Radnor Hills Mineral Water Company Ltd - Limited company accounts 18.2

REGISTERED NUMBER: 03258542 (England and Wales)

Strategic Report, Report of the Directors and

Audited Financial Statements

for the Year Ended 31 May 2019

for

Radnor Hills Mineral Water Company Ltd

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Statement of Cash Flows

11

Notes to the Statement of Cash Flows

12

Notes to the Financial Statements

13

DIRECTORS:

W W Watkins

J G Rogers-Coltman

Mrs P S Butler

REGISTERED OFFICE:

Heartsease

Knighton

Powys

LD7 1LU

REGISTERED NUMBER:

03258542 (England and Wales)

AUDITORS:

Caerwyn Jones

Chartered Accountants and Statutory Auditor

Emstrey House

Shrewsbury Business Park

Shrewsbury

Shropshire

SY2 6LG

BANKERS:

Barclays Bank Plc

44-46 Castle Street

Shrewsbury

Shropshire

SY1 2BU

The directors present their strategic report for the year ended 31 May 2019.

REVIEW OF BUSINESS

The company's principal activity is the manufacture and wholesaling of mineral water and soft drink products

together with hotel management.

The directors report on another highly satisfactory year with the company reporting a 14.11% increase in

turnover on the previous financial year. This growth has again been achieved through the sale of more branded

products and helped by favourable weather conditions in the first quarter (June-August). A significant

improvement in gross margin of 3.93% has also been reported and this has happened as a result of bringing

distribution and warehousing back on to site, and increased automation of the production process.

This year, ongoing significant investment in our plant and manufacturing facilities continues in order to support

the company's growth.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors continue to assess risks which could impact on the company's longer term performance, manage

and mitigate where necessary. It is the conclusion of the directors that a continued strategy of risk assessment,

and review of product range will allow the company the flexibility to respond to new trends and legislation within

the industry as well as meeting customer demand for good quality products.The future prosperity of the business

is further safeguarded by a focused and relevant staff training programme and by recruitment, retention and

reward of a high calibre management team.

ON BEHALF OF THE BOARD:

W W Watkins - Director

16 December 2019

The directors present their report with the financial statements of the company for the year ended 31 May 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the manufacture and wholesaling of

mineral water and soft drink products together with hotel management.

DIVIDENDS

No dividends will be distributed for the year ended 31 May 2019.

FUTURE DEVELOPMENTS

The company has continued to invest extensively after the year end in both plant and site facilities. This ensures

the company is able to continue to meet demand.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 June 2018 to the date of this

report.

W W Watkins

J G Rogers-Coltman

Mrs P S Butler

FINANCIAL INSTRUMENTS

The exposure to financial risk is not material for the assessment of the assets, liabilities, financial position and

profit or loss of the company.

DISCLOSURE IN THE STRATEGIC REPORT

The director has chosen, in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and

Director's Report) Regulations 2013, to set out in the company's strategic report, information required by

schedule 7 of the Large and Medium-sized Companies and Group (Accounts and Reports) Regulations 2008.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 company and of the profit or loss of the company for that period. In preparing

these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	state whether applicable 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 company 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 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 hence for taking reasonable steps for the prevention

and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the

Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that

he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit

information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

W W Watkins - Director

16 December 2019

Opinion

We have audited the financial statements of Radnor Hills Mineral Water Company Ltd (the 'company') for the

year ended 31 May 2019 which comprise the Income Statement, Other Comprehensive Income, Statement of

Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash

Flows, Notes to the Financial Statements, 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).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 May 2019 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

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 Auditors' responsibilities for the audit

of the financial statements section of our report. We are independent of the 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to

report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the

Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of

the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material

inconsistencies or apparent material misstatements, we are required to determine whether there is a material

misstatement in the financial statements or a material misstatement of the other information. 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.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of

the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to

report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on pages three and four, 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 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 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 company or to cease operations, or

have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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.

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 Report

of the Auditors.

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 a Report of the Auditors 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.

I A Painter (Senior Statutory Auditor)

for and on behalf of Caerwyn Jones

Chartered Accountants and Statutory Auditor

Emstrey House

Shrewsbury Business Park

Shrewsbury

Shropshire

SY2 6LG

16 December 2019

REVENUE

3

47,985,472

42,051,724

Cost of sales

38,888,497

35,732,257

GROSS PROFIT

9,096,975

6,319,467

Administrative expenses

3,746,461

3,886,503

5,350,514

2,432,964

Other operating income

213,039

83,613

OPERATING PROFIT

5

5,563,553

2,516,577

Interest receivable and similar income

39,327

21,400

5,602,880

2,537,977

Interest payable and similar expenses

7

62,315

50,308

PROFIT BEFORE TAXATION

5,540,565

2,487,669

Tax on profit

8

802,423

611,422

PROFIT FOR THE FINANCIAL YEAR

4,738,142

1,876,247

FIXED ASSETS

Intangible assets

9

56,820

36,590

Property, plant and equipment

10

14,387,178

13,009,733

14,443,998

13,046,323

CURRENT ASSETS

Inventories

11

2,523,490

2,152,174

Debtors

12

9,612,039

9,105,002

Cash at bank and in hand

8,219,732

7,560,821

20,355,261

18,817,997

CREDITORS

Amounts falling due within one year

13

7,997,344

8,667,102

NET CURRENT ASSETS

12,357,917

10,150,895

TOTAL ASSETS LESS CURRENT LIABILITIES

26,801,915

23,197,218

CREDITORS

Amounts falling due after more than one year

14

(568,874

)

(1,755,785

)

PROVISIONS FOR LIABILITIES

18

(339,587

)

(286,121

)

NET ASSETS

25,893,454

21,155,312

CAPITAL AND RESERVES

Called up share capital

19

85

85

Revaluation reserve

20

125,278

-

Retained earnings

20

25,768,091

21,155,227

SHAREHOLDERS' FUNDS

25,893,454

21,155,312

The financial statements were approved by the Board of Directors on 16 December 2019 and were signed on its behalf by:

W W Watkins - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 June 2017

85

19,278,980

-

19,279,065

Changes in equity

Total comprehensive income

-

1,876,247

-

1,876,247

Balance at 31 May 2018

85

21,155,227

-

21,155,312

Changes in equity

Total comprehensive income

-

4,612,864

125,278

4,738,142

Balance at 31 May 2019

85

25,768,091

125,278

25,893,454

Cash flows from operating activities

Cash generated from operations

1

6,238,681

4,082,777

Interest paid

(60,633

)

(32,777

)

Interest element of hire purchase payments paid

(1,682

)

(17,531

)

Tax paid

(888,663

)

(671,582

)

Net cash from operating activities

5,287,703

3,360,887

Cash flows from investing activities

Purchase of intangible fixed assets

(35,700

)

(20,160

)

Purchase of tangible fixed assets

(3,488,023

)

(4,972,079

)

Sale of tangible fixed assets

51,500

27,256

Interest received

39,327

21,400

Net cash from investing activities

(3,432,896

)

(4,943,583

)

Cash flows from financing activities

New loans in year

-

3,600,000

Loan repayments in year

(1,200,000

)

(650,000

)

Government grants

12,997

19,986

Capital repayments in year

(347

)

(332,650

)

Amount introduced by directors

1,035,060

23,043

Amount withdrawn by directors

(1,043,606

)

(12,898

)

Net cash from financing activities

(1,195,896

)

2,647,481

Increase in cash and cash equivalents

658,911

1,064,785

Cash and cash equivalents at beginning of year

2

7,560,821

6,496,036

Cash and cash equivalents at end of year

2

8,219,732

7,560,821

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2019

2018

£

£

Profit before taxation

5,540,565

2,487,669

Depreciation charges

2,214,342

2,236,903

Profit on disposal of fixed assets

(14,517

)

(4,525

)

Gain on revaluation of fixed assets

(125,278

)

-

Government grants

(12,996

)

(19,988

)

Finance costs

62,315

50,308

Finance income

(39,327

)

(21,400

)

7,625,104

4,728,967

Increase in inventories

(371,316

)

(424,259

)

Increase in trade and other debtors

(233,769

)

(1,012,132

)

(Decrease)/increase in trade and other creditors

(781,338

)

790,201

Cash generated from operations

6,238,681

4,082,777

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in

respect of these Statement of Financial Position amounts:

Year ended 31 May 2019

31.5.19

1.6.18

£

£

Cash and cash equivalents

8,219,732

7,560,821

Year ended 31 May 2018

31.5.18

1.6.17

£

£

Cash and cash equivalents

7,560,821

6,496,036

1.	STATUTORY INFORMATION

Radnor Hills Mineral Water Company Ltd is a private company, limited by shares , registered in England

and Wales. The company's registered number and registered office address can be found on the Company

Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Turnover

Revenue is measured at the fair value of the consideration received or receivable, excluding discounts,

rebates, value added tax and other sales taxes.

Intangible assets

Amortisation is calculated to write off the cost of an asset, less its estimated residual value, over the useful

life of that asset as follows:

Debenture

-

written off in equal annual instalments over its estimated useful economic life

Computer software

-

written off in equal annual instalments over its estimated useful economic life

If there is an indication that there has been a significant change in amortisation rate, useful life or residual

value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

-

2% on cost

Long leasehold

-

20% on reducing balance

Plant and machinery

-

25% on cost and 25% on reducing balance

Fixtures and fittings

-

33% on cost and 20% on reducing balance

Motor vehicles

-

25% on cost

The Lion f & f

-

25% on reducing balance

Stocks

Inventories and work in progress are valued at the lower of cost and net realisable value, after making due

allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling

costs in bringing inventories to their present location and condition.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement,

except to the extent that it relates to items recognised in other comprehensive income or directly in

equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been

enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different

from those in which they are recognised in financial statements. Deferred tax is measured using tax rates

and laws that have been enacted or substantively enacted by the year end and that are expected to apply

to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable

that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

statement of financial position date. Transactions in foreign currencies are translated into sterling at the

rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving

at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of

the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's

pension scheme are charged to profit or loss in the period to which they relate.

3.

REVENUE

The revenue and profit before taxation are attributable to the one principal activity of the company.

An analysis of revenue by class of business is given below:

2019

2018

£

£

Sale of goods

47,985,472

42,051,724

47,985,472

42,051,724

An analysis of revenue by geographical market is given below:

2019

2018

£

£

United Kingdom

47,231,613

41,658,590

Europe

753,859

393,134

47,985,472

42,051,724

4.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

6,795,269

6,258,240

Social security costs

485,828

436,468

Other pension costs

132,346

99,220

7,413,443

6,793,928

The average number of employees during the year was as follows:

2019

2018

Administration

35

35

Production

129

103

Hotel administration

30

27

194

165

2019

2018

£

£

Directors' remuneration

118,456

18,750

Directors' pension contributions to money purchase schemes

10,135

819

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

2

2

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2019

2018

£

£

Hire of plant and machinery

184,997

190,357

Other operating leases

548,657

545,158

Depreciation - owned assets

2,198,873

2,225,285

Profit on disposal of fixed assets

(14,517

)

(4,525

)

Other amortisation

15,470

11,616

6.	AUDITORS' REMUNERATION

2019

2018

£

£

Fees payable to the company's auditors and their associates for the audit of the company's financial statements

19,580

15,544

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2019

2018

£

£

Bank loan interest

60,474

32,754

Interest payable

159

23

Hire purchase

1,682

17,531

62,315

50,308

8.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2019

2018

£

£

Current tax:

UK corporation tax

1,018,996

615,434

Adjustments in respect of

previous periods

(270,039

)

-

Total current tax

748,957

615,434

Deferred tax

53,466

(4,012

)

Tax on profit

802,423

611,422