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

Established in 1994, Cultech has become internationally recognised as both an innovator and premium quality manufacturer within the nutritional supplement industry. The company aims to utilise a powerful combination of research scientists together with formulation, process and production technologies to enable it to provide a fully integrated manufacturing service, working with a diverse range of customers on a global basis. The strategy of the business is to achieve attractive and sustainable rates of profitability and growth. To achieve this the company actively pursues new and continuing opportunities to sell existing and newly developed health and food supplements to the global market. As part of this strategy the company has sought to increase its customer base, reducing reliance on individual customers both within the UK and overseas.

The year ended 31 December 2024 saw an increase in revenues being achieved of 13.5% to £50.0m. The growth in sales has been achieved against a continued backdrop of global events which continue to impact both the UK and global economies. The increased focus of consumers on their health since the onset of the Covid pandemic has increased demand in the sector which the company serves and this performance follows a revenue growth in the prior year of 5.5%. The manufacturing flexibility which the company has brought into its production processes has allowed it to accommodate equally well both small and large scale production opportunities. Strategies implemented in prior years to mitigate the impact of global inflationary pressures in the supply chain have underpinned the achievement of a stable gross margin of 42.8% (2023: 42.8%). EBITDA achieved however has reduced to £2.7m (2023: £3.3m) as the company has continued to invest in its staff base. The balance sheet position remains strong, with net current assets as at 31 December 2024 of £8.1m (2023: £7.4m).

Success within the industry in the future will increasingly rely upon innovative products to allow differentiation from competitors. The company's objective therefore must be to continue to work with its customers to help ensure that the competitive edge is maintained through innovation and quality rather than compromise. This strategic report was written in mid 2025, a point in time where the UK is still suffering economically. Although the economic outlook portrayed in many forecasts remains difficult at the time of writing this report, the directors believe that the company is well placed to take advantage of any opportunities that might arise and are confident that with the effective application of its strategy the company will continue to trade profitably into the future.

Key performance indicators

The company’s key performance indicators (KPI’s) are summarised below:

Environmental matters                

The company recognises the importance of its environmental responsibilities and accepts that concern for the environment and all employees is an integral and fundamental part of its corporate business strategy. The company monitors its impact on the environment and endeavours to design and implement policies and processes to reduce any damage that might be caused by the company's activities. Initiatives include the safe disposal of commercial waste, the minimisation of waste going to landfill, reducing energy consumption and the use of renewable natural resources where possible.

UK Greenhouse gas emissions and energy use data for the period 1 January 2024 to 31 December 2024

Associated Greenhouse gases have been calculated following the HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government's Conversion Factors for Company Reporting. Cultech recognises its responsibility to ensure a safe and healthy environment and always endeavours to maintain sound environmental performance through the continued maintenance of our environmental management system, which is integrated into our overall business activities. Measures taken to improve energy efficiency across the company include increased video conferencing technology for staff meetings, to reduce the need for travel between sites; and the use of an electric car which produces significantly less CO2 than any gasoline-powered competitor by one director of the company. Cultech remains focused on wherever possible improving energy efficiency and reducing carbon emissions.

Stakeholder engagement

Statement by the directors in performance of their statutory duties in accordance with Section 172(1) Companies Act 2006         

The board of directors of Cultech Limited consider that we have acted in good faith and have made decisions in the way that we believe would be most likely to promote the success of the company for the benefit of its members as a whole, noting the matters set out in Section 172(1)(a)-(f) of the Act. Our plans are intended to have a positive, beneficial impact on the company over the mid to long term and to contribute to its continued success in our delivery of our premium quality products to the global markets that we serve. In order to facilitate this approach we have identified each of our key stakeholder groups, evaluated their interests and considered how we have engaged with and responded to each group during the year.                 

Employees                

Our senior management and wider team members are critical to the delivery of our plan. We are fortunate in that we have a proven track record of finding, training and retaining an outstanding workforce. This ensures a continuity of delivery and an inherent understanding by the team of the company’s desire for excellence in all that we do. Our people wish to work for an organisation with a strong commitment to ethical practices and compliance, whilst knowing that their views are recognised and acted upon. We therefore endeavour to be a responsible employer in our approach to the pay and benefits our team members receive, while the health, safety and well-being of our team is a key consideration in how we operate. The company has regular board meetings and communication with employees, together with on-going publication of information reports and bulletins to all staff members. There are regular team meetings and a full and comprehensive appraisal system for all staff members. We have developed over the years group values and policies in respect of workplace conduct to produce a supportive, respectful and friendly working environment. We invest heavily in learning and development to ensure that staff are equipped with the skills they need to do their roles. A rigorous Health, Safety and Environment policy is adopted to promote safe working practices as well as monitoring trends and making changes to procedures in response to those trends.                                

Customers                

Customers have more choice now than ever before in terms of both who they purchase goods and services from and how these transactions are carried out. In order to ensure we continue to maintain the premium products that our customers value we continually seek to invest in researching and developing cutting edge product. We also invest in providing our customer facing teams with the training required to ensure they can provide the support that our customers have come to expect from our team, delivering a high quality experience for all customers on a consistent basis. Complaints are closely monitored and remedial actions are taken quickly where appropriate to retain customer goodwill. Our aim is to develop a strong relationship with our customers over the long term and we understand that the support that our staff provide is critical in retaining such relationships.                

Funders and financial institutions                

We are fortunate to enjoy strong, well established links with each of our funding partners and maintain these relationships through regular communications. The provision of reliable, timely management information to each funder further enables these trusted partners to monitor our financial position, and provides comfort of the financial headroom available within the company at any time.                                 

Suppliers                

Engagement with our suppliers is also key to our success, and we seek to develop trusted long term, collaborative partnerships in order to facilitate improved performance. Communications with all suppliers are intended to be prompt, clear and responsive. We communicate with our key strategic suppliers regularly throughout the year and involve our senior management team within these discussions ensuring that any issues or opportunities can be effectively considered in an open forum, while continuing to develop the relationship between us.         

Local community                

Our plans and strategies further consider the impact of our operations on the community and environment, as well as our wider social responsibilities, and in particular how we comply with environmental legislation and react promptly to local community concerns. Our intention is to behave responsibly and to ensure that the management operate the business in a responsible manner, recognising the high standards of business conduct and good governance expected for a business such as ours. We will also seek to continue to offer high quality employment opportunities for local residents, and currently employ c.300 people across our business. Our plans involve continuing to invest in our facilities, ensuring all sites are well maintained and take advantage of improvements to energy consumption to reduce our environmental footprint. We would hope that this approach will nurture our reputation in the local communities in which we operate.

The nature of the business environment in which the company operates is inherently risky. Whilst it is not possible to eliminate all such risks and uncertainties, the company has an established risk management and internal control system in place to manage them.

The directors and management meet regularly to identify the risks that are considered most likely to have an impact on the business and its strategic priorities. If emerging risks are identified, these are incorporated immediately into the risk management process.

The following sets out the principal risks faced by the company and how they are mitigated:

Competition

• To achieve the company's strategy the company must maintain its competitive advantage by continuing to be innovative in its research and development activities. If the company does not succeed in keeping its products and manufacturing capabilities at the cutting edge of innovation then it could start to lose market share in its core markets.

• The company invests significant amounts of its profits in continuous project development and seeks to work in partnership with major research institutions wherever possible to ensure its products are market leading.

People

• The company depends on a flexible, diverse and well-motivated workforce. If the company does not succeed in attracting, developing and retaining skilled people, as well as understanding and embracing the diversity of those people, it will not be able to grow the business as anticipated.

• The company monitors staff turnover closely. Pay and conditions are reviewed regularly against the prevailing market to ensure that the company remains competitive. Succession planning and staff development are managed at all levels in the company, underpinned by a performance review process which is designed to assist in the career development of its staff and also to identify potential successors to key roles.

Reputation

• The company's ability to win new business and its relationship with customers, supply chain partners, employees and other stakeholders depends in large part on the good reputation that it has established and how it is perceived by others. The company's growth targets may not be achieved if its reputation is adversely affected.

• The steps taken to maintain, protect and enhance the company's reputation include effective leadership, community engagement and striving to operate a safe and sustainable business.

Health and safety

• The company's activities are often complex and require the continuous monitoring and management of health, safety and environmental risks. Failure to manage these risks could expose the company to a significant potential liability and to reputational damage.

• Detailed policies and procedures exist to mitigate such risks and are subject to review and monitoring by the business and external specialists. Compliance is monitored in a number of ways including audit, leadership involvement and inspections.

Global events

• In light of the recent situations and events arising in the UK and globally in recent periods, together with on-going significant inflationary pressures, the day to day operations of the business have been disrupted. The extent of the ongoing impact of these events is unclear and it is difficult to evaluate all of the potential implications on the company’s trade, customers, suppliers and the wider economy.

• The directors have prepared updated and sensitised forecasts for the coming year and have taken steps to ensure the company has sufficient funding to manage the company’s cash flow requirements as appropriate during this period of uncertainty, thus enabling the company to meet its obligations as they fall due.

Treasury operations and financial instruments

The company's operations expose it to a variety of financial risks that include the effects of price risk, credit risk, liquidity risk and interest rate cash flow risk.

The company has in place an informal risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs.

Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department.

Price risk

The company is exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the cost of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. The company has no exposure to equity securities price risk as it holds no listed or other equity investments.

Credit risk

The company has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to any individual counterparty is continually monitored in line with the company's credit control procedures. Credit risk insurance has been evaluated by the directors and has been utilised where appropriate based on an assessment of risk and cost effectiveness. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature.

Liquidity risk

The company actively maintains a mixture of long term and short term debt finance that is designed to ensure that the company has sufficient funds for operations and planned expansions.

Interest rate cash flow risk

The company has both interest bearing assets and interest bearing liabilities. Interest bearing assets comprise only cash balances, which earn interest at floating rates. Interest bearing liabilities comprise debt at fixed and floating rates.

On behalf of the board

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

The principal activity of the company continued to be that of the production and distribution of health food supplements

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

The results for the year are set out on pages 13 to 16.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Going concern

The financial statements have been prepared on a going concern basis which assumes that the company will continue in operational existence for the foreseeable future. In making their assessment the directors have reviewed the balance sheet, the likely future cash flows of the business and have considered the facilities that are in place at the date of signing the report.

At 31 December 2024 the company has net current assets of £8,065,687 (2023: £7,385,387) and a net assets position of £10,799,615 (2023: £10,202,769).

Global events such as the war in the Ukraine, coupled with global inflationary pressures, have impacted upon the business of the company and the wider group of which the company forms a part. At the date of signing these financial statements sales by the group into the worldwide territories it serves have remained strong and actions taken by the directors to safeguard its operations both before and during these events has meant that the company and group have been able to, and are forecast to, continue to operate within its existing facilities. The directors have been and remain in open dialogue with its facilities provider and they are fully aware of the on-going and forecast position of the business.

The directors have analysed the cash flow requirements of the company and group, and based on the future forecasts of the company, a review of the facilities in place and discussions with the providers of finance, the directors have a reasonable expectation that the company and group will be able to continue to operate within existing facility levels in place.

Therefore, at the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The company's policy is to strive for excellent working relationships with it's suppliers, this encourages mutual business development over the long term. Payments are usually made by monthly payments into the suppliers bank accounts in line with payment terms agreed with the individual supplier.

The company's financial instruments comprise of bank overdrafts, bank loans, invoice discounting facility and import facility. The main purpose of these instruments is to finance the company's working capital requirements.

The company's borrowings are subject to interest charges.

During the financial year, applied research and development work was directed towards the introduction of improved products, the application of new technology to reduce unit and operating costs and to improve service to customers.

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 company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The company's policy is to consult and discuss with employees, through unions, 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 company's performance.

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

The Strategic Report contains details on how directors have engaged with employees and taken account of their interests as part of the wider Stakeholder Engagement note contained in that report.

The strategy and future developments in the business are set out in the Strategic Report.

Energy and carbon report

The company report on its emissions, energy consumption and energy efficiency activities is included in the Strategic Report.

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

• state whether applicable 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 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.

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 company’s auditor 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 company’s auditor is aware of that information.

We have audited the financial statements of Cultech Ltd (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 company's affairs as at 31 December 2024 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 Auditor's 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 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 annual report. 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 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 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 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 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, 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.

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 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.

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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud; 

• Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection; 

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

• Performing audit work over the risk of management bias and override of controls, including 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 indicators of potential bias. 

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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Cultech Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Unit 2, Christchurch Road, Baglan Industrial Estate, Port Talbot, Neath Port Talbot, United Kingdom, SA12 7BZ.

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. The principal accounting policies adopted are set out below.

The financial statements have been prepared on a going concern basis which assumes that the company will continue in operational existence for the foreseeable future. In making their assessment the directors have reviewed the balance sheet, the likely future cash flows of the business and have considered the facilities that are in place at the date of signing the report.true

At 31 December 2024 the company has net current assets of £8,065,687 (2023: £7,385,387) and a net assets position of £10,799,615 (2023: £10,202,769).

Global events such as the war in the Ukraine, coupled with global inflationary pressures, have impacted upon the business of the company and the wider group of which the company forms a part. At the date of signing these financial statements sales by the group into the worldwide territories it serves have remained strong and actions taken by the directors to safeguard its operations both before and during these events has meant that the company and group have been able to, and are forecast to, continue to operate within its existing facilities. The directors have been and remain in open dialogue with its facilities provider and they are fully aware of the on-going and forecast position of the business.

The directors have analysed the cash flow requirements of the company and group, and based on the future forecasts of the company, a review of the facilities in place and discussions with the providers of finance, the directors have a reasonable expectation that the company and group will be able to continue to operate within existing facility levels in place.

Therefore, at the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

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.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of the goodwill allocated to the unit and then to the other assets of the unit pro-rate on the basis of the carrying amount of each asset in the unit.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight line method.

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:

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.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials on a first in, first out basis. Work in progress and finished goods include direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents 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.

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, 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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, 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 company 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 company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

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 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 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.

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.

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 leases asset are consumed.

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.

Research and development

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

In the application of the company’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.

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.

Stocks are valued at the lower cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the economic environment and stock loss trends.

Impairment of amounts owed by group undertakings. An impairment allowance of £441,418 (2023: £441,418) has been made against amounts due from fellow subsidiaries. This requires management to assess the future trading prospects of those subsidiaries on the basis of all objective evidence that is available.

Provision is made for costs that have been incurred but not yet invoiced. This requires managements best estimate of final costs that have been incurred based on the fulfilment by suppliers of their contractual agreements.

The company has not disclosed fees payable to the company's auditors for "other services" as the information is included in the consolidated financial statements of NSJL Limited. See note 24.

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

Their aggregate remuneration comprised:

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:

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

Freehold property with an initial cost of £671,347 was revalued to £1,105,000 in 2010 by an independent valuer not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties. The company applied the transitional arrangements of Section 35 of FRS102 and used this valuation as deemed cost and the properties are being depreciated from the valuation date.

The revaluation surplus is disclosed in note 21.

If revalued assets were measured using the historical cost model, the carrying amounts would have been as follows:

Cost of sales includes an expense of £24,851,424 (2023: £22,435,583) in respect of the cost of stock.

A provision of £443,370 (2023: £553,532) was made against the impairment of stocks due to slow-moving and obsolete stock.

The amounts owed by group undertakings are unsecured, interest free and have no fixed terms for repayment.

The amounts owed to group undertakings of £1,448,811 (2023: £nil) is due to parent company, NSJL Limited. The amounts are interest-free and unsecured with no fixed terms for repayment.

Secured loans

The bank loan is secured by legal charges over the assets of the company. The bank loan outstanding as at 31 December 2024 bears interest at 1.45% above base rate.

Included within other creditors is £2,934,715 (2023: £3,592,323) in relation to balances drawn down on the company's invoice discounting facility at the period end. The invoice discounting creditor is secured by a fixed charge over all of the debts purchased from the company and their associated rights and floating charges covering all property or undertaking of the company.

Included within other creditors is £2,319,548 (2023: £4,606,663) in relation to balances drawn on the company's supplier invoice facility at the period end. This creditor is secured by a fixed charge on the goods purchased from the agreed supplier and a fixed and floating charge over the assets of the company.

Secured loans

The bank loans and overdraft facility are secured by legal charges over the assets of the company. The bank loan outstanding as at 31 December 2024 bears interest at 1.45% above base rate.

The bank loan is secured by fixed charges over the assets of the company. The bank loan outstanding as at 31 December 2024 bears interest at 1.45% above base rate.

The other loans are unsecured and interest bearing.

Finance lease liabilities are secured on the specific assets to which the finance relates.

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

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The share premium account represents the consideration received on the issue of shares in the company in excess of the nominal value of those shares, net of share issue costs, bonus issues of shares and any subsequent capital reductions.

The revaluation reserve represents any increases in the carrying amounts of tangible assets on revaluation.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

During the year the company entered into the following transactions with entities which are related by virtue of common directorship/shareholding:

The following amounts were outstanding at the reporting end date:

During the year the company paid management fees to the parent company, NSJL Limited, of £619,527 (2023: £282,231) and received management fees from the fellow group company, Vega Nutritionals Limited of £25,000 (2023: £25,000).

Total gross amounts receivable from companies which are related by virtue of a common directorship/shareholder as at 31 December 2024 amounted to £1,019,078 (2023: £1,123,686), against which a provision for doubtful debt is carried of £376,700 (2023: £304,424). The net amount of £642,378 (2023: £819,262) is included in other debtors due within one year.

During the year the company paid rent to the director's pension scheme of £200,417 (2023:£194,125).

As at 31 December 2024 there was an amount receivable from the directors of the company of £75,187 (2023: payable to £4,988), which was interest free and unsecured. The amount receivable is included in other debtors due within one year (2023: other creditors due within one year) and was cleared subsequent to the year end.

The company is a wholly owned subsidiary of NSJL Limited, a company incorporated in the United Kingdom, its registered office is Unit 2 Christchurch Road, Baglan Industrial Estate, Port Talbot, SA12 7BZ.

NSJL Limited is the ultimate parent undertaking of the largest and smallest group of undertakings to consolidate these financial statements. The consolidated financial statements of NSJL Limited are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

The directors consider Dr N Plummer and Dr S F Plummer to be the ultimate controlling parties through their controlling interests in the share capital of NSJL Limited.