H2O Innovation UK Holding Limited
Annual report and financial statements
For the period ended 31 December 2023
H2O Innovation UK Holding Limited
Company information
Directors
M Blanchet
F Dugré
G Clairet-Baril
É Allain
Secretary
É Allain
Company number
12232606
Registered office
C/O McCarthy Tetrault
1 Angel Court
18th Floor
London
EC2R 7HJ
Auditor
DJH Audit Limited
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
ST1 5SQ
H2O Innovation UK Holding Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Group statement of comprehensive income
10
Group balance sheet
11 - 12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 33
H2O Innovation UK Holding Limited
Strategic report
For the period ended 31 December 2023
- 1 -

The directors present the strategic report for the period ended 31 December 2023.

Review of the business

On 8 December 2023, the entire share capital of the ultimate parent company, H2O Innovation Inc, was acquired by Ember SPV I Purchaser Inc. The acquisition led to an alignment of the group’s accounting period to 31 December. The change in accounting period resulted in a short period of six months to 31 December 2023, causing apparent fluctuations in the results.

 

Throughout this six-month period, we have continued to see strong levels of sales, which has been achieved by expanding our efforts through various distributors outside of the UK.

 

The cost of raw materials saw an average price decrease, returning back to levels before the COVID-19 pandemic. Freight costs also reduced globally. As a result, the total cost of sales decreased by 21% (when extrapolated across a twelve-month period). We do not expect to have any further significant decrease.

 

Administrative expenses increased by 12% (once extrapolated across a twelve-month period). These costs increased as a result of general rises in costs in most administrative areas of the business.

 

The only major changes to the group balance sheet relate to creditors falling due within one year and creditors falling due after one year. Amounts falling due under one year have reduced by CAD 7.3m to CAD 3.2m and amounts falling due after one year have increased by CAD 4.3m to CAD 28.6m. The main reason for these changes relate to deferred consideration due from the group being paid by the parent company, thus creating an intercompany loan with the parent company that is due in over one year.

 

Cash balances have also reduced in the group from CAD 4.8m to CAD 3.1m. The main reasons for this relate to the payment of dividends and group interest charges in the period.

Principal risks and uncertainties

The group’s strategy includes identifying and mitigating potential threats to the financial health of the business. These are regularly assessed, with the following being considered the principal risks that are faced by the group:

 

Foreign currency risk

The group’s presentational currency is in CAD$, however it regularly trades within the UK in GBP£ and outside the UK in CAD$, USD$, CLP$ and EUR€. The group does not hedge transactions, however mitigates any risks posed by purchasing in the same currency it sells. This group is also part of the wider H2O group, that carries a global presence and so is able to take advantage of this where possible.

 

Market competition

We consider market competition a risk for the group, however the group holds the intellectual property behind specific products and also aims to build strong customer relationships, mitigating this threat.

Key performance indicators

The directors assess the financial performance of the group by reviewing key financial benchmarks.

 

Operating profit is the chosen benchmark which in the directors’ opinions, best reflects the performance of the business during the period. Operating profit for the current period to December 2023 is CAD 3.52m (when extrapolated over a twelve-month period) and is an increase on the previous period of CAD 928k.

 

Gross profit margin is another benchmark, and has grown by 10%, from June 2023 at 48% to December 2023 at 58%. The reasons for this growth can be attributed to the decrease in cost of sales as discussed above.

H2O Innovation UK Holding Limited
Strategic report (continued)
For the period ended 31 December 2023
- 2 -
Other information and explanations

Future developments

The group continues to focus on the growth of the overseas customer base. The group hope to achieve this by continuing to invest in its employees, with both recruitment and retention.

 

There has also been an issue of equity shares in a subsidiary, H2O Innovation Europe, S.L., since the year-end which created a non-controlling interest within the H2O Innovation UK Holding Limited group from 1st January 2024. Further information in relation to this can be found in Note 24 to the Financial Statements.

On behalf of the board

M Blanchet
Director
27 November 2024
H2O Innovation UK Holding Limited
Directors' report
For the period ended 31 December 2023
- 3 -

The directors present their annual report and financial statements for the period ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of an investment holding company.

 

The principal activity of the group continued to be that of the development, manufacture and sale of industrial water treatment chemicals.

Results and dividends

The results for the period are set out on page 9.

Ordinary dividends were paid amounting to CAD 1,458,649. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

M Blanchet
F Dugré
G Clairet-Baril
É Allain
Post reporting date events

Since the balance sheet date. but before the approval of the financial statements, there has been an issue of equity shares by a subsidiary, H2O Innovation Europe, S.L., which created a non-controlling interest within the H2O Innovation UK Holding Limited group from 1st January 2024. Further information in relation to this can be found in Note 24 to the Financial Statements.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

H2O Innovation UK Holding Limited
Directors' report (continued)
For the period ended 31 December 2023
- 4 -
Strategic report

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
M Blanchet
F Dugré
Director
Director
27 November 2024
H2O Innovation UK Holding Limited
Independent auditor's report
To the members of H2O Innovation UK Holding Limited
- 5 -
Opinion

We have audited the financial statements of H2O Innovation UK Holding Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’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.

Conclusions relating to going concern

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 and 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.

H2O Innovation UK Holding Limited
Independent auditor's report (continued)
To the members of H2O Innovation UK Holding Limited
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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 auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

H2O Innovation UK Holding Limited
Independent auditor's report (continued)
To the members of H2O Innovation UK Holding Limited
- 7 -

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities,

including fraud and non-compliance with laws and regulations, was as follows:

 

 

We assessed the susceptibility of the financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

To address the risk of fraud through management bias and override of controls, we:

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Other matters which we are required to address

This is the first financial period that the company has prepared consolidated financial statements, therefore the consolidated figures presented for the prior period have not been audited previously.

 

The parent company's individual company financial statements were audited in the prior period.

 

As a result of the above, the comparative financial statements, except for the company balance sheet and the company statement of changes in equity, are unaudited.

H2O Innovation UK Holding Limited
Independent auditor's report (continued)
To the members of H2O Innovation UK Holding Limited
- 8 -

Use of our 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 auditor's 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.

Nicola Johnson, Senior Statutory Auditor
For and on behalf of
27 November 2024
DJH Audit Limited
Accountants
Statutory Auditor
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
ST1 5SQ
H2O Innovation UK Holding Limited
Group profit and loss account
For the period ended 31 December 2023
- 9 -
Period
Year
ended
ended
31/12/2023
30/06/2023
Notes
CAD
CAD
Turnover
3
13,579,901
28,085,376
Cost of sales
(5,773,261)
(14,667,739)
Gross profit
7,806,640
13,417,637
Administrative expenses
(6,045,578)
(10,823,036)
Operating profit
4
1,761,062
2,594,601
Interest receivable and similar income
6
45,021
1,741
Interest payable and similar expenses
7
(784,699)
(1,900,223)
Profit before taxation
1,021,384
696,119
Tax on profit
8
(607,452)
(691,097)
Profit for the financial period
21
413,932
5,022
Profit for the financial period is all attributable to the owner of the parent company.
H2O Innovation UK Holding Limited
Group statement of comprehensive income
For the period ended 31 December 2023
- 10 -
Period
Year
ended
ended
31/12/2023
30/06/2023
CAD
CAD
Profit for the period
413,932
5,022
Other comprehensive income
Currency translation loss taken to retained earnings
(309,922)
(94,491)
Other comprehensive income for the period
(309,922)
(94,491)
Total comprehensive income for the period
104,010
(89,469)
Total comprehensive income for the period is all attributable to the owner of the parent company.
H2O Innovation UK Holding Limited
Group balance sheet
As at 31 December 2023
31 December 2023
- 11 -
31/12/2023
30/06/2023
Notes
CAD
CAD
CAD
CAD
Fixed assets
Goodwill
10
28,629,418
29,898,989
Other intangible assets
10
80,004
110,266
Total intangible assets
28,709,422
30,009,255
Tangible assets
11
1,567,762
1,651,646
30,277,184
31,660,901
Current assets
Stocks
14
3,217,420
3,666,170
Debtors
15
8,659,897
9,343,413
Cash at bank and in hand
3,105,735
4,835,022
14,983,052
17,844,605
Creditors: amounts falling due within one year
16
(3,171,572)
(10,439,734)
Net current assets
11,811,480
7,404,871
Total assets less current liabilities
42,088,664
39,065,772
Creditors: amounts falling due after more than one year
17
(28,628,003)
(24,239,795)
Provisions for liabilities
Deferred tax liability
18
370,742
381,419
(370,742)
(381,419)
Net assets
13,089,919
14,444,558
Capital and reserves
Called up share capital
20
1,678
1,678
Share premium account
21
11,247,917
11,247,917
Profit and loss reserves
21
1,840,324
3,194,963
Total equity
13,089,919
14,444,558
H2O Innovation UK Holding Limited
Group balance sheet (continued)
As at 31 December 2023
31 December 2023
- 12 -

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 27 November 2024 and are signed on its behalf by:
27 November 2024
M Blanchet
F Dugré
Director
Director
Company registration number 12232606 (England and Wales)
H2O Innovation UK Holding Limited
Company balance sheet
As at 31 December 2023
31 December 2023
- 13 -
31/12/2023
30/06/2023
Notes
CAD
CAD
CAD
CAD
Fixed assets
Investments
12
46,501,892
46,501,892
Current assets
Debtors
15
196,750
16,048
Cash at bank and in hand
51,131
27,390
247,881
43,438
Creditors: amounts falling due within one year
16
(4,030,630)
(9,520,073)
Net current liabilities
(3,782,749)
(9,476,635)
Total assets less current liabilities
42,719,143
37,025,257
Creditors: amounts falling due after more than one year
17
(28,628,003)
(24,239,795)
Net assets
14,091,140
12,785,462
Capital and reserves
Called up share capital
20
1,678
1,678
Share premium account
21
11,247,917
11,247,917
Profit and loss reserves
21
2,841,545
1,535,867
Total equity
14,091,140
12,785,462

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company's profit for the period was CAD 2,764,327 (2023 - CAD 2,347,420 loss).

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 27 November 2024 and are signed on its behalf by:
27 November 2024
M Blanchet
F Dugré
Director
Director
Company registration number 12232606 (England and Wales)
H2O Innovation UK Holding Limited
Group statement of changes in equity
For the period ended 31 December 2023
- 14 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
CAD
CAD
CAD
CAD
Balance at 1 July 2022
1,678
11,247,917
3,284,432
14,534,027
Year ended 30 June 2023:
Profit for the year
-
-
5,022
5,022
Other comprehensive income:
Currency translation differences
-
-
(94,491)
(94,491)
Total comprehensive income
-
-
(89,469)
(89,469)
Balance at 30 June 2023
1,678
11,247,917
3,194,963
14,444,558
Period ended 31 December 2023:
Profit for the period
-
-
413,932
413,932
Other comprehensive income:
Currency translation differences
-
-
(309,922)
(309,922)
Total comprehensive income
-
-
104,010
104,010
Dividends
9
-
-
(1,458,649)
(1,458,649)
Balance at 31 December 2023
1,678
11,247,917
1,840,324
13,089,919
H2O Innovation UK Holding Limited
Company statement of changes in equity
For the period ended 31 December 2023
- 15 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
CAD
CAD
CAD
CAD
Balance at 1 July 2022
1,678
11,247,917
3,883,287
15,132,882
Year ended 30 June 2023:
Loss and total comprehensive income for the year
-
-
(2,347,420)
(2,347,420)
Balance at 30 June 2023
1,678
11,247,917
1,535,867
12,785,462
Period ended 31 December 2023:
Profit and total comprehensive income
-
-
2,764,327
2,764,327
Dividends
9
-
-
(1,458,649)
(1,458,649)
Balance at 31 December 2023
1,678
11,247,917
2,841,545
14,091,140
H2O Innovation UK Holding Limited
Group statement of cash flows
For the period ended 31 December 2023
- 16 -
31/12/2023
30/06/2023
Notes
CAD
CAD
CAD
CAD
Cash flows from operating activities
Cash generated from operations
27
1,561,717
4,163,273
Income taxes refunded/(paid)
66,046
(897,492)
Net cash inflow from operating activities
1,627,763
3,265,781
Investing activities
Purchase of intangible assets
-
(18,807)
Purchase of tangible fixed assets
(58,791)
(163,059)
Interest received
45,021
1,741
Net cash used in investing activities
(13,770)
(180,125)
Financing activities
Interest paid
(1,917,658)
(514,367)
Dividends paid to equity shareholders
(1,458,649)
-
0
Net cash used in financing activities
(3,376,307)
(514,367)
Net (decrease)/increase in cash and cash equivalents
(1,762,314)
2,571,289
Cash and cash equivalents at beginning of period
4,835,022
2,110,391
Effect of foreign exchange rates
33,027
153,342
Cash and cash equivalents at end of period
3,105,735
4,835,022
H2O Innovation UK Holding Limited
Notes to the group financial statements
For the period ended 31 December 2023
- 17 -
1
Accounting policies
Company information

H2O Innovation UK Holding Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is C/O McCarthy Tetrault, 1 Angel Court, 18th Floor, London, EC2R 7HJ.

 

The group consists of H2O Innovation UK Holding Limited and all of its subsidiaries.

 

The group has sites in the United Kingdom, Spain and Chile and so its principal places of business are:

- 3a Aston Way, Middlewich, Cheshire, United Kingdom, CW10 0HS

- Calle Londres, 38, Las Rozas (Madrid), Spain

- Av, Nueva Providencia 1363 Of, 1304 Providencia, Santiago de Chile, Chile

1.1
Reporting period

The financial statements are presented for the shorter 6 month period ended 31 December 2023 due to the acquisition of the group during the period. The financial year end has therefore been changed to align with the new ultimate parent company. The comparative information is for the year ended 30 June 2023 and is therefore not entirely comparable.

1.2
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in Canadian Dollars ("CAD"), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest CAD.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
- 18 -
1.3
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company H2O Innovation UK Holding Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.5
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.6
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
- 19 -
1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 15 years.

1.8
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Software
20% and 33.33% per annum on cost
Patents & licences
20% per annum on cost
1.9
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Freehold buildings
20% per annum on cost
Leasehold improvements
10% per annum on cost
Plant and equipment
10% to 50% per annum on cost
Fixtures and fittings
10% to 50% per annum on cost
Computers
25% to 50% per annum on cost

Freehold land is not depreciated.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.10
Fixed asset investments

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.11
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
- 20 -

Recoverable amount is the higher of fair value less costs to sell and value in use.

 

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

1.12
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stock cost is calculated using the weighted average method.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.13
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand and cash at bank.

1.14
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
- 21 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and loans from fellow group companies, 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. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.15
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.16
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
- 22 -
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.17
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.18
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.19
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
- 23 -
1.20
Foreign exchange

Transactions in currencies other than Canadian Dollars are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

 

The financial statements of subsidiaries with a functional currency other than the presentation currency, Canadian Dollars, were translated to Canadian Dollars using the following methods:

 

- The assets and liabilities of subsidiaries at the balance sheet date were translated at the exchange rate at the period end date;

- The income and expenditure of the subsidiaries were translated using the average exchange rates for the period;

- Any remaining exchange rate variances are recognised separately within Other Comprehensive Income.

1.21

Share based payment transactions

The parent company of H2O Innovation UK Holding Limited operates a share based compensation plan. The fair value of employee services received in exchange for the grant of options is recognised as an expense in the financial statements of H2O Innovation UK Holding Limited for staff employed within the H2O Innovation UK Holding Limited group, due to these staff members being employees of H20 Innovation UK Holdings Limited group companies and not the parent company.

 

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest.

 

The expense in relation to options over the parent company’s shares granted to employees of this group are recognised by the group as a capital contribution.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

Critical judgements in applying the Group's accounting policies

 

In the director's opinion there are no critical judgements, apart from those involving estimations (dealt with separately below), that they have made in applying group's accounting policies and that have had a significant effect on the amounts recognised in the financial statements.

H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 24 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Amortisation rates and estimated useful life of goodwill

Goodwill has been recognised on acquisitions made in prior periods. Management have estimated the useful economic life of goodwill based on the time period over which ongoing benefits and cash flows are anticipated from the acquired customer relationships, trademarks and non-compete arrangements of the businesses acquired. Uncertainties in these estimates relate to the actual economic useful life of the goodwill.

3
Turnover and other revenue
31/12/2023
30/06/2023
CAD
CAD
Turnover analysed by geographical market
United Kingdom
628,353
1,378,832
Europe
2,971,848
3,401,517
Rest of the World
9,979,700
23,305,027
13,579,901
28,085,376
31/12/2023
30/06/2023
CAD
CAD
Other revenue
Interest income
45,021
1,741
4
Operating profit
31/12/2023
30/06/2023
CAD
CAD
Operating profit for the period is stated after charging:
Exchange losses
223,953
802,064
Fees payable to the group's auditor for the audit of the group's financial statements
25,419
15,425
Depreciation of owned tangible fixed assets
95,707
189,555
Loss on disposal of tangible fixed assets
24,880
-
Amortisation of intangible assets
1,296,249
2,596,465
Operating lease charges
335,490
480,081
H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
- 25 -
5
Employees

The average monthly number of persons (including directors) employed by the group and company during the period was:

Group
Company
31/12/2023
30/06/2023
31/12/2023
30/06/2023
Number
Number
Number
Number
Office
11
11
-
-
Sales / Innovation
4
4
-
-
Production / Warehouse / Laboratory
22
20
-
-
Total
37
35
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
31/12/2023
30/06/2023
31/12/2023
30/06/2023
CAD
CAD
CAD
CAD
Wages and salaries
1,511,243
2,888,919
-
0
-
0
Social security costs
261,630
465,708
-
-
Pension costs
73,572
105,770
-
0
-
0
1,846,445
3,460,397
-
0
-
0
6
Interest receivable and similar income
31/12/2023
30/06/2023
CAD
CAD
Interest income
Interest on bank deposits
1,010
1,741
Other interest income
44,011
-
Total income
45,021
1,741
7
Interest payable and similar expenses
31/12/2023
30/06/2023
CAD
CAD
Interest on bank overdrafts and loans
71,492
26,333
Other interest on financial liabilities
713,207
1,180,618
Other interest
-
693,272
Total finance costs
784,699
1,900,223
H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
- 26 -
8
Taxation
31/12/2023
30/06/2023
CAD
CAD
Current tax
Corporation tax on profits for the current period
619,076
637,406
Deferred tax
Origination and reversal of timing differences
(11,624)
53,691
Total tax charge
607,452
691,097

The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:

31/12/2023
30/06/2023
CAD
CAD
Profit before taxation
1,021,384
696,119
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (30/06/2023: 20.50%)
255,346
142,704
Tax effect of expenses that are not deductible in determining taxable profit
897
2,874
Unutilised tax losses carried forward
-
0
25,551
Effect of change in corporation tax rate
-
(27,649)
Amortisation on assets not qualifying for tax allowances
324,062
520,524
Research and development tax credit
(89,639)
(73,194)
Under/(over) provided in prior years
116,786
128,985
Capital allowances
-
0
(13,074)
Impact of unrealised profit adjustments to tax
-
0
(15,624)
Taxation charge
607,452
691,097

Further information on tax charges

The total amount of UK corporation tax charges in the period amounted to CAD 509,042 (30 June 2023 - CAD 166,968).

 

The total overseas tax charges in the period amounted to CAD 110,034 (30 June 2023 - CAD 470,438).

9
Dividends
31/12/2023
30/06/2023
Recognised as distributions to equity holders:
CAD
CAD
Interim paid
1,458,649
-
H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
- 27 -
10
Intangible fixed assets
Group
Goodwill
Software
Patents & licences
Total
CAD
CAD
CAD
CAD
Cost
At 1 July 2023
38,087,134
270,887
22,437
38,380,458
Disposals
-
0
(3,844)
(3,785)
(7,629)
Exchange adjustments
-
0
583
(1,523)
(940)
At 31 December 2023
38,087,134
267,626
17,129
38,371,889
Amortisation and impairment
At 1 July 2023
8,188,145
179,285
3,773
8,371,203
Amortisation charged for the period
1,269,571
26,678
-
0
1,296,249
Disposals
-
0
(3,639)
(1,924)
(5,563)
Exchange adjustments
-
0
533
45
578
At 31 December 2023
9,457,716
202,857
1,894
9,662,467
Carrying amount
At 31 December 2023
28,629,418
64,769
15,235
28,709,422
At 30 June 2023
29,898,989
91,602
18,664
30,009,255
The company had no intangible fixed assets at 31 December 2023 or 30 June 2023.
H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
- 28 -
11
Tangible fixed assets
Group
Freehold buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Total
CAD
CAD
CAD
CAD
CAD
CAD
Cost
At 1 July 2023
100,348
7,780
45,160
2,088,820
116,713
2,358,821
Additions
-
0
-
0
4,685
54,106
-
0
58,791
Disposals
-
0
-
0
-
0
(166,945)
-
0
(166,945)
Exchange adjustments
653
21
903
(1,871)
(15,909)
(16,203)
At 31 December 2023
101,001
7,801
50,748
1,974,110
100,804
2,234,464
Depreciation and impairment
At 1 July 2023
12,314
908
27,718
586,927
79,308
707,175
Depreciation charged in the period
-
0
391
12,020
77,737
5,559
95,707
Eliminated in respect of disposals
-
0
-
0
-
0
(126,043)
-
0
(126,043)
Exchange adjustments
-
0
1
5,224
(12,735)
(2,627)
(10,137)
At 31 December 2023
12,314
1,300
44,962
525,886
82,240
666,702
Carrying amount
At 31 December 2023
88,687
6,501
5,786
1,448,224
18,564
1,567,762
At 30 June 2023
88,034
6,872
17,442
1,501,893
37,405
1,651,646
The company had no tangible fixed assets at 31 December 2023 or 30 June 2023.
12
Fixed asset investments
Group
Company
31/12/2023
30/06/2023
31/12/2023
30/06/2023
Notes
CAD
CAD
CAD
CAD
Investments in subsidiaries
13
-
0
-
0
46,501,892
46,501,892
H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
12
Fixed asset investments
(Continued)
- 29 -
Movements in fixed asset investments
Company
Shares in subsidiaries
CAD
Cost or valuation
At 1 July 2023 and 31 December 2023
46,501,892
Carrying amount
At 31 December 2023
46,501,892
At 30 June 2023
46,501,892
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
Genesys International Limited
3a Aston Way, Middlewich, Cheshire, United Kingdom, CW10 0HS
Provision of industrial water treatment chemicals
Ordinary A, Ordinary B and Ordinary C shares
100.00
-
H2O Innovation Europe S.L.
Calle Londres, 38, Las Rozas (Madrid), Spain
Marketing, import and export of chemical products for water treatment
Ordinary shares
100.00
-
Genesys M. P. Latinoamerica Ltda.
Av, Nueva Providencia 1363 Of, 1304 Providencia, Santiago de Chile, Chile
Wholesale of chemical products
Ordinary shares
0
100.00
14
Stocks
Group
Company
31/12/2023
30/06/2023
31/12/2023
30/06/2023
CAD
CAD
CAD
CAD
Raw materials and consumables
3,217,420
3,666,170
-
-
H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
- 30 -
15
Debtors
Group
Company
31/12/2023
30/06/2023
31/12/2023
30/06/2023
Amounts falling due within one year:
CAD
CAD
CAD
CAD
Trade debtors
5,657,098
7,856,095
-
0
-
0
Corporation tax recoverable
-
0
460,747
-
0
-
0
Amounts owed by group undertakings
1,526,385
241,768
196,750
16,048
Other debtors
1,130,344
602,645
-
0
-
0
Prepayments and accrued income
346,070
182,158
-
0
-
0
8,659,897
9,343,413
196,750
16,048
16
Creditors: amounts falling due within one year
Group
Company
31/12/2023
30/06/2023
31/12/2023
30/06/2023
CAD
CAD
CAD
CAD
Trade creditors
1,858,251
2,509,242
-
0
-
0
Amounts owed to group undertakings
67,799
582,463
4,011,340
4,045,340
Corporation tax payable
416,317
192,889
19,290
-
0
Other creditors
559,481
6,997,156
-
0
5,474,733
Accruals and deferred income
269,724
157,984
-
0
-
0
3,171,572
10,439,734
4,030,630
9,520,073
17
Creditors: amounts falling due after more than one year
Group
Company
31/12/2023
30/06/2023
31/12/2023
30/06/2023
CAD
CAD
CAD
CAD
Amounts owed to group undertakings
28,628,003
24,239,795
28,628,003
24,239,795

Amounts owed to group undertakings consist of intra-group loans, these are secured via a debenture registered with National Bank of Canada, these loans carry an interest rate of 5.24% per annum and are due to mature between 2027 and 2030.

Amounts included above which fall due after five years are as follows:
Payable other than by instalments
9,853,445
24,239,795
9,853,445
24,239,795
H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
- 31 -
18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
31/12/2023
30/06/2023
Group
CAD
CAD
Accelerated capital allowances
370,742
381,419
The company has no deferred tax assets or liabilities.
Group
Company
31/12/2023
31/12/2023
Movements in the period:
CAD
CAD
Liability at 1 July 2023
381,419
-
Credit to profit or loss
(10,677)
-
Liability at 31 December 2023
370,742
-
19
Retirement benefit schemes
31/12/2023
30/06/2023
Defined contribution schemes
CAD
CAD
Charge to profit or loss in respect of defined contribution schemes
73,572
105,770

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. Amounts owing at the period end totalled CAD 2,535 (30 June 2023 - CAD nil).

20
Share capital
Group and company
31/12/2023
30/06/2023
31/12/2023
30/06/2023
Ordinary share capital
Number
Number
CAD
CAD
Issued and fully paid
Ordinary shares of CAD1.525 each
1,100
1,100
1,678
1,678

Ordinary shares carry full voting, dividend and capital distribution rights.

H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
- 32 -
21
Reserves
Share premium

Share premium is made up of receipts in excess of the par value of new share capital issued. This is a non-distributable reserve.

Profit and loss reserves

Profit and loss reserves represents the accumulated profits less accumulated losses and distributions up to the reporting date. This is a distributable reserve.

22
Financial commitments, guarantees and contingent liabilities

At the balance sheet date the group acted as a guarantor for its parent company, H2O Innovation Inc, in respect of group loan arrangements which amounted to CAD 58,183,810 at 31 December 2023 (30 June 2023 - CAD 51,274,093). The directors do not feel that there is a likelihood that the guarantee will be called upon.

23
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
31/12/2023
30/06/2023
31/12/2023
30/06/2023
CAD
CAD
CAD
CAD
Within one year
428,945
438,474
-
-
Between two and five years
1,314,877
1,322,007
-
-
In over five years
801,135
958,854
-
-
2,544,957
2,719,335
-
-
24
Events after the reporting date

Since the balance sheet date, but before the approval of the financial statements, there has been an issue of equity shares by a subsidiary, H2O Innovation Europe, S.L., which created a non-controlling interest within the H2O Innovation UK Holding Limited group from 1st January 2024.

 

A permanent establishment located in Bilbao, Spain and owned by H2O Innovation Inc. the ultimate parent company, was transferred to H2O Innovation Europe, S.L. in exchange for an issue of shares with nominal value of CAD 3,936 and a share premium of CAD 612,690.

 

As a result of this transaction, from 1 January 2024, H2O Innovation Europe, S.L. is now directly owned by H2O Innovation UK Holding Limited (85.04%) and indirectly owned by H2O Innovation Inc. (14.96%).

25
Related party transactions

At the balance sheet date the company was a wholly owned subsidiary of H2O Innovation Inc. The companies that are part of the H2O Innovation Inc. group were all wholly owned at the year-end and as a result the company has taken advantage of the exemption conferred by FRS102 not to disclose transactions with H2O Innovation Inc. or any other wholly owned group companies within this group.

H2O Innovation UK Holding Limited
Notes to the group financial statements (continued)
For the period ended 31 December 2023
- 33 -
26
Controlling party

At the balance sheet date, the ultimate parent company is Ember SPV, LP. Incorporated Delaware, USA. Registered office, 251 Little Falls Drive, Wilmington, DE 19808.

 

At the balance sheet date the largest group in which the results of the company are consolidated is that headed by Ember SPV, LP. Incorporated Delaware, USA. Registered office, 251 Little Falls Drive, Wilmington, DE 19808. The consolidated accounts of this company are available to the public and may be obtained from the above address.

27
Cash generated from group operations
31/12/2023
30/06/2023
CAD
CAD
Profit for the period after tax
413,932
5,022
Adjustments for:
Taxation charged
607,452
691,097
Finance costs
784,699
1,900,223
Investment income
(45,021)
(1,741)
Loss/(gain) on disposal of tangible fixed assets
42,968
(106,458)
Amortisation and impairment of intangible assets
1,296,249
2,596,465
Depreciation and impairment of tangible fixed assets
95,707
189,555
Other gains and losses
(335,365)
(247,833)
Movements in working capital:
Decrease/(increase) in stocks
448,750
(388,014)
Decrease/(increase) in debtors
222,769
(3,409,437)
(Decrease)/increase in creditors
(1,970,423)
2,934,394
Cash generated from operations
1,561,717
4,163,273
28
Analysis of changes in net debt - group
1 July 2023
Cash flows
Other non-cash changes
Exchange rate movements
31 December 2023
CAD
CAD
CAD
CAD
CAD
Cash at bank and in hand
4,835,022
(1,762,314)
-
33,027
3,105,735
Amounts owed to group undertakings due after more than one year
(24,239,795)
1,846,166
(6,234,374)
-
(28,628,003)
(19,404,773)
83,852
(6,234,374)
33,027
(25,522,268)

Other non-cash changes relate to a new intercompany loan received of CAD 5,525,000 in exchange for the payment of deferred consideration by the ultimate parent company on behalf of the group, along with accrued interest charges on the group loan balances totalling CAD 709,374.

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