ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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FOR THE YEAR ENDED 31 MARCH 2021
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HYDROCK HOLDINGS LIMITED
COMPANY INFORMATION
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HYDROCK HOLDINGS LIMITED
CONTENTS
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HYDROCK HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2021
The directors present their strategic report for Hydrock Holdings Limited (“the Company” or “HH”) and subsidiaries for the year ended 31 March 2021.
The principal activity of HH in the year under review was that of a holding company and the provision of consultancy and management services.
HH is a holding company, owning the entire issued share capital of three trading entities:
∙Hydrock Consultants Limited (“HCS”), acquired on 15th August 2018;
∙Hydrock MRB Limited (“HMRB”), acquired on 23rd October 2019; and
∙Kelly Taylor & Associates Limited (“KTA”), acquired on 2nd March 2021.
These accounts consolidate HH, HCS, HMRB and KTA together with three dormant entities Willoughby (1000) Limited, Hydrock NMC Limited (dissolved on 5th January 2021) and HRCP Limited (dissolved on 5th January 2021) (all together “the Group” or “Hydrock”).
∙Group turnover in the year was £42m (2020 - £38.7m), an increase of 8.6%.
∙Gross profits increased by 20% to £12.9m at a margin of 31% (2020 - £10.7m, 28%).
∙Operating profits before exceptional items for the year were £1.9m (2020 - £470k) reflecting a margin of 4.7% (2020 – 1.3%).
These represent Hydrock’s best year end trading results to date and the directors are very pleased with the results. The financial year started with the Covid-19 pandemic and the UK going into lockdown. The directors identified the potential risks from the pandemic early on and implemented a business continuity plan, as reported in last year’s statutory accounts. This plan was successfully executed and the Group returned to normal trading levels soon after.
The success of this approach enabled the directors to focus on continued growth and investment in Hydrock. In addition to the improved financial performance reported on above, this focus included:
∙Robust development of a key client programme with dedicated client teams ensuring the highest service standards – in 2020/21 these organisations represented an important proportion of our fee income.
∙Diversification and extension of our services through analysis of market drivers, anticipating the emerging areas of greatest need for our clients, most notably: responding to the environmental, social and governance (“ESG”) needs of property investors; battery storage development; the proliferation of data centres; and carbon conscious building design.
∙Identification, research and client outreach around four strategic market opportunities, including the future of the high street and strategic land masterplanning. With associated client targeting and marketing communications this approach is enhancing the impact of Hydrock’s brand in the market.
∙Strategic business hires in key sectors, locations and practice areas as part of the increase to our staff numbers to 534 by year end (an increase of 15.6% on the prior year end). Notable hires were made in areas such as data centre design, building physics, battery storage development and in key locations such as Birmingham, Manchester and Glasgow.
∙Refinancing the business to generate additional growth capital and repaying all liabilities owed to our employees and third parties created at the start of the pandemic.
Hydrock also completed the strategic acquisition of KTA towards the end of the year. With three decades of experience, KTA is known in the market as a leading specialist consultancy in the field of logistics and distribution delivering mechanical and electrical engineering and energy and sustainability services.
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HYDROCK HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
Group trading for the new financial year to 31 March 2022 has continued with strong growth in sales and profits. The half year results to 31 September 2021 has recorded sales of £27.7m, an increase of 35% on 2020, with underlying operating profits of £3m, also an increase of 35% on the prior year. There is also a strong order book at near record levels, so the directors remain highly optimistic about the current financial year.
The balance sheet at year end reflects the strong trading results, with net assets of £4.3m (2020 - £3.6m).
Covid-19
Hydrock’s business continuity plan, as explained in last year’s statutory accounts, was successfully implemented in the four months of March to June 2020. After the initial shock and disruption of the pandemic, our staff quickly adapted to a new way of working. Our clients and their projects also adapted, with our activity levels reverting to pre-pandemic levels from June 2020 onwards. Hydrock’s strong management, culture and processes enabled us to manage, and ultimately grow still further in the face of unknown factors.
This successful response enabled the directors and senior management to focus on more medium-term initiatives structured around Hydrock’s strategic pillars of ‘Client Satisfaction’, ‘Staff Engagement’ and ‘Financial Performance’, underpinned by ‘Technical Excellence’, ‘Innovation’ and our ‘Brand’. These elements are included in the Hydrock Five Year Strategic Plan which is updated annually and shared with all employees and stakeholders.
The directors continue to closely monitor the business and wider economy for any further impact from Covid-19. To date the actions taken have been sufficient and as stated in the Business Review, the new financial year has started very positively. The directors will not hesitate to take further action should the risks and uncertainties change in the coming months recognising our culture, brand and management processes are strong enough to withstand such market issues.
Other Key Risks & Uncertainties
The Group’s other key risks and uncertainties comprise external market conditions and delays or cancellations of major projects. This is mitigated by ensuring there is no dependence on any particular client, project, geography or discipline. Hydrock reduces credit risk by monitoring the behaviour of clients and through the operation of credit management procedures in line with normal business practice.
A prudent liquidity and cash flow risk management policy is operated, forecasting short and medium-term working capital requirements, and maintaining sufficient cash and availability of funding through an adequate amount of committed credit facilities and borrowings.
The Group’s interest rate risk arises primarily from borrowings and other facilities used to fund working capital. Management monitor borrowing levels and market interest rates on a regular basis to identify and consider options to mitigate any exposure to ensure this remains appropriate to the Group’s circumstances. Hydrock also mitigates risk through our focus on market intelligence and market analysis. This is led by our Innovation Delivery team who support all practice areas with this analysis, and also develop appropriate new offerings to clients based on emerging trends and market intelligence, which ensure we are well-positioned to deliver new, long-term consultancy advisory work.
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HYDROCK HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
Hydrock monitors performance by a number of measures including monthly management accounts and dashboard reports. These include relevant KPIs such as profit and loss accounts (company and divisional), cash flow, overheads per fee earner, gross and operating margins, debtor days and other related statistics, work in progress, orders and prospects.
The Group also monitors key non-financial KPIs such as staff engagement, client satisfaction and health and safety matters. Hydrock has an excellent health and safety record, including having amassed 6.8 million hours without a reportable accident (as defined by RIDDOR 2013).
The Group holds regular board and various other formal meetings covering operations, business development, marketing, IT and HR.
Introduction
The directors act in good faith to continually balance the success of the Group and the rewards to its shareholders against many other factors, including ensuring that:
∙business is conducted morally and ethically, in line with Hydrock’s values and purpose;
∙short-term gains do not have an adverse consequence on the Group’s long-term strategy, success and benefits;
∙employee welfare, training and interests are taken care of;
∙customer and supplier relationships are strong, mutually beneficial and comply with the Group’s policies (such as anti-bribery and corruption, anti-slavery and human trafficking and corporate social responsibility); and
∙the Group acts as a ‘force for good’ both through its delivery of services and as a member of its local communities, with any impacts considered as a result of Hydrock’s operations.
Our Values
Underpinning this approach is Hydrock’s ethos, communicated to all staff and stakeholders, including clients and suppliers, using our ten values:
1.We create a genuine, fun atmosphere in our work and a place where people can express themselves.
2.We believe in the strength of diversity and inclusivity in our workforce.
3.We are ambitious and we keep our promises.
4.We are committed to giving something back.
5.We respect each other and work for a common goal.
6.We create an environment where our people can thrive.
7.We believe our families come first.
8.When challenges arise, we step forwards, not backwards.
9.We want our staff to take pride in and ownership of the work they do.
10.We continually seek to improve our governance and sustainability.
Despite the challenges and restrictions posted by the pandemic during the financial year, Hydrock and its people have continued to respect and follow these values. For example:
∙the success of the business continuity plan ensured Hydrock traded throughout the pandemic, meeting our obligations to employees, clients, suppliers and other stakeholders;
∙all our employees were equipped to work from home safely and efficiently at the start of the first national lockdown. This was followed with regular contact, online events, Covid-compliant gatherings, launching the Hydrock “Wellbeing Hub” and regular communications (including the launch of “Hydrock TV”);
∙remote and in person training and mentoring continued, reinforced by the appointment of a dedicated Learning & Development manager to deliver company wide programmes for all staff;
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HYDROCK HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
∙inductions for new staff were hosted online with remote team building exercises and social activities.
∙Hydrock continued to deliver on client projects, as evidenced by the record high in sales;
∙supplier payments were maintained and any liabilities created during the early months of the pandemic were fully repaid to all parties;
∙we hosted a series of online webinars and panel debates for clients on a range of emerging issues, such as the roadmap to net zero, battery storage and the new fire safety bill. In total, these online events attracted over 2,000 people; and
∙we introduced various initiatives around our ESG objectives. These include “The Hydrock Sustainability Plan 2021”, “Hydrock’s Road Map to Net Zero”, the ESG Working Group and a new travel policy and portal encouraging more sustainable travel. This is also our first year of producing a “SECR Compliance Statement”, as set out further on in this report.
Recruiting, retaining and developing a highly skilled workforce is a core part of Hydrock’s continued success and future strategy. The Group is committed to a policy of recruitment and promotion on the basis of aptitude and ability without discrimination of any kind and to training for the existing and future needs of the business. Full and fair consideration is given to all applications for employment made by disabled persons, who are also given equal consideration for training and career development.
With the hire of a highly experienced Learning and Development Manager, we have established a series of career and personal development programmes for staff from graduate entry level to the most senior directors. These programmes all provide active learning experiences around areas such as negotiation skills, personal brand, leadership and emotional intelligence. In addition, all employees have had the opportunity to take part in mindfulness sessions, and attend webinars on emerging areas such as managing remote teams, and how to work effectively from home.
Hydrock communicates actively and regularly with its employees using a wide variety of initiatives. These include:
∙monthly “check in” reviews;
∙regular staff pulse surveys;
∙webcasts from the CEO;
∙Hydrock TV;
∙bulletins detailing changes and updates to processes;
∙online social activities, including a series of competitions at Christmas which also included a company choir;
∙a company Intranet that is updated daily with news and information.
Regular meetings are also held between staff and management at all levels across the business.
A five year strategic plan is produced every year including historical results and forecasts. This is circulated to all staff, followed by presentations to each office and discussion and debate.
Employee involvement in Hydrock’s performance is encouraged and maintained by disclosure of financial results and participation in a companywide profit-sharing bonus scheme. Fifty five employees, including the Directors, also hold an equity interest in Hydrock.Recruiting and retaining a highly skilled workforce is a core part of Hydrock’s continued success and future strategy.
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HYDROCK HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
Client retention and satisfaction is a core strategic pillar for Hydrock, with the delivery of exceptional advice and service of paramount importance to ensure we continue to achieve the high level of repeat business that we currently enjoy.
The importance of this is emphasised throughout the business and is a core part of our ongoing learning and development programmes which include sessions that help staff to understand and recognise the importance of developing long-term, trusted relationships with our clients.
We monitor client satisfaction through a client feedback programme with recommendation scores which averaged at 8.75 out of 10 in 2020/21. KPI’s are in place to perform regular reviews with our key clients.
Hydrock also regularly uses a wide pool of third-party suppliers, including other consultants and sub-contractors. Their involvement is often a critical part of the overall service Hydrock delivers to clients, hence it is important for suppliers to operate at the same high professional standards as Hydrock. Suppliers are engaged through a comprehensive procurement process that ensures effective controls are in place for competency, compliance, technical quality and financial strength.
Policy & Strategy
Hydrock has committed to a science-based target initiative of becoming net zero carbon in our business operations by 2030 with an ambition to achieve this by 2025. This includes Greenhouse Gas (“GHG”) Protocol Scope 1 and 2 emissions across all offices. Hydrock has also been exploring opportunities for further carbon reduction throughout our corporate value chain.
Responsibility
The Hydrock directors take ultimate responsibility for delivering our net zero objectives. The review and technical planning aspects are delivered by the Hydrock Smart Energy and Sustainability Division. This team specialises in carbon management and have produced the Hydrock Sustainability Plan 2021. The implementation of specific initiatives are delegated to the Hydrock Sustainability Working Group.
Data Collection
Hydrock has carried out a detailed assessment of the buildings in which we operate and the vehicles we use for business travel purposes. For fuel usage, a fuel-based approach was used. The majority of oil, gas and electricity data was taken directly from meter readings. However, when a reading was unavailable, which was rare, then a value was calculated using pro-rata extrapolation, benchmarking or comparative data from a similar asset, as instructed by the reporting guidance.
Our organisation understands that Scope 3 emissions can represent the largest source of emissions for companies and present the most significant opportunities to influence GHG reductions. We are actively developing a full corporate GHG emissions inventory in line with GHG Protocol.
Hydrock supports the UK Green Building Council’s framework for net zero carbon buildings which will ensure that our consultancy work will help to the UK construction and property industry to transition new and existing buildings to becoming net zero carbon by 2050.
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HYDROCK HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
This report was approved by the board and signed on its behalf.
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HYDROCK HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2021
The directors present their report and the financial statements for the year ended 31 March 2021.
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 directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' reports may differ from legislation in other jurisdictions.
The profit for the year, after taxation, amounted to £755,325 (2020: loss £60,219).
No dividends (2020: £nil) were paid during the year.
The directors who served during the year were:
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HYDROCK HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
All future developments are disclosed within the strategic report.
Information in relation to the engagement with employees, engagement with suppliers, customers and other and greenhouse gas emissions, energy consumption and energy efficiency action are disclosed within the strategic report.
There have been no other significant events affecting the Group since the year end.
The auditors, Bishop Fleming LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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HYDROCK HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HYDROCK HOLDINGS LIMITED
We have audited the financial statements of Hydrock Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2021, which comprise the Consolidated Statement of comprehensive income, the Consolidated and Company Statements of financial position, the Consolidated Statement of cash flows, the Consolidated and Company Statement of changes in equity, the Consolidated analysis of net debt 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).
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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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HYDROCK HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HYDROCK 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.
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HYDROCK HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HYDROCK 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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:
∙The nature of the industry and sector, control environment and business performance;
∙Results of our enquires of management and directors in relation to their own identification and assessment of the risks of irregularities within the Group; and
∙any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; the internal controls established to mitigate risks of fraud or noncompliance with laws and regulations.
As a result of these procedures, we have considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
∙Revenue recognition cut off;
∙Work in progress (accrued income) valuation;
∙Bad debt provision valuation;
∙Valuation of investments; and
∙Valuation of goodwill
In common with all audits under ISAs (UK) we are also required to perform specific procedures to respond to the risk of management override.
We have also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focussing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures within the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, Financial Reporting Standard 102 and UK tax legislation. In addition we considered provision of other laws and regulations that do not have a direct effect on the financial statements but compliance with may be fundamental for the Group’s ability to operate or avoid a material penalty. These included health and safety regulations; employment legislation; and data protection laws.
Our audit procedures performed to respond to the risks identified included, but were not limited to:
∙Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
∙Reviewing the financial statement disclosures and testing to supporting documentation to assess the recognition of revenue;
∙Challenging assumptions and judgments made by management in their significant accounting estimates;
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
∙Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
∙Reviewing board minutes;
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HYDROCK HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HYDROCK HOLDINGS LIMITED (CONTINUED)
∙Identifying and testing journal entries, evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud;
∙Reviewing post year end cash receipts to assess recoverability of debts; and
∙Reviewing financial performance and valuations of subsidiaries to assess to any indications of impairment.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from an error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
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
Statutory Auditors
10 Temple Back
BS1 6FL
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HYDROCK HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021
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HYDROCK HOLDINGS LIMITED
REGISTERED NUMBER:11000495
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 21 to 42 form part of these financial statements.
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HYDROCK HOLDINGS LIMITED
REGISTERED NUMBER:11000495
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 21 to 42 form part of these financial statements.
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HYDROCK HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
Page 16
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HYDROCK HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
Page 17
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HYDROCK HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2021
Page 18
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HYDROCK HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
Page 19
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HYDROCK HOLDINGS LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2021
Page 20
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Hydrock Holdings Limited is a private company, limited by shares, registered in the United Kingdom. The Company’s registered number and registered office address can be found on the General Information page.
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.
The directors have performed a formal review to assess whether going concern is an appropriate basis for the preparation of the Group’s accounts. This comprised preparing detailed financial forecasts for the two years ending 31 March 2023, assessing budgeting accuracy from prior periods, a consideration of current trading and Hydrock’s funding facilities.
The Group’s forecasts indicate continued profitable and cash generative trading, backed by a high order book offering good medium term visibility. This is reinforced by the strong start to the current financial year (as explained in the Strategic Report). Hydrock refinanced in November 2020, providing it with sufficient debt and working capital facilities for its medium term requirements. The Group also benefits from the continued support from its private equity investor, BGF. Given all of these points, the directors have a reasonable expectation that Hydrock has adequate resources to continue in operational existence for the foreseeable future. They have therefore concluded that going concern is an appropriate basis for the preparation of the Group’s accounts.
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
2.ACCOUNTING POLICIES (continued)
Functional and presentation currency
Transactions and balances
Page 22
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
2.ACCOUNTING POLICIES (continued)
Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.
Page 23
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
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.
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
2.ACCOUNTING POLICIES (continued)
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 and reducing balance basis.
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 profit or loss.
Page 25
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
2.ACCOUNTING POLICIES (continued)
Provisions are charged as an expense to profit or loss 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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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 27
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 28
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 29
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 30
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
12.TAXATION (CONTINUED)
There were no factors that may affect future tax charges.
Page 31
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 32
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 33
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 34
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 35
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 36
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 37
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 38
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
During the year the Company issued 1,362 Ordinary G shares with an aggregate nominal value of £1,362. The fair value of the consideration received was £1,362.
Rights, preferences and restrictions The different classes of Ordinary shares shall not rank pari passu for dividend purposes. Subject to Investor Consent (as defined in the Company’s articles of association), the balance of any profits of the Company resolved to be distributed in any financial year or period shall be distributed amongst the holders of each (or any one or more) class of Ordinary Shares pro rata according to the number of ordinary shares held in each class. A Preferred Ordinary shares are entitled to receive, in priority to the holders of all other shares the Long Term Dividend (as defined in the Company’s articles of association). B Preferred Ordinary shares and C Preferred Ordinary shares have no income entitlement. On the return of capital the A Preference Return (as defined in the Company’s articles of association) will be made to holders of A Ordinary shares and A Preferred Ordinary shares pro rata as nearly as possible to the amount Creditors as Paid Up (as defined by the Company’s articles of association) on such shares held by them. For A Preferred Ordinary shares, on liquidation their entitlement will be capped at 40% of the proceeds. B Ordinary, C Ordinary, D Ordinary and G Ordinary shall rank behind all preference shares and A Ordinary shares in equal measure. Capital distributions to B Preferred Ordinary shares and C Preferred Ordinary shares will be made pro rata as possible to the amount credited as Paid Up on such shares held by them, subject to the rights of the holders of the A Preferred Ordinary shares and A Ordinary shares. A, B and D Ordinary share classes have full voting rights, C and G Ordinary shares have no voting rights. All preferred share classes carry no voting rights and are not redeemable.
Share premium account
Profit and loss account
Page 39
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 40
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
26.BUSINESS COMBINATIONS (CONTINUED)
The Group operates a defined contributions 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 £943,203 (2020: £1,043,876). Contributions totalling £192,469 (2020: £170,476) were payable to the fund at the reporting date and are included in creditors.
Page 41
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HYDROCK HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Page 42
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