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Registered number: 09019725 MUSCLE FOODS LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
MUSCLE FOODS LIMITED COMPANY INFORMATION
Directors | N A Preston
| D P Farrelly
| R Lakhanpal
| E S O'Reilly
Registered number | 09019725
Registered office | 23-25 Park Lane Business Park
| Park Lane
| Old Basford
| Nottingham
| NG6 0DW
Independent auditor | Barnes Roffe Audit Limited
| Chartered Accountants & Statutory Auditor
| Leytonstone House
| 3 Hanbury Drive
| London
| E11 1GA
MUSCLE FOODS LIMITED CONTENTS
| Page
Strategic report | 1 - 2
Directors' report | 3 - 5
Independent auditor's report | 6 - 8
Statement of comprehensive income | 9
Balance sheet | 10
Statement of changes in equity | 11
Notes to the financial statements | 12 - 30
MUSCLE FOODS LIMITED STRATEGIC REPORT FOR THE PERIOD ENDED 31 JULY 2025
Introduction
The directors present their strategic report for the period ended 31 July 2025 for Muscle Foods Limited ("the Company").
Business review
The Company has continued to face challenging trading conditions in recent years. A combination of external factors, including the global pandemic, the conflict in Ukraine and sustained domestic inflation, resulted in supply chain disruption and increased cost pressures. Turnover for the period decreased by 25% from the prior year, reflecting the prior strategic intention to maintain a break-even position rather than pursue revenue growth. Gross margin remained constant at 17%, with increases in material costs not fully passed on to customers. Profit before tax for the year was £1,175,535, primarily attributable to the write-off of a historic creditor balance. At the end of the financial period the immediate group, of which the Company is a member, was separated from its previous group and acquired by new ownership with relevant sector experience. Subsequent to the year end, a restructuring review was undertaken to stabilise operations and address legacy inefficiencies. Early indicators show improved performance following the implementation of these measures. The new owners have introduced a revised strategic plan intended to return the business to a sustainable growth trajectory.
Principal risks and uncertainties
The principal risks and uncertainties facing the Company continue to include market competition, supply chain volatility and developments in technology. Management monitors these risks on an ongoing basis and has implemented appropriate controls to mitigate their potential impact. Market competition remains a key risk, with competitor activity continually assessed to ensure the Company maintains an appropriate market position. The Company continues to engage closely with customers to safeguard service levels and product quality, while marketing expenditure is monitored to ensure that investment delivers measurable returns. The supply chain environment remains exposed to fluctuations in availability, lead times and input costs. The Company works proactively with its suppliers to maintain quality standards and to reduce the risk of disruption. Product innovation continues to be an important strategic focus, and the Company collaborates with its supply chain to ensure that its customer proposition remains competitive and aligned to market expectations. Technology-related risks are managed through ongoing investment in the Company’s IT infrastructure and business systems. The Company’s platforms provide real-time visibility of trading performance, supporting accurate forecasting and informed operational decision-making. Continued development in these systems is expected to enhance both customer experience and internal efficiency. Given the broader international nature of the supply chain, global economic and geopolitical events continue to present potential risks to availability and cost of raw materials. The insight and support provided by the Company’s shareholders and new ownership structure remain valuable in identifying and managing these wider external risks. Page 1
MUSCLE FOODS LIMITED STRATEGIC REPORT (CONTINUED) FOR THE PERIOD ENDED 31 JULY 2025 This report was approved by the board and signed on its behalf.
N A Preston Director
Date: 7 January 2026
Page 2
MUSCLE FOODS LIMITED DIRECTORS' REPORT FOR THE PERIOD ENDED 31 JULY 2025 The directors present their report and the financial statements for the period ended 31 July 2025.
Directors' responsibilities statement
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently; ∙make judgments and accounting estimates that are reasonable and prudent; ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' reports may differ from legislation in other jurisdictions.
Results and dividends
The profit for the period, after taxation, amounted to £902,285 (2024 - loss £6,834,752). No dividends will be distributed for the period ended 31 July 2025 (2024 - £Nil).
Directors
The directors who served during the period were:
N A Preston (appointed 18 July 2025)
B Perkins (resigned 18 July 2025)
P A Mccarthy (resigned 18 July 2025)
Political contributions
The Company made no political donations during the period (2024 - £nil). Page 3
MUSCLE FOODS LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 31 JULY 2025
Going concern
As set out in the Strategic Report, the immediate group, of which the Company is a member, was acquired by new owners shortly before the end of the accounting period. Following the acquisition, management commenced a significant restructuring programme and implemented a revised strategic direction to stabilise and reposition the business. The Company reported a profit before tax of £1,175,535 for the period, driven primarily by the impact of the sale and associated restructuring activities. Net liabilities decreased by £2,002,285 compared with the prior year. Trading performance subsequent to the year end has shown further improvement, with results to date consistent with the expectations of the new strategic plan. As part of the going concern assessment, management has prepared detailed cash flow forecasts for a period of at least two years (FY26 and FY27), which have been compared to actual trading performance and updated to reflect the revised strategic direction. These forecasts indicate that the Company is expected to be cash generative over the forecast period and will have adequate resources to meet its liabilities as they fall due, subject to the achievement of the projected trading results. Revenue performance to date is broadly in line with budget. While the Company continues to report operating losses, the forecasts prepared by management project a return to profitability during FY27. This is supported by a number of initiatives already underway, including diversification of revenue streams and the realisation of synergy savings across the wider group. The Directors have considered the forecasts, the availability of funding and the actions taken by management to strengthen the operational and financial position of the business. On this basis, the Directors are satisfied that the Company has sufficient financial resources to continue to trade for the foreseeable future and that the going concern basis of preparation remains appropriate. Notwithstanding this assessment, the directors recognise that there are issues which indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern.
Financial instruments
Objectives and policies The Company's principal financial instruments comprise bank balances, trade creditors, trade debtors and hire purchase agreements. The main purpose of these instruments is to raise funds for the Company's operations and to finance the Company's operations. Price risk, credit risk, liquidity risk and cash flow risk Liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility throughcareful management of the day to day cashflows. In respect of loans, these comprise loans from hire purchase financing institutions. Interest rates on loans from financial institutions are variable but repayments are fixed. The Company ensures that sufficient funds are available to meet repayments. Trade debtors are managed by policies concerning the credit offered to customers and regular monitoring of amounts outstanding. Trade creditors liquidity risk is managed by ensuring that sufficient funds are available to meet amounts falling due. Page 4
MUSCLE FOODS LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 31 JULY 2025
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Auditor
The auditor, Barnes Roffe Audit Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. This report was approved by the board and signed on its behalf.
N A Preston Director
Date: 7 January 2026
Page 5
MUSCLE FOODS LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MUSCLE FOODS LIMITED
Opinion
We have audited the financial statements of Muscle Foods Limited (the 'Company') for the period ended 31 July 2025, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: ∙give a true and fair view of the state of the Company's affairs as at 31 July 2025 and of its 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 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 United Kingdom, including the Financial Reporting Council'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.
Material uncertainty related to going concern
We draw attention to note 2.3 in the financial statements, which indicates that the ongoing performance of the Company with restraints to cashflows is indicative of material uncertainty regarding the adoption of the going concern basis within the financial statements. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Page 6
MUSCLE FOODS LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MUSCLE FOODS LIMITED (CONTINUED)
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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit: ∙the information given in the Strategic report and the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and ∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report. We have nothing to report in respect of the following matters 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.
Responsibilities of directors
As explained more fully in the Directors' responsibilities statement set out on page 3, 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. Page 7
MUSCLE FOODS LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MUSCLE FOODS LIMITED (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with law and regulations, was as follows: Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our 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. Nick Bartlett (Senior statutory auditor) for and on behalf of Barnes Roffe Audit Limited Chartered Accountants Statutory Auditor Leytonstone House 3 Hanbury Drive London E11 1GA Date: 7 January 2026 Page 8
MUSCLE FOODS LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 JULY 2025
| 31 July | 30 June
| 2025 | 2024
Note | £ | £
Turnover | 4 | 22,954,183 | 30,712,067
Cost of sales |  | (19,073,272) | (25,642,018)
Gross profit |  | 3,880,911 | 5,070,049
Administrative expenses |  | (9,963,155) | (10,836,544)
Exceptional items | 10 | 7,561,904 | -
Operating profit/(loss) | 5 | 1,479,660 | (5,766,495)
Interest payable and similar expenses | 8 | (304,125) | (6,652)
Profit/(loss) before tax |  | 1,175,535 | (5,773,147)
Tax on profit/(loss) | 9 | (273,250) | (1,061,605)
Profit/(loss) for the financial period |  | 902,285 | (6,834,752)
The notes on pages 12 to 30 form part of these financial statements.
Page 9
MUSCLE FOODS LIMITED REGISTERED NUMBER: 09019725 BALANCE SHEET AS AT 31 JULY 2025
|  | 31 July |  | 30 June
|  | 2025 |  | 2024
Note |  | £ |  | £
Fixed assets |  |  |  |  |
Intangible assets | 11 |  | 347,102 |  | 3,890,686
Tangible assets | 12 |  | 71,432 |  | 126,144
|  |  | 418,534 |  | 4,016,830
Current assets |  |  |  |  |
Stocks | 13 | 629,094 |  | 1,010,164 |
Debtors: amounts falling due after more than one year | 14 | - |  | 273,250 |
Debtors: amounts falling due within one year | 14 | 788,180 |  | 1,022,415 |
Cash at bank and in hand | 15 | 158,386 |  | 33,516 |
|  | 1,575,660 |  | 2,339,345 |
Creditors: amounts falling due within one year | 16 | (2,727,646) |  | (9,091,912) |
Net current liabilities |  |  | (1,151,986) |  | (6,752,567)
Total assets less current liabilities |  |  | (733,452) |  | (2,735,737)
Net liabilities |  |  | (733,452) |  | (2,735,737)
Capital and reserves |  |  |  |  |
Called up share capital | 18 |  | 3,001,000 |  | 3,001,000
Share premium account | 19 |  | 8,000,000 |  | 8,000,000
Capital contribution reserve | 19 |  | 2,550,000 |  | 1,450,000
Profit and loss account | 19 |  | (14,284,452) |  | (15,186,737)
|  |  | (733,452) |  | (2,735,737)
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
N A Preston
Director
Date: 7 January 2026
The notes on pages 12 to 30 form part of these financial statements. Page 10
MUSCLE FOODS LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 JULY 2025
| Called up share capital | Share premium account | Capital contribution reserve | Profit and loss account | Total equity
| £ | £ | £ | £ | £
At 1 July 2023 | 3,001,000 | 8,000,000 | - | (8,351,985) | 2,649,015
Loss for the year | - | - | - | (6,834,752) | (6,834,752)
Movement in period | - | - | 1,450,000 | - | 1,450,000
At 1 July 2024 | 3,001,000 | 8,000,000 | 1,450,000 | (15,186,737) | (2,735,737)
Profit for the period | - | - | - | 902,285 | 902,285
Movement in period | - | - | 1,100,000 | - | 1,100,000
At 31 July 2025 | 3,001,000 | 8,000,000 | 2,550,000 | (14,284,452) | (733,452)
| The notes on pages 12 to 30 form part of these financial statements.
Page 11
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
1. | General information
Muscle Foods Limited ("the Company") is a private company, limited by shares, registered in England and Wales. The Company's registered number, registered office and principal place of business can be found on the Company Information page. The Company's principal activity is that of the online retail of high protein meals and goal-based meal subscriptions. 2.Accounting policies
| 2.1 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3). The following principal accounting policies have been applied:
| 2.2 | Financial Reporting Standard 102 - reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": ∙the requirements of Section 7 Statement of Cash Flows; ∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); ∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); ∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A; ∙the requirements of Section 33 Related Party Disclosures paragraph 33.7. This information is included in the consolidated financial statements of Musclefood Group Limited as at 31 July 2025 and these financial statements may be obtained from 23-25 Park Lane Business Park, Park Lane, Old Basford, Nottingham NG6 0DW. Page 12
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025 2.Accounting policies (continued)
| 2.3 | Going concern
As discussed in the Strategic Report, a significant restructuring of the business was commenced during the period and subsequent to the acquisition of the immediate group of which the Company is a member. This restructuring has continued post period-end. Whilst the Company has generated a pre-tax profit in the period of £1,175,535, as noted in the Strategic Report this has been primarily attributable to the write-off of a historic creditor balance. Net liabilities decreased by £2,002,285 compared with the prior year. Trading performance subsequent to the period-end has shown further improvement, with results to date consistent with the expectations of the new strategic plan. Management has prepared detailed cash flow forecasts for a period of at least two years (FY26 and FY27), which have been compared to actual trading performance and updated to reflect the revised strategic direction. These forecasts indicate that the Company is expected to be cash generative over the forecast period and will have adequate resources to meet its liabilities as they fall due, subject to the achievement of the projected trading results. Revenue performance to date is broadly in line with budget. While the Company continues to report operating losses, the forecasts prepared by management project a return to profitability during FY27. This is supported by a number of initiatives already underway, including diversification of revenue streams and the realisation of synergy savings across the wider group. The Directors have considered the forecasts, the availability of funding and the actions taken by management to strengthen the operational and financial position of the business. On this basis, the Directors are satisfied that the Company has sufficient financial resources to continue to trade for the foreseeable future and that the going concern basis of preparation remains appropriate. Notwithstanding this assessment, the directors recognise that there are issues which indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Page 13
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025 2.Accounting policies (continued)
| 2.4 | Foreign currency translation
Functional and presentation currency The Company's functional and presentational currency is GBP. Transactions and balances Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
| 2.5 | Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised: Sale of goods Revenue from the sale of goods is recognised when all of the following conditions are satisfied: ∙the Company has transferred the significant risks and rewards of ownership to the buyer; ∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; ∙the amount of revenue can be measured reliably; ∙it is probable that the Company will receive the consideration due under the transaction; and ∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
| 2.6 | Operating leases: the Company as lessee
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset. Page 14
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025 2.Accounting policies (continued)
| 2.7 | Leased assets: the Company as lessee
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
| 2.8 | Research and development
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, being 3 years. If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
| 2.9 | Finance costs
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
| 2.10 | Pensions
Defined contribution pension plan The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations. The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
| 2.11 | Termination benefits
Termination benefits are recognised as an expense when the entity is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the entity has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value. Page 15
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025 2.Accounting policies (continued)
| 2.12 | Current and deferred taxation
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that: ∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and ∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
| 2.13 | Exceptional items
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
| 2.14 | Intangible assets
Other intangible assets Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years. The estimated useful lives range as follows:
|  |  |  | Development expenditure | - |  | 3 - 5 years
|  |  |  | Computer software | - |  | 3 - 5 years
Page 16
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025 2.Accounting policies (continued)
| 2.15 | Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated 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. Depreciation 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 provided on the following bases:
|  |  |  | Improvement to property | - | Straight line over 3 years
|  |  |  | Plant and machinery | - | Straight line over 3 to 4 years
|  |  |  | Fixtures and fittings | - | 25% on cost and 15% on cost
|  |  |  | Computer equipment | - | Straight line over 3 years
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
| 2.16 | Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
| 2.17 | Debtors
Short-term debtors are measured at transaction price, less any impairment.
| 2.18 | Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
| 2.19 | Creditors
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
| 2.20 | Financial instruments
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS Page 17
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025 2.Accounting policies (continued)
| 2.20 | Financial instruments (continued)
102 to all of its financial instruments. Financial instruments are recognised in the Company's Balance sheet when the Company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. Basic financial assets Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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. Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments. Impairment of financial assets At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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. Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate. Page 18
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025 2.Accounting policies (continued)
| 2.20 | Financial instruments (continued)
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss. Basic financial liabilities Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities. Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. Page 19
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
3. | Judgments in applying accounting policies and key sources of estimation uncertainty
In the application of the Company's accounting policies, the directors are required to make certain judgments, 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 the 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 revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. In preparing these financial statements, the directors have made the following judgments and estimates: (a) Intangible fixed assets Intangible fixed assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. The assets are amortised over their useful lives, taking into account residual values. Residual value assessments consider issues such as expected future market conditions, the remaining life of the asset and projected disposal values. Net book value of intangible fixed assets as at 31 July 2025 was £347,102 (30 June 2024 - £3,890,686). The key judgements made are whether the asset qualifies for capitalisation, its useful economic life and whether any impairment should be recognised. (b) Tangible fixed assets Tangible fixed assets are depreciated over the useful lives, taking into account residual values where appropriate. Net book value of tangible fixed assets as at 31 July 2025 was £71,432 (30 June 2024 - £126,144). The key judgement is the useful economic life of the asset and whether any impairment should berecognised. (c) Deferred tax asset A deferred tax assets is recognised in respect of taxable losses carried forward when it is probable that the Company will generate sufficient future taxable profits against which the losses can be offset. The asset is disclosed within the financial statements as being due after more than one year when it is anticipated that the Company will not generate sufficient taxable profits to offset against the losses in the 12 months following the end of the financial reporting period. The key judgement is whether there is any uncertainty over the Company's ability to generate sufficient futureprofits to utilise the taxable losses it has available and the timing of the utilisation of those losses (d) Going concern As disclosed in Note 2, going concern is considered a key judgment. Page 20
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
4. | Turnover
| An analysis of turnover by class of business is as follows:
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Sale of goods | 22,954,183 | 30,712,067
| All turnover arose within the United Kingdom.
5. | Operating profit/(loss)
| The operating profit/(loss) is stated after charging:
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Hire of plant and machinery | 91,725 | 76,650
| Exchange differences | 10,021 | 12,622
| Other operating lease rentals | 431,712 | 328,728
| Depreciation of tangible fixed assets | 68,048 | 120,818
| Amortisation of intangible fixed assets | 1,627,035 | 1,633,296
| Write-back of trade creditor balances on sale of parent entity | (7,561,904) | -
| Write-off of intercompany bad debt to fellow subsidiary | - | 1,152,235
6. | Auditor's remuneration
| During the period, the Company obtained the following services from the Company's auditor:
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Fees payable to the Company's auditor for the audit of the Company's financial statements | 24,500 | 24,500
| The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.
Page 21
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
7. | Employees
| Staff costs were as follows:
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Wages and salaries | 2,732,185 | 3,031,380
| Social security costs | 302,353 | 332,168
| Cost of defined contribution scheme | 55,838 | 68,130
|  | 3,090,376 | 3,431,678
| The average monthly number of employees, including the directors, during the period was as follows:
|  |  | 31 July | 30 June
|  |  | 2025 | 2024
|  |  | No. | No.
|  | Production | 3 | 3
|  | Administration | 35 | 35
|  | Sales | 17 | 17
|  | Distribution | 37 | 58
|  |  | 92 | 113
8. | Interest payable and similar expenses
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Loan interest payable | 249,960 | -
| Other loan interest payable | 50,593 | -
| Finance leases and hire purchase contracts | 3,572 | 6,652
|  | 304,125 | 6,652
Page 22
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
9. | Taxation
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Corporation tax |  |
| Adjustments in respect of previous periods | - | (40,145)
|  | - | (40,145)
| Total current tax | - | (40,145)
| Deferred tax |  |
| Tax losses carried forward | 273,250 | 1,101,750
| Total deferred tax | 273,250 | 1,101,750
|  | 273,250 | 1,061,605
Page 23
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025 9.Taxation (continued)
| Factors affecting tax charge for the period/year
| The tax assessed for the period/year is lower than (2024 - higher than) the standard rate of corporation tax in the UK of 25% (2024 - 25%). The differences are explained below:
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Profit/(loss) on ordinary activities before tax | 1,175,535 | (5,773,147)
| Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%) | 293,884 | (1,443,287)
| Effects of: |  |
| Non-tax deductible amortisation of goodwill and impairment | 616,601 | -
| Expenses not deductible for tax purposes, other than goodwill amortisation and impairment | (1,073) | 3,759
| Capital allowances for period/year in excess of depreciation | 13,091 | (5,748)
| Adjustments to tax charge in respect of prior periods | - | (40,145)
| Non-taxable income | (1,890,476) | -
| Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge | - | 52,968
| Unrelieved tax losses carried forward | 967,973 | 1,383,940
| Surrender of tax losses for R&D tax credit refund | - | 8,368
| Movements in deferred tax | 273,250 | 1,101,750
| Total tax charge for the period/year | 273,250 | 1,061,605
| Factors that may affect future tax charges
The Company has taxable losses of £17,872,678 (2024 - £14,225,785) available for offset against future taxable profits. Page 24
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
10. | Exceptional items
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Trade creditor write-back on sale of parent entity | (7,561,904) | -
| As part of the agreement to dispose of the group, of which the Company is a member, a former fellow group company agreed to write-off certain inter-company trade balances totalling £7,271,432 and to settle further, non-group, liabilities totalling £290,471 on behalf of the Company.
11. | Intangible assets
|  | Development expenditure
|  | £
| Cost |
| At 1 July 2024 | 9,167,879
| Additions | 61,056
| Disposals | (8,685,202)
| At 31 July 2025 | 543,733
| Amortisation |
| At 1 July 2024 | 5,277,193
| Charge for the period on owned assets | 1,627,035
| On disposals | (6,707,597)
| At 31 July 2025 | 196,631
| Net book value |
| At 31 July 2025 | 347,102
| At 30 June 2024 | 3,890,686
Page 25
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
12. | Tangible fixed assets
|  | Short-term leasehold property | Plant and machinery | Fixtures and fittings | Computer equipment | Total
|  | £ | £ | £ | £ | £
| Cost or valuation |  |  |  |  |
| At 1 July 2024 | 438,068 | 189,519 | 104,621 | 133,977 | 866,185
| Additions | - | 2,046 | 9,799 | 1,491 | 13,336
| Disposals | - | (109,623) | (57,774) | (99,180) | (266,577)
| At 31 July 2025 | 438,068 | 81,942 | 56,646 | 36,288 | 612,944
| Depreciation |  |  |  |  |
| At 1 July 2024 | 437,796 | 131,071 | 66,508 | 104,666 | 740,041
| Charge for the period on owned assets | 272 | 30,684 | 20,590 | 16,502 | 68,048
| Disposals | - | (109,623) | (57,774) | (99,180) | (266,577)
| At 31 July 2025 | 438,068 | 52,132 | 29,324 | 21,988 | 541,512
| Net book value |  |  |  |  |
| At 31 July 2025 | - | 29,810 | 27,322 | 14,300 | 71,432
| At 30 June 2024 | 272 | 58,448 | 38,113 | 29,311 | 126,144
| The net book value of land and buildings may be further analysed as follows:
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Short leasehold | - | 272
Page 26
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
13. | Stocks
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Finished goods and goods for resale | 629,094 | 1,010,164
| The difference between purchase price or production cost of stock and their replacement cost is not material. The above includes a provision against slow-moving stock of £Nil (2024 - £Nil).
14. | Debtors
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Due after more than one year |  |
| Deferred tax asset | - | 273,250
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Due within one year |  |
| Trade debtors | 516,874 | 540,890
| Other debtors | 33,202 | 67,345
| Prepayments and accrued income | 238,104 | 414,180
|  | 788,180 | 1,022,415
15. | Cash and cash equivalents
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Cash at bank and in hand | 158,386 | 33,516
Page 27
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
16. | Creditors: Amounts falling due within one year
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Trade creditors | 1,348,210 | 7,952,183
| Other taxation and social security | 681,428 | 346,428
| Obligations under finance lease and hire purchase contracts | 9,480 | 30,608
| Other creditors | 463,339 | 545,169
| Accruals and deferred income | 225,189 | 217,524
|  | 2,727,646 | 9,091,912
17. | Deferred taxation
|  | 2025 | 2024
|  | £ | £
| At beginning of year | 273,250 | 1,375,000
| Charged to profit or loss | (273,250) | (1,101,750)
| At end of year | - | 273,250
| The deferred tax asset is made up as follows:
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Tax losses carried forward | - | 273,250
18. | Share capital
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
|  | Allotted, called up and fully paid |  |
|  | 3,001,000 (2024 - 3,001,000) D Ordinary shares of £1.00 each | 3,001,000 | 3,001,000
Page 28
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
19. | Reserves
Share premium account This includes any premium received on the issue of share capital. Capital contribution reserve During the year, the parent company provided further funding to the Company of £1,100,000, in addition to that recognised in the prior year totalling £1,450,000. This funding is not expected to be repaid and will be transferred to share capital upon future share issurance. Profit and loss account This reserve includes all current and prior period retained profits and losses net of dividends paid and other adjustments which are considered distributable.
20. | Pension commitments
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £55,838 (2024 - £68,130). Contributions totalling £8,869 (2024 - £13,212) were payable to the fund at the balance sheet date and are included in creditors.
21. | Commitments under operating leases
| At 31 July 2025 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|  |  |  |  | 31 July | 30 June
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Not later than 1 year | 296,875 | 388,264
| Later than 1 year and not later than 5 years | 950,000 | 1,078,956
| Later than 5 years | - | 56,013
|  | 1,246,875 | 1,523,233
Page 29
MUSCLE FOODS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 JULY 2025
22. | Related party transactions
| The Company has taken advantage of the exemption available under FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' not to disclose related party transactions with wholly owned group companies. The Company undertook transactions with companies under the control of two of the directors of the Company (Key management personnel) as follows:
|  | 31 July | 30 June
|  | 2025 | 2024
|  | £ | £
| Key Management personnel |  |
| Purchase of services | - | 103,373
| Rent paid | 74,120 | 65,930
| Other related parties |  |
| Sales | 205,457 | 79,429
| Purchases | 5,382,624 | 4,653,965
| Amount due to related party | 36,292 | 4,169,881
23. | Controlling party
The immediate parent company is Musclefood Group Ltd, a company incorporated in England and Wales. Following the acquisition of the Group, of which the Company is a member, the ultimate parent company is now We Are Soupa Ltd, a company incorporated in England and Wales. The most senior parent entity producing publicly available consolidated financial statements which include the Company is Musclefood Group Ltd. These financial statements are available from 23-25 Park Lane Business Park, Park Lane, Old Basford, Nottingham NG6 0DW.
Page 30