The directors present the strategic report for the year ended 31 December 2024.

The group supplies to multiple retailers in the UK fresh soft fruit which has been sourced from its own farms and from third party growers both in the UK and overseas. It also provides contract packing and haulage services.

The results for the group show a profit before tax for the year ended 31 December 2024 of £7,458,283 (2023: £2,802,903) with sales of £108,353,501 (2023: £93,920,117). The gross profit margin has increased from £12,091,011 (12.9%) to £17,654,549 (16.3%), this is the groups key measure of performance. The increase in gross margin for the year is partly due to increased production in 2024 and partly due to changes in sales mix. The result is supported by the receipt of R&D tax credits relating to expenditure incurred in previous years totalling £964,787 (2023: £1,239,964), reflecting the historic and continued investments made in research and development.

The results and net assets for 2024 and those for 2023 reflect a provision for the fair value of financial liabilities as required by FRS 102.

At the year-end the group had net assets of £38,831,211 (2023: £33,425,477). During 2024 the group has continued to invest in its UK and overseas farms whilst reducing its levels of net debt. The group’s net borrowings have improved from a net debt position of £6,748,094 to a net fund position of £1,503,130 at the year-end.

Given the straightforward nature of the business, the group’s directors are of the opinion that analysis using any further KPIs is not necessary for and understanding of the development, performance or position of the business.

Commercial risks

The management of the business and execution of the group’s strategy are subject to a number of risks.

As with any business engaged in growing fresh produce, growing conditions have a significant influence over the yield and quality of the crop. This is particularly the case with growing soft fruit, and the use of polytunnels to protect the crop from the element is a critical component in protecting the business from increasingly extreme swings in weather conditions.

The availability of seasonal labour to pick the crop and undertake other key tasks is of critical importance and any shortfall in availability is a risk to the business. The group has developed its skills and expertise in the recruitment of seasonal labour to minimise this risk and also uses growing methods which have reduced the number of seasonal workers required in its business.

The group sells its produce to a small number of large, multiple-retail customers. Reliance on a small customer base is potentially a risk and the group attempts to mitigate this risk by maintaining strong relationships and high service levels with its customers whilst seeking to expand its customer base.

Financial risks

All group companies are dependent on the availability of bank funding to continue to trade.

The group uses various financial instruments including loans and various items such as trade debtors that arise directly from its operations. The main purpose of these instruments is to finance the group’s ongoing operations. Their existence exposes the group to a number of financial risks, primarily interest rate, currency and liquidity risk.

The group’s exposure to interest rate risk is limited to that associated with the bank loans within the group. To the extent that the directors are of the opinion that the level of risk on specific bank loans is higher than acceptable, interest rate hedges are taken out.

The group’s exposure to credit risk is primarily attributable to its trade receivables and is managed through credit insurance. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

As a significant proportion of the group’s purchases are transacted in Euros and US Dollars, it is therefore exposed to transactional currency risk. To the extent that the directors are of the opinion that the level of risk on specific foreign currency transactions is higher than acceptable, foreign currency hedging instruments are taken out.

The group continues to be dependent on the availability of liquid resources. The directors are of the opinion that the financial instruments available within the group are structured in such a way that the level of liquidity risk is acceptable.

The group’s strategy is geared towards ensuring availability to consumers of UK-produced soft fruit at affordable prices. In addition, the group will maintain its ‘year-round’ service to its key UK customers by sourcing good-quality imported produce when UK produce is not available.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The results for the year are set out on page 9. A review of business is set out in the strategic report on page 1.

Ordinary dividends were paid amounting to £300,290. The directors do not recommend payment of a further dividend.

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

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The group's policy is to consult and discuss with employees, through business updates, staff councils and at meetings, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

UHY Hacker Young have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditor in the absence of an Annual General Meeting.

The directors of the group act in good faith to promote the success of the group, in a fair manner with high standards of business conduct. The group’s business strategy, developed, implemented, and reviewed by the directors, forms the basis of its approach to ensuring the long-term success of the business and that it meets its obligations to its stakeholders.

The group recognises the significant contribution that its employees make towards its success. The health, safety and wellbeing of our employees is of the highest importance. The group engages with employees through various forums on a regular basis, with this in mind, and is a member of the Investors in People scheme.

Maintaining good relationships with our customers through delivering consistent quality, service and value is fundamental to our business and its sustainability and is at the core of the business strategy.

The group’s supplier relationships are important in ensuring the quality of its production and the group has developed long term relationships and agreements with its key suppliers over the last few years.

The directors are aware of the impact the group operations may have on the community and environment and incorporate various activities into the operation of the business with this in mind. The business has links to the local community through its charitable work. The group has invested significantly and will continue to invest in rainwater harvesting and recycling infrastructure, with the additional benefit of mitigating local flooding risks. The group is also committed to reducing the environmental impact of plastic waste and is continuing in its work to develop environmentally sound alternatives for its product packaging.

The Streamlined Energy and Carbon Regulations came into force on 1 April 2019 in order to provide a simplified energy and carbon reporting framework. All large UK companies are required to report annually on their energy consumption, associated greenhouse gas emissions, energy efficiency measures and an intensity metric.

The Group has no individual UK subsidiaries which are large UK companies, S & A Group Holdings Limited is deemed large based solely upon it’s consolidated numbers, but is exempt from reporting as it’s consumption is less than 40,000kWh.

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:

• select suitable accounting policies and then apply them consistently;

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

• state whether applicable UK 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 group and company will continue in business.

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.

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.

The directors consider that the group is well positioned with a number of important strengths which make it resilient. The group maintains strong trading relationships with its customers and has continued to invest in efficient growing and packing facilities whilst reducing its net debt levels. As a consequence, the group is capable of withstanding ongoing margin pressures.

The group made an operating profit of £8,244,555 (2023: £3,856,134). During 2024 the Group has continued to invest in its UK and overseas farms to increase its participation in the fast-growing global market for soft fruits, whilst reducing its net debt. The group’s net assets have increased to £38,831,211 at the year-end (2023: £33,425,477).

The group’s core financing is provided by medium to long-term bank loans supplemented by short-term loan and overdraft facilities. The group’s forecasts and projections show that the group should be able to operate within the bank facilities which it currently has available.

After making enquiries, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. The directors have reviewed 2024 performance to date compared to budgets and are satisfied that no going concern issues have arisen. Accordingly, they continue to adopt the going concern basis in preparing the directors’ report and accounts.

We have audited the financial statements of S & A Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 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:

• give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2024 and of the group's 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 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 financial statement. 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 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 our 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.

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:

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

• the parent company 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.

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.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

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:

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the relevant sector;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

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

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

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

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

• investigated the rationale behind significant or unusual transactions.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from the financial statements, 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.

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.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £369,482 (2023 - £5,545,883 profit).

S & A Group Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Brook Farm, Marden, Hereford, Herefordshire, HR1 3ET.

The group consists of S & A Group Holdings Limited and all of its subsidiaries.

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 sterling, which is the functional currency of the company. Monetary amounts 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 certain financial instruments at fair value. 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:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

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.

The consolidated group financial statements consist of the financial statements of the parent company S & A Group Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 December 2024. 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.

The directors consider that the group is well positioned with a number of important strengths which make it resilient. The group maintains strong trading relationships with its customers and has continued to invest in efficient growing and packing facilities whilst reducing its net debt levels. As a consequence, the group is capable of withstanding ongoing margin pressures.

The group made an operating profit of £8,244,555 (2023: £3,856,134). During 2024 the Group has continued to invest in its UK and overseas farms to increase its participation in the fast-growing global market for soft fruits, whilst reducing its net debt. The group’s net assets have increased to £38,831,211 at the year-end (2023: £33,425,477).

The group’s core financing is provided by medium to long-term bank loans supplemented by short-term loan and overdraft facilities. The group’s forecasts and projections show that the group should be able to operate within the bank facilities which it currently has available.

After making enquiries, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. The directors have reviewed 2024 performance to date compared to budgets and are satisfied that no going concern issues have arisen. Accordingly, they continue to adopt the going concern basis in preparing the directors’ report and accounts.

Turnover is recognised at the fair value of the consideration received or receivable for goods 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 when goods are delivered), 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.

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

Amortisation 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:

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:

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.

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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.

Total costs for growing crops are calculated as the amount payable to suppliers for plants, fertilisers and sprays together with an element of materials and overheads. these costs are consumed by the company over the estimated cropping lift of the plants acquired.

The group 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 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, 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.

Financial assets, 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.

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.

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, including creditors and bank loans, 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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

The group uses derivative financial instruments to reduce exposure to foreign exchange risk and interest rate movements. The group does not hold or issue derivative financial instruments for speculative purposes.

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

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.

R&D tax credits

R&D tax credits are recognised when there is a high probability that they will be received, on the basis of prudence as claims are complex and subject to HMRC approval which can take considerable time to be agreed.

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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

The group operates a long-term incentive plan for its directors. At each balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is re-measured, with any changes in fair value recognised in profit or loss for the year.

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

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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 in the period are included in profit or loss.

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.

At the balance sheet date, the directors do not consider that there were any critical judgements which had a significant effect on the amounts recognised in the financial statements.

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.

The carrying value of fixed assets at the year end was £30,013,271 (2023: £31,396,592).

The group's depreciation policy is set out in 1.6 above; the choice of useful economic lives clearly involves significant judgement.

The directors periodically review the useful economic life of all assets and where necessary asset lives are revised with any changes in value being reflected in the income statement immediately where there is an impairment or in future periods by a change in depreciation.

The cost of growing crops including plants, fertiliser, labour absorption, coir and poly-tunnel plastic are spread on a systematic basis over the specific harvest cycle; this is based on the board's estimation based on experience gained over many harvests.

An analysis of the group's turnover is as follows:

R&D tax credits have been recognised in the year which relate to claims for expenditure incurred in 2023 (2023: 2022).

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023: 2).

The directors are considered to be the key management personnel of the group.

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

In addition to the tax arising as noted above, the group received R&D tax credit income in the current and prior year, refer to note 4.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Details of the company's subsidiaries at 31 December 2024 are as follows:

Registered office addresses (all UK unless otherwise indicated):

The group entered into a combination of an interest rate swap and an interest rate collar on the inception of its long-term loan in 2007. Both of these hedging instruments settle on a quarterly basis exchanging floating rate interest amounts for fixed rate interest amounts and are designated as cash flow hedges to reduce the group's cash flow exposure resulting from variable interest rates on these borrowings. The following table details the notional principal amounts and remaining terms of these contracts as at the reporting date:

For details of security over the bank loans and overdrafts, see note 23.

The bank loans and overdrafts are secured by a fixed and floating charge over the assets of the group through an omnibus guarantee.

Amounts repayable in more than five years relate to long-term bank loans for which the interest rates vary between 1.5% and 1.97% over bank base rate.

Other loans totalling £2,597,160 (2023: £4,338,364) relate to invoice discounting facilities which are secured against trade debtors. This is included within creditors due within one year.

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The company's obligations under finance lease and hire purchase contracts are secured by the lessor's rights over the assets disclosed in note 15.

The group operates long-term incentive schemes for certain key directors.

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

The deferred tax liability set out above is expected to reverse in future years and relates predominantly to fixed asset timing differences.

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.

At 31 December 2024 there was £63,260 (2023: £52,954) due, in respect of the current reporting period, to be paid over to the scheme.

The company has 5 classes of ordinary shares which carry no right to fixed income.

During the year 2,335 Ordinary E shares were issued and fully paid and 231,201 Ordinary E shares were issued but not fully paid.

On 19 December 2024 1,889,520 Ordinary shares were redesignated to other share classes as follows:

955,376 A Ordinary shares of £1 each

467,072 B Ordinary shares of £1 each

233,536 C Ordinary shares of £1 each

233,536 D Ordinary shares of £1 each

On 20 December 2024 233,536 E Ordinary shares were allotted with a nominal vale of each share of £1. £0.01 per share was paid and £0.99 per share was unpaid.

The profit and loss reserve represents cumulative profits or losses net of dividends paid and other adjustments.

The group is part of an omnibus agreement with certain other parties under common control. The net indebtedness of the group at 31 December 2024 was £2,409,242 (2023: £4,544,435). The group has provided as security against this indebtedness an unlimited all-monies guarantee by way of a fixed and floating charge over all of its assets.

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:

Amounts contracted for but not provided in the financial statements:

£1,418,209 has been reclassified in the comparative figures from cost of sales to other operating income, as the directors consider that this is a more appropriate classification of the true nature of the income.

During the year the group purchased goods from entities owned by a director at a cost of £400,562 (2023: £404,256) and made sales to entities owned by a director totalling £40,439 (2023:£33,817). Amounts outstanding and included within trade creditors at the year end were £nil (2023: £nil). Amounts outstanding and included within trade debtors at the year end were £78,253 (2023: £51,012).

During the year the group made a loan to a director totalling £300,000 (2023: £nil) this amount is included within other debtors, This amount is repayable in full on its 3rd anniversary. Interest is charged at 2% above Bank of England base rate.

Dividends totalling £300,290 (2023 - £0) were paid in the year in respect of shares held by the company's directors.

As at 31 December 2024 the company was controlled by Mr S J Davies & Mrs D Davies by virtue of their shareholding.