Page 48 - Hardide-Annual-Report-2021
P. 48

  48 Notes to the Group Financial Statements
Accounting convention
The Group is required to prepare its financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted in the EU, International Accounting Standards (IAS) and Interpretations.
Standards, amendments and interpretations that are not yet effective for Hardide Plc and have not been early adopted:
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:
Effective date* 1st January 2022
• IFRS 3 – Business Combinations – references to conceptual framework
• Amendments to IAS 16 – Proceeds before intended use
• Classification of liabilities as current or non-current (amendments to IAS 1)
• 2018-2020 annual improvements cycle
* the standard is effective for accounting periods beginning on or after this date.
The directors are currently reviewing the effect on the financial statements of the Group in future periods.
The following principal accounting policies have been applied:
Basis of preparation
The financial statements have been prepared on
the going concern basis, under the historical cost convention. These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates. All amounts are rounded to the nearest thousand pounds.
Principal activity
The principal activity of the Group and parent company is a leading producer of patented Chemical Vapour Deposition (CVD) coatings for the oil and gas industry, flow control equipment, advanced engineering and aerospace.
Going concern
The directors have adopted the going concern basis in preparing these accounts after assessing the principal risks and having considered the impact of reduced sales scenarios for COVID-19. The major variables are the depth, duration and timing of recovery from the COVID-19 pandemic. The directors considered the impact of COVID-19 on our key markets and in particular the effect of reduced demand from key customers in those markets is likely to have on the business for a period of at least 12 months from the date of signing
the Annual Report. Whilst the situation evolves daily, making scenario planning difficult, we have considered various impacts on sales, profitability and cash
flows and believe that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of Hardide plc and entities controlled by Hardide plc (its subsidiaries) made up to 30 September each year.
Control is achieved where Hardide plc has the power to govern the financial and operating policies of
an investee entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
Transactions between and balances with Group companies are eliminated together with unrealised gains on inter-company transactions. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.
Acquisitions are accounted for by the purchase method. The cost of an acquisition is measured as the fair value at the date of exchange of the consideration provided plus any costs directly attributable to the acquisition. On acquisition, the assets and liabilities and contingent liabilities of the acquired business that meet the conditions for recognition under IFRS 3 are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired is credited to profit or loss in the period of acquisition.

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