented by the COVID-19 global pandemic. The Group has reacted quickly to the COVID-19 pandemic by cutting costs where possible and positioning itself to be at the forefront of the industry when consumer demand picks up again. The key performance indicators used by the directors to monitor the progress of the Group are set out below:-
The following risk factors may affect the Group's operating results and its financial position. The risk factors described below are those which the directors believe are potentially significant but should not be regarded as a complete and comprehensive statement of all potential risk and uncertainties facing the Group.
The Group finances its operations through retained profits. The Group's exposure to interest rate fluctuations on its cash deposits are managed by using short term, fixed and floating deposits. The Group operates in a highly competitive market featuring innovation in insurance products and the methods by which they are marketed, as well as price pressures. The Group seeks to constantly invest in its brand to increase public awareness as well as offer a wide selection of products from a wide range of suppliers at competitive prices to maintain its market position and protect against erosion of its market share. The Group also monitors competitor activity closely.
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ROCK SERVICES HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
Principal risks and uncertainties (continued)
The Group is exposed to foreign exchange rate risk when it purchases overseas services in currencies other than British Pounds. Monetary assets and liabilities are translated at the exchange rate prevailing at the statement of financial position date. All exchange gains and losses so arising are taken to the income statement. The Group partially hedges this risk and where not hedged, the Group bears the risk associated with such foreign exchange movements. The Group has well established and close relationships with customers and suppliers and risk is spread by not placing over-reliance on any one supplier in any particular area. However, if a relationship were lost or damaged with a major supplier this could have a detrimental effect on the business. The management team meets regularly with suppliers to maintain good working relationships and to understand the supplier's financial position. The Group is heavily reliant on the uninterrupted operation of its IT systems and website. These systems are vulnerable to power loss, fire, computer viruses and other events. Loss of these systems would impair the ability of the Group to carry on its business effectively. The Group has made arrangements to mitigate this risk. The demand for travel insurance is affected by local economic conditions. The uncertainty created by the COVID-19 pandemic along with Brexit, and the ensuing volatility in exchange rates and consumer confidence creates a fragile trading environment. Despite the negative impact upon the travel insurance industry, the directors believe that the Group is able to quickly adapt to changes in the local market demand, however a prolonged period of booking slowdown could adversely affect future financial results. The nature of the business exposes the Group to various commercial risks which may affect the trading performance of the Group. These include: - acts of terrorism, particularly in key tourist destinations - epidemics in key tourist destinations which threaten the health of tourists - wars or other international uncertainty which affects air travel - natural disasters in key tourist destinations - detrimental weather conditions, both in the UK and key tourist destinations - changes in customer behaviour and preferences - increase in government taxes These factors may affect the Group by causing potential customers to cancel or postpone travel plans, reducing the earnings potential of the Group. The Group seeks to minimise such risks by offering products in a wide range of destinations.
This report was approved by the board on 16 November 2020
and signed on its behalf.
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ROCK SERVICES HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
The directors present their report and the financial statements for the year ended 31 December 2019.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the
consolidated
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The principal activity of the Group continued to be that of travel insurance intermediaries.
The loss for the year, after taxation and minority interests, amounted to £
217,361
(2018 -
profit
£
324,833
)
.
No dividends will be distributed for the year ended 31 December 2019.
The directors who served during the year were:
During 2020 and 2021 the Group will continue to operate as outlined in the principal activity note above.
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ROCK SERVICES HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
The Group's growth requires investment in innovative technology and the ability to deliver fast, innovative and effective search results for consumers in a market that has seen significant technological advances in recent years. During the year the Group made significant investment into software development.
Each of the persons who are
directors at the time when this Directors' Report is approved has confirmed that:
There have been no significant events affecting the Group since the year end, except for the outbreak of the Coronavirus pandemic, which has had a significant impact upon the industry in which the Group operates, as described in note 2.4.
In response to the financial impact of the Coronavirus pandemic, since the year-end the Group has received a CBILS loan from their bank of £600,000.
The auditors, White Hart Associates (London) Limited, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
This report was approved by the board on
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ROCK SERVICES HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROCK SERVICES HOLDINGS LIMITED
We have audited the financial statements of Rock Services Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2019, which comprise the Group Statement of Comprehensive Income, the Group and Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
The impact of uncertainties due to the COVID-19 pandemic and Brexit on our audit
Uncertainties related to the effects of the COVID-19 pandemic and Brexit are relevant to understanding our audit of the financial statements. All audits assess and challenge the reasonableness of estimates made by the directors, such as recoverability of investments, intangible assets and related disclosures and the appropriateness of the going concern basis of preparation of the financial statements. All of these depend on assessments of the future economic environment and Group's future prospects and performance. The COVID-19 pandemic has had an unprecedented impact upon the worldwide economy and in particular upon the travel insurance industry, with many consumers cancelling or delaying travel plans as a result. At the date of this report, the full range of possible effects upon companies cannot be estimated or assessed due to the current levels of uncertainty around government and consumer responses to what might happen. We have applied a standardised firm-wide approach in response to that uncertainty when assessing the Group's future prospects and performance. However, no audit is able, or should be expected, to predict unknowable factors or all possible future implications for a company and this is particularly the case in relation to the COVID-19 pandemic. Brexit was also one of the most significant economic events for the UK, and at the date of this report its effects are still subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. We applied a standardised firm-wide approach in response to that uncertainty when assessing the Group's future prospects and performance. However, no audit should be expected to predict the unknowable factors or all possible future implications for a company or group and this is particularly the case in relation to Brexit.
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ROCK SERVICES HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROCK SERVICES HOLDINGS LIMITED (CONTINUED)
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 2.4 to the financial statements concerning the Group's ability to continue as a going concern.
As explained in note 2.4, the current COVID-19 pandemic has had an unprecedented impact upon the global economy and especially upon the travel insurance industry. This has led many consumers to hold off on taking out new policies or to cancel existing travel plans until the global situation stabilises, resulting in greatly reduced cash flows for travel insurance companies. These problematic trading conditions have negatively impacted the Group's trade as well as its immediate and projected cash flows. In the event that the COVID-19 pandemic worsens for a prolonged period of time, this would put pressure on the Group's finances and its ability to continue as a going concern. We draw attention to note 2.4 of the financial statements as to the review and actions undertaken by the Board of Directors to ensure that the Group has adequate resources to continue trading for at least 12 months. The financial statements have therefore been prepared on a going concern basis.
We draw attention to notes 20 and 29 to the financial statements, which describe the financial covenants breached by the Group and the response of the Group's bankers since year-end.
Our opinion is not modified in respect of this matter.
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
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ROCK SERVICES HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROCK SERVICES HOLDINGS LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
As explained more fully in the Directors' Responsibilities Statement on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
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ROCK SERVICES HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROCK SERVICES HOLDINGS LIMITED (CONTINUED)
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 Auditors' 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' 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 Auditors' 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.
for and on behalf of
Chartered Accountants and Statutory Auditors
2nd Floor, Nucleus House
2 Lower Mortlake Road
TW9 2JA
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ROCK SERVICES HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
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ROCK SERVICES HOLDINGS LIMITED
REGISTERED NUMBER:
10327230
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2019
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 16 November 2020
.
The notes on pages 16 to 37 form part of these financial statements.
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ROCK SERVICES HOLDINGS LIMITED
REGISTERED NUMBER:
10327230
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2019
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 16 to 37 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 DECEMBER 2019
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ROCK SERVICES HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 DECEMBER 2019
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ROCK SERVICES HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
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ROCK SERVICES HOLDINGS LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2019
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
As disclosed in the Directors' Report, the principal activity of the Company in the period under review was that of a holding company. The principal activity of the Group continued to be that of travel insurance intermediaries.
Rock Services Holdings Limited is a private company limited by shares and incorporated in England under registered number 10327230. The address of the Group's principal place of business, being the same as the registered office stated on the Company Information page, is: 135 High Street Crawley West Sussex RH10 1DQ
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 January 2015.
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.
Accounting policies (continued)
In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated Statement of Comprehensive Income includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated Statement of Financial Position, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition. Any premium on acquisition is dealt with in accordance with the goodwill policy.
The current COVID-19 pandemic has had an unprecedented impact upon the global economy and in particular upon the travel insurance industry, causing many consumers to cancel or amend their travel arrangements.
Additionally, with the majority of consumers no longer seeking to book holidays until the global situation stabilises, many travel insurance companies are struggling to cope with greatly reduced cash flows. The full impact of the COVID-19 pandemic on the business remains uncertain and as a result is not completely quantifiable. Nevertheless, the directors have taken immediate and comprehensive steps to review the Group's financial position, downgraded its forecasts and planned mitigation actions in order to neutralise the financial impact from the significant downturn in trading for the travel insurance industry. The directors have also performed a sensitivity analysis to assess the financial impact of a further and/or prolonged downturn in trading from the reforecast and its impact on the liquidity of the business. This sensitivity analysis shows that the Group has enough liquidity and cash to trade through a further slowdown. The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the forseeable future, being at least the following 12 months from the signing of these financial statements. As a result, the directors believe that it is still appropriate to apply the going concern basis for the Group for the foreseeable future.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Turnover includes revenue earned from sales of insurance products to mainly travel clients and is recognised on a date of booking basis.
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.
Accounting policies (continued)
Goodwill
Other intangible assets
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.
Amortisation is provided on the following bases:
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 the Consolidated Statement of Comprehensive Income.
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.
Accounting policies (continued)
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
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.
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.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.
Accounting policies (continued)
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
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.
Page 20
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.
Accounting policies (continued)
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 the Consolidated Statement of Comprehensive Income
except when deferred in other comprehensive income as qualifying cash flow hedges.
Finance costs are charged to the Consolidated Statement of Comprehensive Income 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.
Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive Income on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.
Accounting policies (continued)
Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.
All borrowing costs are recognised in the Consolidated Statement of Comprehensive Income in the year in which they are incurred.
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Consolidated Statement of Comprehensive Income in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.
Accounting policies (continued)
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
a) Critical judgments in applying the Group's accounting policies The directors believe that there are no critical judgments involved in applying the Group's accounting policies that warrant disclosure. b) Key accounting estimates and assumptions The directors believe that there are no key accounting estimates and assumptions involved in applying the Group's accounting policies that warrant disclosure.
Page 24
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Page 25
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Page 26
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Page 27
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
13.
Taxation (continued)
There were no factors that may affect future tax charges.
Page 28
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Page 29
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Page 30
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Page 31
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Subsidiary undertakings (continued)
Page 32
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Page 33
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Included within other loans above is a loan from Clydesdale Bank PLC, which is secured against a fixed charge registered on 5 February 2018 against the Company's and Group's assets, incurs interest at a rate of 4.97% per annum and is due for repayment by way of monthly instalments until March 2023. The Group was in breach of some of the loan covenants, which Clydesdale Bank PLC has been made aware of. The bank's response since the year-end has not been to withdraw the loan facility, but to provide further CBILS loan financing of £600,000 (see note 29).
Page 34
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Page 35
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Share premium account
Profit and loss account
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £56,577 (2018 - £42,930). Contributions totalling £8,613 (2018 - £7,306) were payable to the fund at the reporting date and are included in creditors.
Page 36
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ROCK SERVICES HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
In the opinion of the directors there is no single controlling party.
A debenture charge was registered on 5 February 2018 in favour of Clydesdale Bank Plc.
Page 37
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