REGISTERED NUMBER: 01540571 (England and Wales)

DRINKWATER'S MUSHROOMS LIMITED

STRATEGIC REPORT, DIRECTORS' REPORT AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2025

Page

Company Information

1

Strategic Report

2

Directors' Report

3

Independent Auditors' Report

5

Statement of Income and Retained Earnings

8

Balance Sheet

9

Cash Flow Statement

10

Notes to the Cash Flow Statement

11

Notes to the Financial Statements

12

Directors:

Mr K S Drinkwater

Mr P E Drinkwater

Mrs J A Drinkwater

Registered office:

Dalton House

9 Dalton Square

LANCASTER

LA1 1WD

Business address:

Hampson Farm

Hampson Lane

Galgate

LANCASTER

LA2 0JB

Registered number:

01540571 (England and Wales)

Auditors:

Xeinadin Audit Limited

Accountants and Statutory Auditors

Dalton House

9 Dalton Square

LANCASTER

LA1 1WD

Bankers:

HSBC Bank Plc

49a Fishergate

PRESTON

Lancashire

PR1 8BH

The directors present their strategic report for the year ended 31 May 2025.

Review of business

The company is principally engaged in the production and sale of mushrooms. The company is also continually developing its property assets to generate greater returns.

We aim to present a balance and comprehensive review of the development and performance of the business during the year and it's position at the year end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.

As a mushroom producer, the company continues to supply its produce to national supermarket outlets.

We consider that our key performance indicators are those that communicate the financial performance and strength of the company as a whole, these being gross profit and profit after tax.

We are satisfied that the business has performed satisfactorily and in line with expectations.

Turnover has remained static at £13,822,722 compared to £13,890,740 last year.

Gross profit has reduced to £2,223,630 from £2,674,045 as a result of increased staff and direct costs. Gross profit margins have also reduced to 16.08% from 19.2% in the previous year. Non trading income has increased to £390,503 from £361,564 resulting in an overall net profit after tax for the year of £409,718 compared to £706,877 in the previous year.

Principal risks and uncertainties

As for similar businesses we are continuing to operate in challenging times. The increasing power of the supermarkets, who are our major customers, mean our selling prices are continually reviewed and kept to a minimum. This is a constant concern for us together with increasing staff costs but our continued investment in new technology and equipment is enabling us to keep margins fairly steady despite these concerns.

With these risks and uncertainties in mind, we are aware that any plans for the future development of our business may be subject to unforeseen future events outside of our control.

On behalf of the board:

Mr K S Drinkwater - Director

24 October 2025

The directors present their report with the financial statements of the company for the year ended 31 May 2025.

Dividends

The total distribution of dividends for the year ended 31 May 2025 will be £ 150,000 .

Events since the end of the year

Information relating to events since the end of the year is given in the notes to the financial statements.

Directors

The directors shown below have held office during the whole of the period from 1 June 2024 to the date of this report.

Mr K S Drinkwater

Mr P E Drinkwater

Mrs J A Drinkwater

Statement of directors' responsibilities

The directors are responsible for preparing the Strategic Report, the Directors' 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 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;

-	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.

Auditors

The auditors, Xeinadin Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:

Mr K S Drinkwater - Director

24 October 2025

Opinion

We have audited the financial statements of Drinkwater's Mushrooms Limited (the 'company') for the year ended 31 May 2025 which comprise the Statement of Income and Retained Earnings, Balance Sheet, Cash Flow Statement and Notes to the Cash Flow Statement, 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 2025 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

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 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Auditors' Report 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 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.

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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Directors' Report 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 Directors' Report.

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

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

· enquiries are made of management and those charged with governance as to whether there is any knowledge of actual, suspected, or alleged fraud, whether there is any known non-compliance with laws or regulations, and whether the company has been subject to any litigation or any legal claims.

· audit work over the risk of management override of controls is undertaken. This includes testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.

· analytical reviews are performed on the financial statements at all stages of the audit by comparison to prior years, budgets and expectations to ensure the reasonableness of the figures therein.

· third party confirmation is obtained from the company's bankers to confirm bank balances, loan facilities and security held.

· detailed audit testing is undertaken in specific areas to ensure that income and expenditure is correctly recorded and is a genuine income or expense of the company.

· financial statement disclosures are reviewed and tested to supporting documentation to assess compliance with applicable laws and regulations.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.

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 Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Tim Preece F.C.C.A. (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited

Accountants and Statutory Auditors

Dalton House

9 Dalton Square

LANCASTER

LA1 1WD

5 November 2025

Turnover

13,822,722

13,890,740

Cost of sales

(11,599,092

)

(11,216,695

)

Gross profit

2,223,630

2,674,045

Administrative expenses

(2,116,781

)

(2,100,714

)

106,849

573,331

Other operating income

390,503

361,564

Operating profit

4

497,352

934,895

Interest receivable and similar income

84,352

57,848

581,704

992,743

Interest payable and similar expenses

5

(15,797

)

(28,799

)

Profit before taxation

565,907

963,944

Tax on profit

6

(156,189

)

(257,067

)

Profit for the financial year

409,718

706,877

Retained earnings at beginning of year

4,555,443

3,948,566

Dividends

7

(150,000

)

(100,000

)

Retained earnings at end of year

4,815,161

4,555,443

Fixed assets

Tangible assets

8

2,243,875

2,398,729

Current assets

Stocks

9

525,090

492,247

Debtors

10

1,200,551

1,176,537

Cash at bank and in hand

3,152,122

2,897,045

4,877,763

4,565,829

Creditors

Amounts falling due within one year

11

(1,940,644

)

(2,028,184

)

Net current assets

2,937,119

2,537,645

Total assets less current liabilities

5,180,994

4,936,374

Provisions for liabilities

14

(358,833

)

(373,931

)

Net assets

4,822,161

4,562,443

Capital and reserves

Called up share capital

15

7,000

7,000

Retained earnings

16

4,815,161

4,555,443

Shareholders' funds

4,822,161

4,562,443

The financial statements were approved by the Board of Directors and authorised for issue on 24 October 2025 and were signed on its behalf by:

Mr K S Drinkwater - Director

Cash flows from operating activities

Cash generated from operations

1

923,809

1,380,967

Interest paid

(15,797

)

(28,799

)

Tax paid

(250,094

)

(46,981

)

Net cash from operating activities

657,918

1,305,187

Cash flows from investing activities

Purchase of tangible fixed assets

(370,930

)

(279,996

)

Sale of tangible fixed assets

140,999

99,000

Interest received

84,352

57,848

Net cash from investing activities

(145,579

)

(123,148

)

Cash flows from financing activities

New loans in year

961

-

Loan repayments in year

-

(21,852

)

Amount introduced by directors

268,377

199,774

Amount withdrawn by directors

(376,600

)

(289,091

)

Equity dividends paid

(150,000

)

(100,000

)

Net cash from financing activities

(257,262

)

(211,169

)

Increase in cash and cash equivalents

255,077

970,870

Cash and cash equivalents at beginning of year

2

2,897,045

1,926,175

Cash and cash equivalents at end of year

2

3,152,122

2,897,045

1.	Reconciliation of profit before taxation to cash generated from operations

2025

2024

£

£

Profit before taxation

565,907

963,944

Depreciation charges

368,661

391,358

Loss/(profit) on disposal of fixed assets

16,124

(65,181

)

Finance costs

15,797

28,799

Finance income

(84,352

)

(57,848

)

882,137

1,261,072

(Increase)/decrease in stocks

(32,843

)

80,833

Increase in trade and other debtors

(24,014

)

(194,018

)

Increase in trade and other creditors

98,529

233,080

Cash generated from operations

923,809

1,380,967

2.	Cash and cash equivalents

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 May 2025

31/5/25

1/6/24

£

£

Cash and cash equivalents

3,152,122

2,897,045

Year ended 31 May 2024

31/5/24

1/6/23

£

£

Cash and cash equivalents

2,897,045

1,926,175

3.	Analysis of changes in net funds

At 1/6/24

Cash flow

At 31/5/25

£

£

£

Net cash

Cash at bank and in hand

2,897,045

255,077

3,152,122

2,897,045

255,077

3,152,122

Debt

Debts falling due within 1 year

(9,059

)

(961

)

(10,020

)

(9,059

)

(961

)

(10,020

)

Total

2,887,986

254,116

3,142,102

1.	Statutory information

Drinkwater's Mushrooms Limited 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.

The presentation currency of the financial statements is the Pound Sterling (£).

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.

Turnover

Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable, for goods provided in the normal course of business, net of discounts, rebates, value added tax and other sales taxes.

Turnover is recognised at a point in time when a performance obligation is satisfied by transferring goods to the customer.

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% Straight line

Short leasehold

-

10% Reducing balance (excluding land)

Plant and machinery

-

15% Reducing balance

Fixtures and fittings

-

15% Reducing balance

Motor vehicles

-

25% Reducing balance

Computer equipment

-

25% on cost

Tangible fixed assets are stated at cost or valuation less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell, after making due allowance for obsolete and slow moving items

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 balance sheet date.

Deferred tax

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

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.	Employees and directors

2025

2024

£

£

Wages and salaries

5,920,494

5,612,727

Social security costs

598,628

505,024

Other pension costs

101,139

157,207

6,620,261

6,274,958

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

2025

2024

Production

186

201

Administration and support

5

4

191

205

2025

2024

£

£

Directors' remuneration

496,324

394,763

Directors' pension contributions to money purchase schemes

60,016

114,978

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

Money purchase schemes

3

3

Information regarding the highest paid director is as follows:

2025

2024

£

£

Emoluments etc

361,324

259,763

Pension contributions to money purchase schemes

4,814

54,814

4.	Operating profit

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

2025

2024

£

£

Hire of plant and machinery

55,565

62,266

Other operating leases

191,640

190,765

Depreciation - owned assets

368,661

391,358

Loss/(profit) on disposal of fixed assets

16,124

(65,181

)

Auditors' remuneration

7,946

7,198

Foreign exchange differences

(10,773

)

8,356

5.

Interest payable and similar expenses

2025

2024

£

£

Other interest payable

15,797

28,799

6.

Taxation

Analysis of the tax charge

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

2025

2024

£

£

Current tax:

UK corporation tax

171,287

250,094

Deferred tax

(15,098

)

6,973

Tax on profit

156,189

257,067

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2025

2024

£

£

Profit before tax

565,907

963,944

Profit multiplied by the standard rate of corporation tax in the UK of 25% (2024 - 25%)

141,477

240,986

Effects of:

Expenses not deductible for tax purposes

14,712

16,081

different tax rates

Total tax charge

156,189

257,067

7.

Dividends

2025

2024

£

£

Ordinary £1 A shares of £1 each

Interim

150,000

100,000

8.	Tangible fixed assets

Freehold

Short

Plant and

property

leasehold

machinery

£

£

£

Cost

At 1 June 2024

513,395

2,394,651

4,720,718

Additions

-

-

215,425

Disposals

-

(14,006

)

(159,453

)

At 31 May 2025

513,395

2,380,645

4,776,690

Depreciation

At 1 June 2024

182,692

1,893,528

3,596,272

Charge for year

10,128

49,668

191,381

Eliminated on disposal

-

(9,546

)

(87,523

)

At 31 May 2025

192,820

1,933,650

3,700,130

Net book value

At 31 May 2025

320,575

446,995

1,076,560

At 31 May 2024

330,703

501,123

1,124,446

Fixtures

and

Motor

Computer

fittings

vehicles

equipment

Totals

£

£

£

£

Cost

At 1 June 2024

449,130

672,157

76,746

8,826,797

Additions

703

153,580

1,222

370,930

Disposals

(140,550

)

(186,188

)

(9,953

)

(510,150

)

At 31 May 2025

309,283

639,549

68,015

8,687,577

Depreciation

At 1 June 2024

305,600

385,393

64,583

6,428,068

Charge for year

16,377

96,716

4,391

368,661

Eliminated on disposal

(113,403

)

(132,702

)

(9,853

)

(353,027

)

At 31 May 2025

208,574

349,407

59,121

6,443,702

Net book value

At 31 May 2025

100,709

290,142

8,894

2,243,875

At 31 May 2024

143,530

286,764

12,163

2,398,729

9.

Stocks

2025

2024

£

£

Stocks

525,090

492,247

10.

Debtors: amounts falling due within one year

2025

2024

£

£

Trade debtors

1,020,257

762,686

VAT

40,923

45,816

Accrued income

3,044

238,386

Prepayments

136,327

129,649

1,200,551

1,176,537

11.

Creditors: amounts falling due within one year

2025

2024

£

£

Other loans (see note 12)

10,020

9,059

Trade creditors

781,185

894,794

Tax

171,287

250,094

Social security and other taxes

236,318

187,490

Other creditors

97,368

79,893

Directors' current accounts

1,940

110,163

Accruals

642,526

496,691

1,940,644

2,028,184