The directors present the strategic report for the 18 months ended 30 September 2024.

Kendal Nutricare Limited is a manufacturer of family nutrition products across the entire lifecycle from infants to the elderly.

We promote the use of natural milk fats in our products without the use of palm oil or fish oil, no GMO's and avoiding allergens like nuts, fish and eggs.

The 18 months ending 30 September 2024 saw the business build upon the previous year's strong momentum for the Kendamil brand and continue to establish significant growth both in the UK and international markets.

Due to the growth in these markets, Kendal Nutricare Ltd has recently commenced the expansion of it’s production capacity in Kendal through a capital investment programme along with significant investment in human resources throughout the organisation.

The directors have identified the following principal risks and uncertainties affecting the group:

Market Risk: The group is affected by the availability and prices for whole milk, skim milk, demineralised whey and lactose. To mitigate this risk the business keeps in close contact with suppliers to keep them updated on volume requirements and in certain circumstance contracts out for specific periods in order to lock in pricing.

Legislation and Regulatory risk: The business keeps up to date on all regulation changes through local offices, our international expert network and our partners on-the-ground. In the UK the company liaises directly with DEFRA, Campden Research and Public Health England to keep informed of changing regulations and in the United States, the company engages directly with a federal agency, the Food and Drug Administration.

Actions of Competitors: We operate in a highly competitive environment that is dominated by a small number of international conglomerates. The business has to continuously review and enhance its product range to ensure it stays ahead of its competition by offering innovative products that exceed customer expectations but at an affordable price.

The group monitors its performance using a number of measures. These include:

Sales - Group £262.2m (2023: £94.9m)

Sales - Company £209.3m (2023: £95.1m).

The Directors are happy with the current level of performance indicators.

Overview

The directors of Kendal Nutricare Limited (the “Company”) are committed to acting in accordance with their duties under Section 172 of the Companies Act 2006. In discharging these duties, the Board considers the likely long-term consequences of decisions, the interests of employees, relationships with suppliers, customers and other stakeholders, the impact of operations on the community and the environment, and the need to maintain a reputation for high standards of business conduct.

Long-Term Success

The Board’s strategy is to develop and supply high-quality early nutrition food products under the Kendamil brand, supporting infant and maternal health, while ensuring sustainable growth for shareholders. Key investment decisions — including product innovation, nutritional research, quality assurance, and expansion into international markets — are made with long-term value creation in mind.

Engagement with Stakeholders

- Customers & Parents: The Company engages directly with parents, healthcare professionals, and nutrition experts to ensure its products deliver the highest standards of safety, quality, and nutritional benefit. Feedback channels and consumer insights inform ongoing product development.
- Employees: The Company recognises its employees as central to success. KNC invests in training, skills development, career progression, and provides a safe, inclusive working environment that fosters innovation and pride.
- Suppliers & Partners: We maintain long-term, transparent relationships with suppliers, prioritising ethical sourcing, quality ingredients, and supply chain resilience. Partnerships are underpinned by trust and a shared commitment to excellence.
- Communities & Regulators: As a manufacturer of infant nutrition products in the UK, we take our responsibility to society seriously, ensuring compliance with UK and international food safety standards and engaging with regulators to champion best practice.
- Shareholders: The Board maintains clear communication with its shareholder, providing updates on financial performance, strategic progress, and long-term growth initiatives.

Environmental and Social Impact

Kendal Nutricare is committed to sustainability and minimising its environmental footprint. Initiatives include reducing plastic use in packaging, investing in recyclable and sustainable materials, and lowering carbon emissions across manufacturing processes. The Company also supports the local community in Kendal and contributes to global nutrition education initiatives.

High Standards of Business Conduct

The directors promote a culture of integrity, transparency, and accountability across the business. All employees are expected to uphold ethical standards, with compliance processes embedded across manufacturing, research, and commercial operations to safeguard product quality, regulatory compliance, and brand reputation.

On behalf of the board

The directors present their annual report and financial statements for the 18 months ended 30 September 2024.

The principal activity of the company is that of manufacturing and supply of nutrition and healthcare products.

The results for the 18 months are set out on page 11.

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

The directors who held office during the 18 months and up to the date of signature of the financial statements were as follows:

Kendal Nutricare Ltd has grown rapidly through successfully developing and launching new recipes to suit the regulatory requirements in both local and international markets.

The business has re-invested profits back into its Kendal production facility through a significant investment in buildings, equipment and people to meet growing demand.

We will continue to maintain the highest health and safety site, both onsite and across our supply chain,safeguarding the health and wellbeing of our customers, our employees and our partners.

As a group we remain committed to being competitively positioned in each of our international markets with the highest quality ingredients, at a price that is accessible to all parents.

The auditor, MHA, previously traded through the legal entity MacIntyre Hudson LLP. In response to regulatory changes, MacIntyre Hudson LLP ceased to hold an audit registration with the engagement transitioning to MHA Audit Services LLP.

MHA will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

In this report we will disclose Scope 1, 2 and 3 emissions.

Our key environmental impacts arise from:

• The ingredients used in our products

• The energy consumption at our factory

• The energy consumed at the point of use

For many aspects we have calculated the carbon emissions using the UK Government's 2024 GHG Conversion Factors for Company Reporting. For ingredients we have worked with suppliers and consultants to establish the carbon footprint.

Total carbon emissions per £1m of revenue in the 18 months to 30 September 2024 were 892.4 tCO2. It is difficult to make a comparison with competitors as we are the only Infant Formula business in the UK.

It should be noted that part of the Kendal Nutricare proposition is to offer good value for money to mums, which means our revenue per tonne is lower than competitors. Therefore, our intensity ratio will be higher than competitors.

As a company we have made a commitment to reach Net Zero by 2050. So, we endeavour to build environmental performance into most major business decisions, as this will not be easy given the energy intense nature of our business.

We have taken time this year to really understand our Carbon footprint, and therefore establish how we can make the most impactful changes. We are growing very rapidly so it is inevitable that our footprint will increase initially. Our goal is to focus on reductions in the carbon per product produced, and also to think holistically about our operation. We have a large number of capital projects in the planning and implementation phases, and all are being evaluated through a Carbon footprint lens.

The implication is that the changes we plan in Carbon Emissions will not become immediately apparent, but over a 5–10-year timescale. Within that timeframe we envisage a very significant drop in scope 1 and 2 emissions.

We have considered climate risk to our company; primarily how it could impact our ingredient supply, and what measures we can take to mitigate those risks.

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 group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of principal risks and uncertainties.

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.

Qualified opinion

We have audited the financial statements of Kendal Nutricare Limited (the 'parent company') and its subsidiaries (the 'group') for the 18 months ended 30 September 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, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:

• give a true and fair view of the state of the group's and parent company's affairs as at 30 September 2024 and of the group's profit for the period 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 qualified opinion

The decision to extend the financial period end was agreed after the period end date, and thus as auditors we did not observe the counting of physical inventories at the end of the period. We were unable to satisfy ourselves by alternative means concerning the inventory quantities of the parent company held at 30 September 2024, which are included in the balance sheets at £16,636,077, by using other audit procedures. Consequently we were unable to determine whether any adjustment to this amount was necessary.

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 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 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 qualified 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 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.

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the parent's inventory quantities included in the balance sheets of £16,636,077 held at 30 September 2024. We have concluded that where the other information refers to the inventory balance or related balances such as cost of sales, it may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

The decision to extend the financial year end was agreed after the year end date, and thus as auditors we did not observe the counting of physical inventories at the end of the year. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 30 September 2024, which are included in the parent's balance sheet at £16,636,077, by using other audit procedures. Consequently we were unable to determine whether any adjustment to this amount was necessary. In addition, were any adjustment to the inventory balance to be required, the strategic report would also need to be amended.

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Except for the matter described in the basis for qualified opinion section of our report, 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.

Arising solely from the limitation on the scope of our work relating to inventory, referred to above:

• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

• we were unable to determine whether adequate accounting records have been kept by the parent company.

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:

• 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.

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:

• enquiring of management and those charged with governance of any actual and potential litigation and claims;

• reviewing the financial statement disclosures and testing of supporting documentation to assess compliance with the relevant laws and regulations;

• assessing whether the judgements made in making accounting estimates are indicative of any potential bias;

• auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business; and

• auditing the risk of fraud in revenue, including through the testing of the cut off of income at the year end and sales transaction testing to ensure revenue is complete in the financial statements and recognised in the correct accounting period

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

A further description of our responsibilities 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 profit for the year was £38,345,450 (2023 - £35,913,281 profit).

Kendal Nutricare Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Mint Bridge Road, Kendal, LA9 6NL.

The group consists of Kendal Nutricare Limited and all of its subsidiaries.

The accounting period was extended in order to provide additional time for tax advisers to calculate final tax liability.

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 on the historical cost convention, modified to include the revaluation of certain tangible fixed assets. 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

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

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.

Goodwill represents the difference between the cost of acquisition of businesses and the fair value of the net assets acquired. Negative goodwill arises when the fair value of the net assets acquired exceed the cost of acquisition. Negative goodwill is initially recognised as a negative asset at cost and is subsequently measured at cost less accumulated amortisation. Negative goodwill is considered to have a finite useful life and is amortised to the profit and loss account over the period in which the associated non-monetary assets are recovered.

The consolidated group financial statements consist of the financial statements of the parent company Kendal Nutricare 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, with the exception of Kendamil Limited which is a dormant subsidiary.

All financial statements are made up to 30 September 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.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

The financial statements are prepared on a going concern basis. The directors report that the Group made a profit before tax of £54,726,936 for the 18 months ended September 2024, which has led to a positive profit and loss reserve as at 30 September 2024 of £82,428,940. The company’s net profit continues to grow due to sales growth, particularly in international markets. With total capital and reserves of £88,668,757, the directors consider the group to have a strong balance sheet to support future planned factory expansion investment in Kendal. In addition, projections prepared by the company for the future show that it will generate profits and will have sufficient resources to meet all liabilities as they fall due for the foreseeable future.

As a group we remain committed to being competitively positioned in each of our international markets with the highest quality ingredients and at a price that is accessible to all families.

The business has prepared profit and cash flow projections with appropriate sensitivity analyses around operational performance. On the basis of these projections, together with support from the group's directors, suppliers, and customers, at the time of approving the financial statements the directors are confident that the group has adequate resources to continue in operational existence for the foreseeable future. Therefore, 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.

The company recognises sales income when goods are despatched.

Research expenditure is written off against profits in the year in which it is incurred.

Goodwill represents the difference between the cost of acquisition of businesses and the fair value of the net assets acquired. Negative goodwill arises when the fair value of the net assets acquired exceed the cost of acquisition. Negative goodwill is initially recognised as a negative asset at cost and is subsequently measured at cost less accumulated amortisation. Negative goodwill is considered to have a finite useful life and is amortised to the profit and loss account over the period in which the associated non-monetary assets are recovered.

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:

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.

Interests are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investment is assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

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.

At each reporting period end date, the group 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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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.

All of the group's financial assets fall to be classified as basic financial assets and the group has no other financial assets.

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, bank loans and loans from fellow group companies, 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.

Equity instruments issued by the group 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 group.

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 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. 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 if, and only if, there is 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.

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 in which economic benefits from the leased asset are consumed.

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.

Revenue grants are recognised as income over the periods when the related costs are incurred. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

Capital grants are recognised as income as and when the related 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.

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.

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Negative goodwill is considered to have a finite useful life and is amortised to the profit and loss account over the period in which the associated non-monetary assets are recovered.

Stocks are held at costs less any provision for impairment. The calculation of any provision for impairment requires judgement. Such provisions are calculated using management's best estimate of likely future estimated selling price less costs to complete.

As detailed in note 13 to the financial statements, land and buildings and plant and equipment are stated at fair value based on valuations carried out by Sanderson Weatherall and Tallon & Associates respectively, who are firms of external independent valuers not connected with the company using their extensive market experience of the categories of assets valued. The valuations conform to International Valuation Standards and due to the specialised nature of the assets and the fact that the assets are rarely sold, except as part of a business combination, the most suitable valuation methodology was considered to be depreciated replacement cost. When calculating their valuations the external valuers have made various assumptions and estimates.

In the opinion of the directors, disclosure of analysis of turnover information would be seriously prejudicial to the interests of the Group, and as such it has not been disclosed.

The average monthly number of persons (including directors) employed by the group and company during the 18 months was:

Their aggregate remuneration comprised:

On 25 January 2024 the group disposed of its 100% holding in one of its subsidiary companies. Included in these financial statements are profits of £184,807 arising from the company's interests in the subsidiary up to the date of its disposal.

Of the charge to current tax in relation to discontinued operations, £0 relates to tax on profits and £0 arose on disposal.

The actual charge for the 18 months can be reconciled to the expected charge for the 18 months based on the profit or loss and the standard rate of tax as follows:

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

The carrying value of land and buildings includes land of £2,479,500 which is not depreciated.

Land and buildings were revalued at a value of £7,600,000 at 31 March 2018 by independent valuers not connected with the company on the basis of fair value. The valuation conforms to International Valuation Standards and due to the specialised nature of the assets and the fact that they are rarely sold, except as part of a business combination, the most suitable valuation methodology was considered to be depreciated replacement cost. Additions subsequent to the valuation have been added at fair value and the carrying value of land and buildings at 30 September 2024 was £10,730,849. A retrospective valuation has been undertaken since the 30 September 2024 and on this basis the directors consider this valuation to be a fair indication of the value of the land and buildings at 30 September 2024.

Plant and equipment were revalued at a value of £10,813,500 at 31 March 2018 by independent valuers not connected with the company on the basis of fair value. The valuation conforms to International Valuation Standards and due to the specialised nature of the assets and the fact that they are rarely sold, except as part of a business combination, the most suitable valuation methodology was considered to be depreciated replacement cost. Additions subsequent to the valuation have been added at fair value and the carrying value of plant and equipment at 30 September 2024 was £10,288,604. A retrospective valuation has been undertaken since the 30 September 2024 and on this basis the directors consider this valuation to be a fair indication of the value of the plant and equipment at 30 September 2024.

If revalued assets were measured using the cost model, the carrying amounts would have been approximately £12,699,538 (2023 - £12,646,630), being cost £19,381,923 (2023 - £18,493,025) and depreciation £6,682,385 (2023 - £5,846,395).

Details of the company's subsidiaries at 30 September 2024 are as follows:

On 25 January 2024 the group disposed of its 100% holding in Kendal Nutricare USA LLC. Included in these financial statements are profits of £184,807 arising from the company's interests in Kendal Nutricare USA LLC up to the date of its disposal.

Included within this figure is an impairment loss of £103,220 (2023: £217,014) which was recognised against stock during the year due to slow-moving and obsolete stock.

Bank loans and overdrafts of £Nil (2023: £205,160) were secured by a first legal charge from the borrower over the property at Mint Bridge, Kendal and a debenture from the borrower over all assets of the undertaking. The loan was settled in full during the period and the charge was released in September 2024.

Bank loans and overdrafts of £Nil (2023: £270,793) are secured by a first legal charge from the borrower over the property at Mint Bridge, Kendal and a debenture from the borrower over all assets of the undertaking. The loan was settled in full during the period and the charge was released in September 2024.

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

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.

Included within other reserves, is a currency translation reserve totalling £Nil (2023: £100,099). This reserve contains the cumulative translation differences created by the the subsidiary entity, Kendal Nutricare USA LLC, having a functional currency of US Dollars. As a result of the sale of Kendal Nutricare USA LLC, this balance has been released to the SOCI and thus has a balance of £Nil at the year end.

On 25 January 2024 the group disposed of its 100% holding in one of its subsidiary companies. Included in these financial statements are profits of £184,807 arising from the company's interests in the subsidiary up to the date of its disposal.

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:

During the 18 months the group entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

The following amounts were outstanding at the reporting end date:

The loan held with Metro Bank at the year was guaranteed by the company's director. The loan balance was settled in full during the period and the loan guarantee was released in September 2024.

Loans to directors were fully repaid by 31 December 2024.

The group is under the control of Mr R McMahon by virtue of his majority shareholding throughout the current and previous year.

The company commissioned an external valuation of land and buildings as at 31 March 2023 but this was not reflected in the prior period's accounts. Therefore, the below prior period adjustment (and associated deferred taxation adjustment) is to bring the valuation of land and buildings in line with the external valuation as at 31 March 2023.