REGISTERED NUMBER:
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HYDRO INDUSTRIES LIMITED |
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FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 MAY 2020 |
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REGISTERED NUMBER:
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HYDRO INDUSTRIES LIMITED |
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FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 MAY 2020 |
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HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2020 |
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Company Information | 1 |
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Balance Sheet | 2 | to | 3 |
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Notes to the Financial Statements | 4 | to | 10 |
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HYDRO INDUSTRIES LIMITED |
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COMPANY INFORMATION |
FOR THE YEAR ENDED 31 MAY 2020 |
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DIRECTORS: |
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SECRETARY: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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AUDITORS: |
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Chartered Accountants and Statutory Auditor |
3 New Mill Court |
Swansea Enterprise Park |
Swansea |
SA7 9FG |
HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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BALANCE SHEET |
31 MAY 2020 |
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2020 | 2019 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 4 |
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Investments | 5 |
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CURRENT ASSETS |
Stocks | 6 |
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Debtors | 7 |
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Cash at bank and in hand |
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CREDITORS |
Amounts falling due within one year | 8 |
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NET CURRENT ASSETS |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CREDITORS |
Amounts falling due after more than one
year |
9 |
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NET ASSETS |
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CAPITAL AND RESERVES |
Called up share capital |
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Share premium |
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Capital redemption reserve |
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Retained earnings |
( |
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In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered. |
HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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BALANCE SHEET - continued |
31 MAY 2020 |
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The financial statements were approved by the Board of Directors and authorised for issue on
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HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2020 |
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1. | STATUTORY INFORMATION |
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Hydro Industries Limited is a
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The company's registered number and registered office address can be found on the Company |
Information page. |
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The presentation currency of the financial statements is the Pound Sterling (£). |
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Monetary amounts in these financial statements are rounded to the nearest £. |
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2. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
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Going concern |
In preparing the financial statements, the directors have considered the current financial position of the |
company and its likely future cashflows. The directors have noted that the company has made a profit |
in the year, and has both net current assets and net assets at balance sheet date. The company has a |
cash at bank balance £5,840,909 as at 31 May 2020. |
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There is considerable uncertainty about what the future holds for the UK economy and the |
consequences for the business. |
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The directors have assessed the risks facing the business from Covid-19 and implemented measures |
to address these risks, including obtaining government financial assistance. |
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In considering the Coronavirus 2019 (COVID-19), the directors understand the situation is still evolving |
and the full impact on the business is unclear. The directors have taken steps to mitigate the risk to the |
business and although there is uncertainty, the directors are confident that all reasonable measures |
which can be taken, have been, to safeguard the business, its staff and customers. |
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The company has prepared forecasts to assess its cash flows and funding requirements for the |
foreseeable future. In formulating the assumptions on trading and working capital, the company has |
considered current contracts and the impact on cash flows of future orders. |
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At the date of signing the financial statements, after making appropriate enquiries and examining |
those areas which could give rise to financial exposure including the impact of Covid-19, the directors |
are satisfied that the company will have adequate resources to continue its operations for the |
foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the |
financial statements. |
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The particular accounting policies adopted, which have been applied consistently throughout the |
current and prior financial year, are described below: |
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Preparation of consolidated financial statements |
The financial statements contain information about Hydro Industries Limited as an individual company |
and do not contain consolidated financial information as the parent of a group. The company is exempt |
under Section 399(2A) of the Companies Act 2006 from the requirements to prepare consolidated |
financial statements. |
HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2020 |
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2. | ACCOUNTING POLICIES - continued |
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Related party exemption |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 |
'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related |
party transactions with wholly owned subsidiaries within the group. |
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Significant judgements and estimates |
The company makes estimates and assumptions concerning the future. The resulting accounting |
estimates will, by definition, seldom equal the related actual results. The estimates and assumptions |
that have a significant risk of causing a material adjustment to the carrying amounts of assets and |
liabilities within the next financial year are addressed below : |
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(i) Useful economic lives of tangible assets |
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful |
economic lives and residual values of the assets. The useful economic lives and residual values are |
reassessed annually. They are amended when necessary to reflect current estimates, based on |
technological advancement, future investments, economic utilisation and the physical condition of the |
assets. |
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(ii) Inventory provisioning |
The company assesses the requirement for inventory provision and considers the nature and condition |
of the inventory, as well as applying assumptions around - saleability of finished goods and future |
usage of raw materials. |
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(iii) Impairment of debtors |
The company makes an estimate of the recoverable value of trade and other debtors. When assessing |
impairment of trade and other debtors, management considers factors including the current credit |
rating of the debtor, the ageing profile of the debtors and historical experience. |
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Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, |
rebates, value added tax and other sales taxes. |
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Revenue recognition |
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the |
company and the turnover can be reliably measured and the following criteria has been met :- |
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Sale of goods |
Turnover from the sale of goods is recognised when all of the following conditions are satisfied: |
- the company has transferred the significant risks and rewards of ownership to the buyer; |
- the company retains neither continuing managerial involvement to the degree usually associated with |
ownership nor effective control over the goods sold ; |
- the amount of turnover can be measured reliably ; |
- it is probable that the company will receive the consideration due under the transaction ; and |
- the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
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Rendering of services |
Turnover from a contract to provide services is recognised in the period in which the services are |
provided in accordance with the stage of completion of the contract when all of the following conditions |
are satisfied : |
- the amount of turnover can be measured reliably ; |
- it is probable that the company will receive the consideration due under the contract ; |
- the stage of completion of the contract at the end of the reporting period can be measured reliably ; |
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- the costs incurred and the costs to complete the contract can be measured reliably. |
HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2020 |
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2. | ACCOUNTING POLICIES - continued |
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Tangible fixed assets |
Tangible assets under the cost model are stated at historical cost less accumulated depreciation and |
any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to |
bringing the asset to the location and condition necessary for it to be capable of operating in the |
manner intended by management. |
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Depreciation is charged so as to allocate the cost of assets less their residual value over their |
estimated useful lives. |
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Depreciation is provided on the following basis : |
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Plant and machinery | - | 10 - 33% straight line |
Motor vehicles | - | 25% straight line |
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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. |
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Gains and losses on disposals are determined by comparing the proceeds with the carrying amount |
and are recognised in the Income Statement. |
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Government grants |
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to |
expenditure on tangible fixed assets are credited to the profit and loss account at the same rate as the |
depreciation on the assets to which the grant relates. The deferred element of grants is included in |
creditors as deferred income. |
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Grants of a revenue nature are recognised in “other income” within profit or loss in the same period as |
the related expenditure. |
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Investments in subsidiaries |
Investments in subsidiaries are measured at cost less accumulated impairment. |
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Stocks |
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less |
costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in |
progress and finished goods include labour and attributable overheads where appropriate. |
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At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying |
amount is reduced to its selling price less costs to complete and sell. The impairment loss is |
recognised immediately in profit or loss. |
HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2020 |
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2. | ACCOUNTING POLICIES - continued |
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Financial instruments |
Basic financial assets, which include trade and other debtors and cash and bank balances, are initially |
measured at transaction price unless the arrangement constitutes a financing transaction, where the |
transaction is measured at the present value of the future receipts discounted at a market rate of |
interest. |
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Basic financial liabilities, including trade and other creditors and loans, are initially recognised at |
transaction price unless the arrangement constitutes a financing transaction, where the debt |
instrument is measured at the present value of the future payments discounted at a market rate of |
interest. |
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Cash and cash equivalents |
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty |
on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no |
more than three months from the date of acquisition and that are readily convertible to known amounts |
of cash with insignificant risk of change in value. |
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Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, |
except to the extent that it relates to items recognised in other comprehensive income or directly in |
equity. |
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Current or deferred taxation assets and liabilities are not discounted. |
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Current tax |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been |
enacted or substantively enacted by the balance sheet date. |
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Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at |
the balance sheet date. |
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Timing differences arise from the inclusion of income and expenses in tax assessments in periods |
different from those in which they are recognised in financial statements. Deferred tax is measured |
using tax rates and laws that have been enacted or substantively enacted by the year end and that are |
expected to apply to the reversal of the timing difference. |
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Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable |
that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
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Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at |
the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of |
exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at |
the operating result. |
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Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the |
period of the lease. |
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Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the |
company's pension scheme are charged to profit or loss in the period to which they relate. |
HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2020 |
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3. | EMPLOYEES AND DIRECTORS |
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The average number of employees during the year was
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4. | TANGIBLE FIXED ASSETS |
Plant and | Motor |
machinery | vehicles | Totals |
£ | £ | £ |
COST |
At 1 June 2019 |
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Additions |
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Disposals |
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At 31 May 2020 |
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DEPRECIATION |
At 1 June 2019 |
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Charge for year |
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Eliminated on disposal |
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At 31 May 2020 |
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NET BOOK VALUE |
At 31 May 2020 |
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At 31 May 2019 |
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The net book value of tangible fixed assets include £23,040 in respect of assets held under hire |
purchase contracts as at 31 May 2020 (2019 - £35,574). |
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5. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
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COST |
At 1 June 2019 |
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Additions |
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At 31 May 2020 |
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NET BOOK VALUE |
At 31 May 2020 |
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At 31 May 2019 |
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6. | STOCKS |
2020 | 2019 |
£ | £ |
Raw materials |
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Finished goods |
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HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2020 |
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7. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2020 | 2019 |
£ | £ |
Trade debtors |
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Amounts owed by related parties | 263,194 | 215,739 |
Other debtors |
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Directors' current accounts | 81,529 | 87,023 |
Corporation tax recoverable |
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VAT |
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Prepayments and accrued income |
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Amounts owed by related parties in respect of loan balances and directors' current account balances |
are interest-free and repayable on demand. |
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8. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2020 | 2019 |
£ | £ |
Bank loans and overdrafts |
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Other loans |
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Hire purchase contracts |
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Trade creditors |
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Credit card | 9,806 | - |
Social security and other taxes |
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Pension creditor | 4,471 | 5,087 |
Accruals and deferred income |
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Other loans include £25,000 (2019 - £25,000) interest capitalised which remains unpaid at the date of |
signing the financial statements. The other loans are unsecured and have no fixed repayment terms. |
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CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR |
2020 | 2019 |
£ | £ |
Hire purchase contracts |
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10. | SECURED DEBTS |
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The following secured debts are included within creditors: |
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2020 | 2019 |
£ | £ |
Hire purchase contracts | 27,529 | 32,434 |
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Obligations under hire purchase contracts are secured on the assets to which they relate. |
HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2020 |
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11. | DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006 |
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The Report of the Auditors was unqualified. |
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for and on behalf of
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12. | PENSION COMMITMENTS |
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The company operates a defined contribution pension scheme. The assets of the pension schemes |
are held separately from those of the company, in independently administered funds. The pension cost |
charge in the year £51,173 (2019 - £46,499) represents contributions payable by the company to the |
funds. At the end of the period there were contributions outstanding of £4,471 (2019 - £5,087). |
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13. | RELATED PARTY DISCLOSURES |
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During the year ended 31 May 2020 the company received sales of £1,700,000 from its subsidiary |
Hydro Industries Egypt LLC. These amounts in respect of the stage of completion of the contract are |
included in Accrued income at the balance sheet date. |
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14. | POST BALANCE SHEET EVENTS |
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In July 2020 Hydro Industries Limited entered into a convertible loan arrangement through the |
shareholders and the UK Government's Coronavirus Future Fund. On 20 August 2020, the Board |
resolved to accept an offer of further investment. This offer of investment was for a sum in excess of |
25% (but less than 100%) of the aggregate value of the Convertible Loan Notes in issue at that date. |
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According to the terms of the Convertible Loan Agreement (CLA), the investment will trigger the |
conversion of the Convertible Loan Notes into Ordinary shares of the Company (at a 20% discount to |
the price of the shares issued in relation to the offer of investment) on the election of the Lender |
Majority (meaning the holders of in excess of 50% of the total Convertible Loan Notes that remain |
outstanding under the CLA, excluding those held by the Future Fund). Confirmation was given to the |
Board that the Lender Majority will elect to trigger conversion. |
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Accordingly, it was resolved that all necessary notices and documentation were to be issued in order to |
effect the investment and Loan Note conversion. |
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15. | ULTIMATE CONTROLLING PARTY |
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The directors do not consider there to be an ultimate controlling party. |