Company Registration No. 01661817 (England and Wales)
R.S. AQUA LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 AUGUST 2018
PAGES FOR FILING WITH REGISTRAR
Abbey House
Hickleys Court
South Street
Farnham
Surrey
GU9 7QQ
R.S. AQUA LIMITED
CONTENTS
Page
Company information
1
Director's report
2 - 3
Balance sheet
4 - 5
Notes to the financial statements
6 - 11
R.S. AQUA LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 AUGUST 2018
- 2 -
The director presents his annual report and financial statements for the year ended 31 August 2018.
Principal activities
The principal activity of the company
during the year was the sale of oceanic equipment.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr M. M. Stemp
Summary
RS Aqua is the UK’s leading and largest distributor of marine science equipment and services to the full marine and aquatic science technology marketplace, part of the Blue Economy. We primarily distribute for a group of leading international manufacturers and service providers, but we also develop our own niche systems and sensors to complement our broad product range. Most staff are qualified and experienced marine scientists, mariners and maritime technicians, which allows us to confidently specify optimal and proven technology for each project. The product offering is greatly enhanced by our own technical services offering, such as equipment maintenance, system integration, software, telemetry and more, to add value and supply chain convenience to all of our customers.
During 2018, the business focused on market penetration across the sector, to limit our exposure to any one sub-sector (e.g. offshore energy), whilst also allowing the business to find new opportunities away from our traditional customer groups. We continued to invest in R&D, expert staffing and enhanced product offerings throughout the year (new sensors, new systems and new technical services). Our export market remained significant at ~15% of revenue, and total revenue increased by ~28% for the second year running.
Financial Performance
Revenue has increased ~28% for the second year running, reflecting sustained growth in core markets, plus new business in a number of newer, parallel markets. The Balance Sheet net asset value remains stable; note the holding company net asset value has increased considerably as the loan notes for the management buyout in 2014, continue to be paid down. Operating profit levels remains on target, although the reduction has gross profit has led to a modest increase in net profit.
Credit control has been carefully managed in 2018, which has resulted in minimal bad debt throughout 2018, a strong cash position and significantly increased creditor and debtors books heading into 2019 (the result of several large pre-paid international orders, to be delivered in 2019).
Gross profit percentage contracted in 2018, caused by several factors:
-
Base costs of imported goods increasing; most products are imported and the Pound Sterling sees sustained weakness in anticipation of Brexit.
-
Increasing price-competition in several significant markets, where aggressive discounting has been necessary to secure deals.
-
Ongoing investment in staffing to enable sustained growth, this year and into the future.
We anticipate that gross profit levels will remain suppressed for some time as the Pound Sterling remains weak, whilst new markets are established, and whilst the company continues to invest in staffing.
R.S. AQUA LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2018
- 3 -
Growth Potential
RS Aqua’s Managing Director, Martin Stemp, was selected by Goldman Sachs to participate in the “10,000 Small Business Programme” during summer 2018. The “10KSB” programme is delivered over 4 months in collaboration with Saïd Business School at the University of Oxford, and other leading business schools, with the intention to provide vision, tools, a plan and a network for sustained future growth.
Looking forward to 2019 and beyond, our strategic goals to deliver our long-term growth plans are:
Build the core
-
Greater market penetration across existing customer groups.
-
Investment in core staffing skills and resources, to better service existing customers, to retain staff and to realise business growth.
-
Add several new staff in 2019, in marketing, sales and administration.
Expand for more
-
Greater marketing penetration into new and parallel markets.
-
Enhanced product offering, including new marine robotic platforms.
-
Enhanced services offering, including subscription based calibration and maintenance.
-
Increase in export opportunities
Operational Excellence
-
Invest in operational processes to enable growth, to embrace automation and to increase staff productivity.
-
Improve user experience, for a smoother and smarter customer journey.
-
A premises move in 2019 will allow for improved operations, and more room to grow.
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
Mr M. M. Stemp
Director
21 November 2018
R.S. AQUA LIMITED
BALANCE SHEET
AS AT
31 AUGUST 2018
31 August 2018
- 4 -
2018
2017
Notes
£
£
£
£
Fixed assets
Tangible assets
3
15,164
19,267
Current assets
Stocks
67,518
24,397
Debtors
4
493,931
326,219
Cash at bank and in hand
316,052
170,536
877,501
521,152
Creditors: amounts falling due within one year
5
(678,161)
(326,216)
Net current assets
199,340
194,936
Total assets less current liabilities
214,504
214,203
Provisions for liabilities
(1,548)
(1,375)
Net assets
212,956
212,828
Capital and reserves
Called up share capital
7
1,000
1,000
Capital redemption reserve
1,000
1,000
Profit and loss reserves
210,956
210,828
Total equity
212,956
212,828
R.S. AQUA LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 AUGUST 2018
31 August 2018
- 5 -
The director of the company has elected not to include a copy of the profit and loss account within the financial statements.
true
For the financial year ended 31 August 2018 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
T
he member has not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and signed by the director and authorised for issue on 21 November 2018
Mr M. M. Stemp
Director
Company Registration No. 01661817
The notes on pages 6 to 11 form part of these financial statements
R.S. AQUA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2018
- 6 -
1
Accounting policies
Company information
R.S. Aqua Limited
(01661817)
is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Abbey House, Hickleys Court, South Street, Farnham, Surrey, GU9 7QQ.
1.1
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
1.3
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Computer equipment
33% straight line
Fixtures, fittings & equipment
15% reducing balance
Motor vehicles
20% straight line
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 credited or charged to profit or loss
.
R.S. AQUA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2018
1
Accounting policies
(Continued)
- 7 -
1.4
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
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). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.5
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
1.6
Cash at bank and in hand
Cash at bank and in hand
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
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.
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 company after deducting all of its liabilities.
R.S. AQUA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2018
1
Accounting policies
(Continued)
- 8 -
Basic financial liabilities
Basic financial liabilities, including creditors, 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
paymen
ts 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. A
m
ounts 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.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
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
company’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 when the
company
has 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.
R.S. AQUA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2018
1
Accounting policies
(Continued)
- 9 -
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to income 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 lease asset are consumed.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling 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 are included in the profit and loss account for the period.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 7 (2017 - 7).
R.S. AQUA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2018
- 10 -
3
Tangible fixed assets
Computer equipment
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 September 2017
26,813
19,990
18,544
65,347
Additions
-
382
-
382
At 31 August 2018
26,813
20,372
18,544
65,729
Depreciation and impairment
At 1 September 2017
24,820
2,717
18,543
46,080
Depreciation charged in the year
1,433
3,051
1
4,485
At 31 August 2018
26,253
5,768
18,544
50,565
Carrying amount
At 31 August 2018
560
14,604
-
15,164
At 31 August 2017
1,993
17,273
1
19,267
4
Debtors
2018
2017
Amounts falling due within one year:
£
£
Trade debtors
312,489
188,854
Amounts owed by group undertakings
120,000
120,000
Other debtors
61,442
17,365
493,931
326,219
5
Creditors: amounts falling due within one year
2018
2017
£
£
Trade creditors
391,051
203,786
Corporation tax
49,353
56,170
Other taxation and social security
10,720
44,920
Other creditors
227,037
21,340
678,161
326,216
R.S. AQUA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2018
- 11 -
6
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Dividends
2018
2017
£
£
Entities with control, joint control or significant influence over the company
334,709
345,750
The following amounts were outstanding at the reporting end date:
2017
2016
Amounts owed by related parties
£
£
Entities with control, joint control or significant influence over the company
120,000
120,000
7
Called up share capital
2018
2017
£
£
Ordinary share capital
Issued and fully paid
1,000 Ordinary shares of £1 each
1,000
1,000
1,000
1,000
8
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2018
2017
£
£
31,333
54,833
9
Parent company
During the current and previous year, the company was under the control of the director by virtue of his majority shareholding in the ultimate parent company, Martin Stemp Limited, a company incorporated in England and Wales.