REGISTERED NUMBER:
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HYDRO INDUSTRIES LIMITED |
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AUDITED FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 MAY 2021 |
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REGISTERED NUMBER:
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HYDRO INDUSTRIES LIMITED |
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AUDITED FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 MAY 2021 |
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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 2021 |
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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 | 11 |
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HYDRO INDUSTRIES LIMITED |
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COMPANY INFORMATION |
FOR THE YEAR ENDED 31 MAY 2021 |
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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 2021 |
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2021 | 2020 |
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
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9 |
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NET ASSETS |
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CAPITAL AND RESERVES |
Called up share capital | 11 |
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Share premium |
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Capital redemption reserve |
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Retained earnings |
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SHAREHOLDERS' FUNDS |
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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 2021 |
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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 2021 |
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1. | STATUTORY INFORMATION |
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Hydro Industries Limited is a
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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 significant loss in the year, however continues to hold both net current assets and net assets at balance sheet date. The company has a cash at bank balance £6,516,853 as at 31 May 2021. |
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There remains 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. In considering the Covid-19 pandemic, the directors understand the situation remains uncertain with the virus causing disruption to economies globally. The directors have taken steps to mitigate the risk to the business, obtaining government support where required. Although there continues to remain 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 2021 |
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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 ; and |
- 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 2021 |
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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 recognised as income once any performance related conditions are met. Where grants are received in advance of the revenue recognition criteria being met, they are recognised as deferred income. |
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Grants received from the government for furloughed employees are recognised in profit or loss in the period in which the related expense is incurred. |
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The company has also benefitted from government assistance in the form of government backed loans. |
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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 2021 |
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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 2021 |
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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 |
Assets |
Plant and | under | Motor |
machinery | construction | vehicles | Totals |
£ | £ | £ | £ |
COST |
At 1 June 2020 |
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Additions |
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Disposals | ( |
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At 31 May 2021 |
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DEPRECIATION |
At 1 June 2020 |
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Charge for year |
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Eliminated on disposal | ( |
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Charge written back | - | (16,531 | ) | - | (16,531 | ) |
At 31 May 2021 |
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NET BOOK VALUE |
At 31 May 2021 |
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At 31 May 2020 |
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The net book value of tangible fixed assets include £124,704 in respect of assets held under hire purchase contracts as at 31 May 2021 (2020 - £23,040). |
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5. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
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COST |
At 1 June 2020 |
and 31 May 2021 |
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NET BOOK VALUE |
At 31 May 2021 |
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At 31 May 2020 |
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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 2021 |
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6. | STOCKS |
2021 | 2020 |
£ | £ |
Raw materials and consumables |
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Work-in-progress |
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Finished goods |
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7. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Trade debtors |
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Amounts owed by related parties | 2,417,786 | 263,194 |
Other debtors |
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Directors' current accounts | 51,814 | 81,529 |
Corporation tax recoverable |
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VAT |
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Prepayments |
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Accrued income | 1,111,337 | 1,700,000 |
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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 |
2021 | 2020 |
£ | £ |
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 | 40,549 | 9,806 |
Social security and other taxes |
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Other creditors |
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Net wages | 181 | - |
Pension creditor | 7,953 | 4,471 |
Accruals and deferred income |
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9. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2021 | 2020 |
£ | £ |
Hire purchase contracts |
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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 2021 |
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10. | SECURED DEBTS |
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The following secured debts are included within creditors: |
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2021 | 2020 |
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Hire purchase contracts | 149,894 | 27,529 |
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Obligations under hire purchase contracts are secured on the assets to which they relate. |
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11. | CALLED UP SHARE CAPITAL |
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Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2021 | 2020 |
value: | £ | £ |
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Ordinary A | £0.01 | 447 | 447 |
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Ordinary B | £0.01 | 464 | 403 |
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Ordinary C | £0.01 | 6 | 6 |
917 | 856 |
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Included in share capital issued during the year 2020/21 is a convertible loan obtained through the UK Futures Fund totalling £6.5m, of which 50% is funded by the UK Government. The convertible loan was obtained in July 2020, and converted into Ordinary B shares during the next fundraising round in September 2020. |
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12. | 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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13. | 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 £91,778 (2020 - £51,173) represents contributions payable by the company to the funds. At the end of the period there were contributions outstanding of £7,953 (2020 - £4,471). |
HYDRO INDUSTRIES LIMITED (REGISTERED NUMBER: 07364156) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MAY 2021 |
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14. | CAPITAL COMMITMENTS |
2021 | 2020 |
£ | £ |
Contracted but not provided for in the |
financial statements |
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The company have committed to the construction of a water treatment plant in Egypt as part of its ongoing contract with East Gas Company. The estimated cost of construction is £25m. This capital commitment has not been recognised in the financial statements at the balance sheet date. |
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15. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
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Included in debtors is an amount of £51,814 relating to overdrawn directors loan accounts. The loans are interest free and repayable on demand. |
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The key management personnel are the statutory directors. Remuneration to close family members of the directors totalled £42,321 during the year. |
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16. | RELATED PARTY DISCLOSURES |
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At the 31 May 2021 the company was owed £240,008 from its subsidiary Hydro Industries Egypt LLC, with a further £1,821,114 due from its subsidiary based in Saudi Arabia. |
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In addition, the company was owed £356,663 from an entity with common shareholders. Accruals of £185,216 are also included in creditors in relation to this entity. |
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Further a total of £33,557 is owed to companies with common shareholders. |
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During the year ended 31 May 2021, the company recorded sales totalling £1.1m from its subsidiary based in Saudi Arabia. These amounts are included in accrued income £1,104,000 at the balance sheet date. In addition, purchases totalling £234,596 were made to companies held by the company directors, and purchases totalling £179,412 were made to companies with common shareholders. |
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17. | ULTIMATE CONTROLLING PARTY |
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The directors do not consider there to be an ultimate controlling party. |