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Registered number: 02027942 SPINNEYS SOURCING LIMITED (FORMERLY J.H.F. LIMITED) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
SPINNEYS SOURCING LIMITED COMPANY INFORMATION
Directors | S K V Sekharan
| M K Agarwal
Registered number | 02027942
Registered office | Spinneys Sourcing Limited
| Challenge Road
| Ashford
| Middlesex
| TW15 1AX
Independent auditor | Menzies LLP
| Chartered Accountants & Statutory Auditor
| Magna House
| 18-32 London Road
| Staines-Upon-Thames
| TW18 4BP
Bankers | HSBC
| 60 Queen Victoria Street
| London
| EC4N 4TR
SPINNEYS SOURCING LIMITED CONTENTS
| Page
Strategic report | 1
Directors' report | 2 - 3
Independent auditor's report | 4 - 6
Statement of Profit or Loss and Other Comprehensive Income | 7
Statement of financial position | 8 - 9
Statement of changes in equity | 10
Statement of cash flows | 11
Notes to the financial statements | 12 - 30
Detailed profit and loss account and summaries | 30 - 31
SPINNEYS SOURCING LIMITED STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2025
Introduction
The directors present their strategic report together with the audited financial statement for the year end 31 December 2025. Spinneys Sourcing Limited changed their reporting name during the period, from J.H.F. Limited.
Business review
The Company is a subsidiary of Centurio Holdings Limited (wholly owned subsidiary of Spinneys 1961 Holding PLC, a Company registered in DIFC, United Arab Emirates (“the Group”)). The group is principally engaged in the operation of supermarkets in United Arab Emirates, Sultanate of Oman and Saudi Arabia. The principal activity of the Company during the year ended 31 December 2025 continued to be supporting the growth of the group supermarkets operations in the United Arab Emirates, KSA and the Oman region by supplying foodstuff and non-food groceries items in accordance with their requirements. The Company is not a wholesale business but a vertically integrated procurement business, directly linked to the group retail business.
Financial key performance indicators
Turnover has increased from £45.6m to £51.0m. Sales to the group represent 99% (2024 - 99%) of total turnover. The remaining 1% (2024 - 1%) are made up of sales to Bahrain and Qatar. The Company will continue to promote new product development and sourcing to further growth sales. Gross margin 7.1% (2024 - 7.1%) is an improvement on last year and profit before tax has increased from £265,708 for the year ended 2024 to £529,362 for the year ended 2025. A dividend was paid in 2025. Customer and supplier payment terms have been maintained in line with previous year. At 31 December 2025 the Company had cash at bank and in hand of £873,787 (2024 - £770,343). The balance sheet position of the Company has changed slightly from £1,344,753 to £1,629,619 at 31 December 2025.
Principal risks and uncertainties
The Group has been in the region for over 50 years and has strategies in place to manage the risk associated with adverse movement in currencies and the price of oil. These strategies have ensured the group retains market share and profitability in times of difficult economic conditions. The Company supplies to United Arab Emirates, Sultanate of Oman and Saudi Arabia in the Middle East which are by and large politically stable.
Future developments
The Group’s strong performance in 2025 continues, reflecting ongoing focus on strategic store expansion, the enhancement of fresh food and private label assortments, and the integration of digital innovation across the business. During the year, the Group is proud to announce entry into Kuwait and the Philippines, which represent significant milestones in regional and international growth journey. This report was approved by the board and signed on its behalf.
S K V Sekharan Director | M K Agarwal Director
Date: 23 January 2026 |
Page 1
SPINNEYS SOURCING LIMITED DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2025 The directors present their report and the financial statements for the year ended 31 December 2025.
Directors' responsibilities statement
The directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements, in accordance with applicable law. Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK. 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 the financial statements, the directors are required to: ∙select suitable accounting policies and then apply them consistently; ∙make judgments and estimates that are reasonable and prudent; ∙state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements; ∙assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and ∙use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Results and dividends
The profit for the year, after taxation, amounted to £384,867 (2024 -£195,523). In the year dividends totalling £100,000 (2024 - £300,000) were voted.
Directors
The directors who served during the year were:
A L Fernandes (resigned 15 May 2025)
M Hendrikse (resigned 20 January 2025)
S K V Sekharan
M K Agarwal
Qualifying third party indemnity provisions
The directors' benefit from a qualifying indemnity provision in the form permitted by The Companies Act (Audit, Investigations and Community Enterprise) 2004 ("CAICE") new sections 309A, 309B and 309C in respect of certain third party actions against directors. No claim or notice of claim in respect of these indemnities has been received in the period. Financial instruments Information about the financial instruments is given in note 18. Page 2
SPINNEYS SOURCING LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 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
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
Strategic Report
The company has chosen, in accordance with Companies Act 2006, S. 414C(11), to set out in the company's strategic report information required by Large and Medium-sized Companies (accounts and reports) Regulations 2008, certain matters which are required to be disclosed in the directors' report have been omitted as they are included in the strategic report. These matters relate to the business review, principal risks and uncertainties and financial key performance indicators. This report was approved by the board and signed on its behalf.
S K V Sekharan Director | M K Agarwal Director
Date: 23 January 2026 | Date: 23 January 2026
Page 3
SPINNEYS SOURCING LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SPINNEYS SOURCING LIMITED
Opinion
We have audited the financial statements of Spinneys Sourcing Limited for the year ended 31 December 2025 which comprise the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 13 - 18. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. In our opinion the financial statements: ∙give a true and fair view of the state of the Company's affairs as at 31 December 2025 and of its profit for the year then ended; ∙have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; 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.
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. Our evaluation of the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included: A review of budgets for the period 12 months from the date of accounts signing and a consideration of the continued growth in the industry post year end. The forecasts are deemed reasonable based on expected sales and margins remaining at current levels. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Page 4
SPINNEYS SOURCING LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SPINNEYS SOURCING LIMITED (CONTINUED)
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 year for which the financial statements are prepared is consistent with the financial statements; and ∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report. We have nothing to report in respect of the following matters 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 on page 2, 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. 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: ∙The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates, and considered the risk of acts by the Company that were contrary to applicable laws and regulations, including fraud. We determined that the following laws and regulations were most significant to the entity, including UK Companies Act, employment law, tax legislation and regulations set out by the Civil Aviation Authority. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Page 5
SPINNEYS SOURCING LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SPINNEYS SOURCING LIMITED (CONTINUED) ∙We understood how the Company is complying with those legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures. We also agreed financial statement disclosures to underlying supporting documentation, primarily in regards to charges over the Company's land and buildings. Finally, we confirmed that in the reporting period there had been no correspondence with HMRC. ∙The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area. ∙We assessed the susceptibility of the Company financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included: °Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud; °Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; °Challenging assumptions and judgments made by management in its significant accounting estimates; and °Performed analytical procedures to identify any unusual or unexpected relationships; and °Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations. ∙As a result of the above procedures we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: °Posting of unusual journals and complex transactions; and °Incorrect treatment of temporary staff. 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. Grant Lee (Senior statutory auditor) for and on behalf of Menzies LLP Chartered Accountants Statutory Auditor Magna House 18-32 London Road Staines-Upon-Thames TW18 4BP 23 January 2026 Page 6
SPINNEYS SOURCING LIMITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2025
|  |  |  | 2025 | 2024
|  |  | Note | £ | £
Revenue | 5 | 51,032,049 | 45,638,868
Cost of sales |  | (47,407,023) | (42,392,136)
Gross profit |  | 3,625,026 | 3,246,732
Administrative expenses |  | (3,014,811) | (2,875,342)
Profit from operations | 6 | 610,215 | 371,390
Finance income | 8 | 83 | 120
Finance expense | 8 | (80,936) | (105,802)
Profit before tax |  | 529,362 | 265,708
Tax expense | 9 | (144,495) | (70,185)
Total comprehensive income |  | 384,867 | 195,523
The notes on pages 13 to 30 form part of these financial statements.
Page 7
SPINNEYS SOURCING LIMITED REGISTERED NUMBER: 02027942 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2025
| 2025 | 2024
Note | £ | £
Assets |  |
Non-current assets |  |  |
Property, plant and equipment | 13 | 4,607,824 | 4,650,367
Right-of-use assets | 14 | 1,542 | 12,596
|  | 4,609,366 | 4,662,963
Current assets |  |  |
Inventories | 15 | 118,602 | 91,792
Trade and other receivables | 16 | 4,313,086 | 2,759,114
Cash and cash equivalents |  | 873,787 | 770,343
|  | 5,305,475 | 3,621,249
Total assets |  | 9,914,841 | 8,284,212
Liabilities |  |
Non-current liabilities |  |  |
Loans and borrowings | 18 | 1,032,600 | 1,197,250
|  | 1,032,600 | 1,197,250
Current liabilities |  |  |
Trade and other liabilities | 17 | 7,088,579 | 5,571,009
Loans and borrowings | 18 | 164,043 | 171,200
|  | 7,252,622 | 5,742,209
Total liabilities |  | 8,285,222 | 6,939,459
Net assets |  | 1,629,619 | 1,344,753
Issued capital and reserves |  |  |
Share capital | 20 | 30,000 | 30,000
Retained earnings |  | 1,599,619 | 1,314,753
TOTAL EQUITY |  | 1,629,619 | 1,344,753
Page 8
SPINNEYS SOURCING LIMITED REGISTERED NUMBER: 02027942 STATEMENT OF FINANCIAL POSITION (CONTINUED) AS AT 31 DECEMBER 2025 The financial statements on pages 7 to 30 were approved and authorised for issue by the board of directors and were signed on its behalf by:
S K V Sekharan | M K Agarwal
Director | Director
Date: 23 January 2026 | Date:23 January 2026
The notes on pages 13 to 30 form part of these financial statements. Page 9
SPINNEYS SOURCING LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2025
| Share capital | Retained earnings | Total equity
| £ | £ | £
At 1 January 2024 | 30,000 | 1,419,230 | 1,449,230
Comprehensive income for the year |  |  |
Profit for the year | - | 195,523 | 195,523
Total comprehensive income for the year | - | 195,523 | 195,523
Contributions by and distributions to owners |  |  |
Dividends | - | (300,000) | (300,000)
Total contributions by and distributions to owners | - | (300,000) | (300,000)
At 31 December 2024 | 30,000 | 1,314,753 | 1,344,753
At 1 January 2025 | 30,000 | 1,314,752 | 1,344,752
Comprehensive income for the year |  |  |
Profit for the year | - | 384,867 | 384,867
Total comprehensive income for the year | - | 384,867 | 384,867
Contributions by and distributions to owners |  |  |
Dividends | - | (100,000) | (100,000)
Total contributions by and distributions to owners | - | (100,000) | (100,000)
At 31 December 2025 | 30,000 | 1,599,619 | 1,629,619
The notes on pages 13 to 30 form part of these financial statements.
Page 10
SPINNEYS SOURCING LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2025
|  |  |  | 2025 | 2024
|  |  | Note | £ | £
Cash flows from operating activities |  |  |
Profit for the year |  | 384,867 | 195,523
Adjustments for |  |  |
Depreciation of property, plant and equipment | 13 | 84,843 | 78,840
Tax interest |  | (83) | (120)
Finance expense |  | 80,936 | 105,802
Loss on disposal of property, plant and equipment |  | 5,466 | 2,076
Income tax expense | 9 | 144,495 | 70,156
|  | 700,524 | 452,277
Movements in working capital: |  |  |
(Increase)/decrease in trade and other receivables |  | (1,536,537) | 666,176
(Increase)/decrease in inventories |  | (26,810) | 76,762
Increase/(decrease) in trade and other payables |  | 1,556,417 | (132,057)
Cash generated from operations |  | 693,594 | 1,063,158
Income taxes paid |  | (200,776) | (122,689)
Net cash from operating activities |  | 492,818 | 940,469
Cash flows from investing activities |  |  |
Purchases of property, plant and equipment |  | (43,816) | (57,261)
Proceeds from disposal of property, plant and equipment |  | 7,102 | 1,850
Tax interest |  | 83 | 120
Net cash used in investing activities |  | (36,631) | (55,291)
Cash flows from financing activities |  |  |
Repayment of bank borrowings |  | (171,807) | (163,044)
Payments of finance lease creditors |  | - | (7,723)
Interest paid |  | (80,936) | (106,383)
Dividends paid to the holders of the parent |  | (100,000) | (300,000)
Net cash used in financing activities |  | (352,743) | (577,150)
Net increase in cash and cash equivalents |  | 103,444 | 308,028
Cash and cash equivalents at the beginning of year |  | 770,343 | 462,315
Cash and cash equivalents at the end of the year |  | 873,787 | 770,343
The notes on pages 13 to 30 form part of these financial statements. Page 11
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
1. | Basis of preparation
Spinneys Sourcing Limited, formerly J.H.F. Limited, (the 'Company') is a private company limited by shares, incorporated and domiciled in the UK under the Companies House Act 2006 and is registered in England and Wales. The Company changed its name from J.H.F. Limited to Spinneys Sourcing Limited on 03 November 2025. The registered office is disclosed on the company information page. The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). Details of the Company's accounting policies, including changes during the year, are included in note 3. In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. The areas where judgments and estimates have been made in preparing the financial statements and their effects are disclosed in note 4.
| 1.1 Basis of measurement
The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.
| 1.2 Changes in accounting policies i) New standards, interpretations and amendments effective from 1 January 2026
The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by the International Accounting Standards Board ('IASB') that are mandatory for the current reporting period.
| ii) | New standards, interpretations and amendments not yet effective
IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1 unchanged and complementing them with new requirements. In addition, some paragraphs from IAS 1 have been moved to IAS 8 and IFRS 7. Furthermore, the IASB has made minor amendments to IAS 7 and IAS 33 Earnings Per Share. IFRS 18 introduces new requirements to: ∙present specified categories and defined subtotals in the statement of profit or loss ∙provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements ∙improve aggregation and disaggregation. An entity is required to apply IFRS 18 for annual reporting periods beginning on or after 1 January 2027, with earlier application permitted. The amendments to IAS 7 and IAS 33, as well as the revised IAS 8 and IFRS 7, become effective when an entity applies IFRS 18. IFRS 18 requires retrospective application with specific transition provisions. The directors of the entity anticipate that the application of these amendments may have an impact on the financial statements in future periods. Page 12
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
2. | Going Concern
The directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operation existence for the foreseeable future. The parent company will continue to provide financial support to Spinneys Sourcing Limited to ensure they will be able to meet their debt and financial obligations as and when they become due. They will also continue to use Spinneys Sourcing Limited to source UK goods with no plans for current operations to change. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. 3.Accounting policies
| 3.1 | Foreign currency
Transactions in foreign currencies are translated into the respective functional currencies of the operations at the spot exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at each reporting date are translated into the functional currency at the spot exchange rates as at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated into the functional currency at the spot exchange rate at the date that the fair value was determined. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on translation are recognised in profit or loss.
| 3.2 | Revenue
Revenue represents the amount receivable for the provision of services and the sale of goods during the year, excluding VAT and trade discounts. Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be measured reliably. Revenue is recognised on dispatch of goods, this being the point in time the risks and rewards associated with the sale of goods are transferred to the customer. The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money. Variable consideration If the consideration in a contract includes a variable amount (e.g. rebates), the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
| 3.3 | Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
| (i) Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the Statement of Profit or Loss and Other Comprehensive Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Page 13
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 3.Accounting policies (continued)
| 3.3 | Taxation (continued)
| (ii) Current tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
| 3.4 | Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company. Land is not depreciated. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:
|  | Freehold property | over 50 years straight line
|  | Furniture & equipment | 20% reducing balance & 33% straight line
The residual value and the useful life of an asset is reviewed at least at each financial year-end and if expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate in accordance with IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors'. Gains or losses arising on the disposal of the property, plant and equipment are determined as the difference between the disposal proceeds and the carrying value of the asset and are recognised in profit or loss. Page 14
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 3.Accounting policies (continued)
| 3.5 | Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When 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. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease (see note 3.4). When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase (see note 3.4). Page 15
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 3.Accounting policies (continued)
| 3.6 | Right of use asset
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
| The Company as a lessee
The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, which is generally the case for leases in the company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. Lease payments included in the measurement of the lease liability comprise: ∙fixed lease payments (including in-substance fixed payments), less any lease incentives; The lease liability is included in the 'Loans and borrowings' line in the Statement of Financial Position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use assets are presented as a separate line in the Statement of Financial Position. The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 3.5. As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.
| 3.7 | Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first in, first out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Page 16
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 3.Accounting policies (continued)
| 3.8 | Impairment of non-financial assets.
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or CGU's fair value less cost of disposal and its value in use.
| 3.9 | Financial instruments
Financial assets Financial assets are recognised in the Statement of Financial Position when, and only when, the Company becomes a party to the contractual provisions of the instrument. Financial assets are initially recognised at fair value plus directly attributable transaction costs. All financial assets are classified as loans and receivables; these comprise trade and other receivables and cash and cash equivalents. Loans and receivables are non-derivative financial assets with fixed or determinable payments that not quoted in an active market. After initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. If there is objective evidence that there is an impairment loss on loans and receivables, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future future cash flows discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance discount. A financial asset is derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and reward are transferred. The Company applies IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade receivables and contract assets. The expected loss rates are based on the payment profiles of sales over prior periods and the corresponding historical credit losses experienced during the period. Financial liabilities Financial liabilities include borrowings and trade and other payables. Financial liabilities are obligations to pay cash or other financial assets and are recognised in the Statement of Financial Position when, and only when, the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially recognised at fair value adjusted for any directly attributable transaction costs. After initial recognition, financial liabilities are measured at amortised cost using the effective interest method, with interest-related charges recognised as an expense in finance costs. Discounting is omitted where the effect of discounting is immaterial. A financial liability is derecognised only when the contractual obligation is extinguished, that is, when the obligation is discharged, cancelled or expires. Page 17
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 3.Accounting policies (continued)
| 3.10 | Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the statement of comprehensive income in the year to which they relate.
| 3.11 | Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the directors. In the case of final dividends, this is when approved by the shareholders at the AGM. Dividends on preference shares, which are classified as a financial liability, are treated as finance costs and are recognised on an accruals basis when an obligation exists at the reporting date.
4. | Accounting estimates and judgments
When preparing the financial statements, management makes a number of judgments, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses. The matters described below are considered to be the most important in understanding the judgments that are involved in preparing these statements and the uncertainties that could impact the amounts reported in the results of operations, financial position, and cash flows. Judgements: Customer rebates The recognition of customer rebates and other fees payable may require estimation at the reporting date where the amounts have not been invoiced for the pre-determined period of which the rebate or other fees are payable. Accruals for goods received not yet invoiced Accruals are recognised when it is probable that there will be a future outflow of funds resulting from past operations or events which can be reasonably estimated. Given the volume of goods supplied to the Company but not yet invoiced, the timing of recognition requires the application of judgment to facts and circumstances, which can be subject to change. Page 18
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
5. | Revenue
| The following is an analysis of the Company's revenue for the year from continuing operations:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Sale of goods | 53,571,544 | 47,861,391
| Customer rebate | (2,539,495) | (2,222,523)
|  | 51,032,049 | 45,638,868
| A monthly rebate of 2.5% is due against specific Group sales relating to £908,263 (2024 - £837,039). A growth rebate is due based on a variable consideration of the number of group sales, this year calculated at 3.15% and relates to £1,631,232 (2024 - £1,385,484).
| Analysis of revenue by country of destination:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Middle East | 51,002,340 | 45,632,398
| UK | 29,709 | 6,470
|  | 51,032,049 | 45,638,868
6. | Operating profit
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Depreciation charge | 84,843 | 78,840
| Loss on disposal of property, plant and equipment | 5,466 | 2,076
| Loss/(gain) on foreign exchange differences | 17,764 | (18,463)
| Audit fee | 22,900 | 21,800
Page 19
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
7. | Employees
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Employee benefit expenses (including directors) comprise: |  |
| Wages and salaries | 1,461,649 | 1,484,709
| Social security costs | 178,708 | 158,384
| Defined contribution pension cost | 58,472 | 55,083
|  | 1,698,829 | 1,698,176
| Key management personnel compensation Key management personnel are the directors of the Company listed on page 1.
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Directors' remuneration |  |
| Salary | 16,797 | 190,273
| Short term benefits | 935 | 13,085
|  | 17,732 | 203,358
| The amounts included in the above are in relation to the highest paid director, who is the only director remunerated in the Company. No payments were made to money purchase pension schemes (2024 - £nil).
| Employee Numbers The monthly average number of persons, including the directors, employed by the Company during the year was as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | No. | No.
| Directors | 3 | 3
| Staff | 39 | 40
| Total | 42 | 43
Page 20
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
8. | Finance income and expense
| Recognised in profit or loss
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
Finance income |  |
| Interest on: |  |
| - Bank deposits | 83 | 120
| Total finance income | 83 | 120
| Finance expense |  |
| Bank interest payable | 80,630 | 104,463
| Finance leases (interest portion) | 306 | 1,339
| Total finance expense | 80,936 | 105,802
| Net finance expense recognised in profit or loss | (80,853) | (105,682)
Page 21
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
9. | Tax expense
| 9.1 Income tax recognised in profit or loss
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Current tax |  |
| Current tax on profits for the year | 144,495 | 70,156
| Adjustments in respect of prior years | - | 29
| Total current tax | 144,495 | 70,185
| Total tax expense |  |
| Total income tax recognised in profit or loss | 144,495 | 70,185
|  | 144,495 | 70,185
| All tax recognised in the period related to continuing operations.
| The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Profit for the year | 384,867 | 195,523
| Income tax expense (including income tax on associate, joint venture and discontinued operations) | 144,495 | 70,185
| Profit before income taxes | 529,362 | 265,708
| Tax using the Company's domestic tax rate of 25% (2024:25%) | 132,341 | 66,427
| Fixed asset differences | - | 3,729
| Adjustments to tax charge in respect of prior periods | - | 29
| Expenses not deductable for tax purposes | 12,154 | -
| Total tax expense | 144,495 | 70,185
| The Company falls within the scope of Pillar Two legislation and disclosures will be included within the consolidated financial statements of Spinneys 1961 Holding plc (see note 24). The obligation to pay top-up tax rests with the ultimate parent entity.
Page 22
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 9.Tax expense (continued)
| 9.2 Current tax assets and liabilities
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Current tax assets |  |  |
| Tax recoverable |  | 17,435 | -
|  |  | 17,435 | -
| Current tax liabilities |  |  |
| Corporation tax payable |  | - | 38,847
|  |  | - | 38,847
10. | Deferred tax
A deferred tax liability of £231,421 (2024 - £231,319) has not been recognised. This liability has arised in relation to capital allowances in excess of depreciation, and the directors have agreed not to recognise this amount due to being immaterial.
11. | Dividend paid and proposed
An interim dividend for the year ended 31 December 2024 of £3.33 per share (2024: £10) was declared. The interim dividend, of £100,000 (2024: £300,000), was approved before the reporting period end and was paid before the year end.
12. | Auditor's remuneration
| During the year, the Company obtained the following services from the Company's auditor:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Fees payable to the Company's auditor for the audit of the Company's financial statements | 22,900 | 21,800
Page 23
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
13. | Property, plant and equipment
|  | Freehold property | Furniture & equipment | Total
|  | £ | £ | £
| Cost or valuation |  |  |
| At 1 January 2024 | 5,282,336 | 747,256 | 6,029,592
| Additions | - | 57,261 | 57,261
| Disposals | - | (36,479) | (36,479)
| At 31 December 2024 | 5,282,336 | 768,038 | 6,050,374
| Additions | - | 43,543 | 43,543
| Disposals | - | (51,122) | (51,122)
| At 31 December 2025 | 5,282,336 | 760,459 | 6,042,795
|  | Freehold property | Furniture & equipment | Total
|  | £ | £ | £
| Accumulated depreciation and impairment |  |  |
| At 1 January 2024 | 719,591 | 644,133 | 1,363,724
| Charge owned for the year | 46,177 | 22,660 | 68,837
| Disposals | - | (32,554) | (32,554)
| At 31 December 2024 | 765,768 | 634,239 | 1,400,007
| Charge owned for the year | 46,177 | 34,441 | 80,618
| Disposals | - | (45,654) | (45,654)
| At 31 December 2025 | 811,945 | 623,026 | 1,434,971
| Net book value |  |  |
| At 1 January 2024 | 4,562,745 | 103,123 | 4,665,868
| At 31 December 2024 | 4,516,568 | 133,799 | 4,650,367
| At 31 December 2025 | 4,470,391 | 137,433 | 4,607,824
Page 24
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
14. | Leases
| (i) Leases as a lessee
| The Company leases motor vehicles for use by employees. As at 31 December 2025, the Company is committed to £999 (2024 - £10,666) in future lease payments, none of which relates to short-term leases. The Company's obligations are secured by the lessors' title to the leased asset which have a carrying value of £1,234 (2024 - £11,762). The carrying amount of the lease liabilities approximates the fair value. Additions to the right-of-use assets during the 2025 financial year were £nil (2024 - £nil).
| Lease liabilities are due as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Lease liabilities |  |
| Not later than one year | 999 | 9,060
| Between one year and five years | - | 1,606
|  | 999 | 10,666
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Right of use assets |  |
| Cost as at 1 January | 12,596 | 30,011
| Additions | - | -
| Disposals | (18,912) | -
| Depreciation charged to date | (4,225) | (17,415)
| Disposal depreciation | 12,083 | -
|  | 1,542 | 12,596
| The Company does not face a significant liquidity risk with regard to its lease liabilities and these are monitored as part of the overall process of managing cash flows which is described in the cash flow statement. The following amounts in respect of leases have been recognised in profit or loss:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Interest expense on lease liabilities | 570 | 1,339
| Expenses relating to leases | 9,333 | 9,060
|  | 9,903 | 10,399
Page 25
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
15. | Inventories
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Finished goods and goods for resale | 118,602 | 91,792
|  | 118,602 | 91,792
| Stock recognised in cost of sales during the year as an expense was £46,990,459 (2024 - £41,600,755).
16. | Trade and other receivables
|  | 2025 | 2024
|  | £ | £
| Trade receivables | 3,951,066 | 2,455,115
| Trade receivables - net | 3,951,066 | 2,455,115
| Prepayments and accrued income | 53,255 | 61,092
| Tax recoverable | 17,435 | -
| Other receivables | 291,330 | 242,907
| Total trade and other receivables | 4,313,086 | 2,759,114
The carrying value of trade and other receivables classified as loans and receivables approximates fair value. The Company does not hold any collateral as security. Allowances against doubtful debts are recognised against trade receivables based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty's current financial position. The company has not provided against amounts which are past due at the reporting date. The directors have considered the expected credit loss allowance and forward looking factors which would affect this, they deem any potential expected credit loss allowance to be immaterial. 99% of Spinney Sourcing Limited's debtors are intercompany, and the whole group operate within the retail industry with focus on the market in Dubai. This market has been consistently growing year on year and is expected to continue, therefore providing further support there is no future indication at 31st December 2025 to suggest poor debt recovery. Page 26
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
17. | Trade and other payables
|  | 2025 | 2024
|  | £ | £
| Trade payables | 6,034,573 | 4,727,399
| Accruals | 1,020,607 | 771,089
| Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost | 7,055,180 | 5,498,488
| Other payables - tax and social security payments | 33,399 | 72,521
| Total current trade and other payables | 7,088,579 | 5,571,009
| The carrying value of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.
18. | Loans and borrowings
|  | 2025 | 2024
|  | £ | £
| Non-current |  |
| Bank loans - secured | 1,032,600 | 1,195,644
| Lease liabilities | - | 1,606
|  | 1,032,600 | 1,197,250
| Current |  |
| Bank loans - secured | 163,044 | 163,044
| Lease liabilities | 999 | 8,156
|  | 164,043 | 171,200
| Total loans and borrowings | 1,196,643 | 1,368,450
| Included within bank loans are amounts due to HSBC Bank Plc totalling £1,195,644 (2024 - £1,358,688). The loan will be fully repaid in 2033 and interest is charged at 2% above the bank's Sterling base rate. The bank loans and overdrafts are secured by way of a first legal charge over the Company's land and buildings, an unlimited debenture incorporating a fixed charge over book debts and a floating charge over all other assets, and an unlimited composite Company guarantee given by Spinneys 1961 Holdings PLC, group Company, to secure all liabilities of Spinneys Sourcing Limited.
Page 27
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
19. | Financial instruments
Classification All financial assets have been classified as loans and receivables, and all financial liabilities have been classified as other financial liabilities measured at amortised cost. The carrying value of financial assets and financial liabilities measured at amortised cost approximates fair value. Financial risk management The Company’s operations expose it to a variety of financial risks that include the effect of changes in debt market prices, credit risk, liquidity risk and interest rate risk. The Company has in place a risk management programme that seeks to limit the adverse effects on financial performance of the Company by monitoring levels of debt finance and the related finance costs. The Company does not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting is required. Given the size of the Company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the Company’s finance department. The department has a policy and procedures manual that sets out specific guidelines to manage interest rate risk, credit risk and circumstances where it would be appropriate to use financial instruments to manage these. Foreign currency risk The company has little exposure to foreign currency risk as purchases and sales are predominantly transacted in UK sterling. Insignificant transactions in other currencies are not hedged in any way by the use of derivative contracts. If the company’s operations were to change such that trading in foreign currencies was to reach a significant level, then the directors would review the current policies in place. Interest rate risk The Company has both interest bearing assets and liabilities. Interest bearing assets include only cash balances which earn interest at a fixed rate. Interest bearing liabilities are charged at variable rates linked to the bank’s Sterling base rate. The Company has a policy of regularly reviewing the variable interest rate on borrowing to ensure the best rate possible is in place therefore giving greater certainty of future interest cash flows. The directors will revisit the appropriateness of this policy should the Company’s operations change in size or nature. I nterest rate sensitivity analysis The sensitivity analysis below has been determined based on the Company's exposure to interest rate movements for floating rate liabilities. The analysis is prepared assuming the amount of the liability outstanding at the balance sheet date was outstanding for the whole year. If interest rates had been 1% higher, and all other variables were held constant, the company’s profit for the year ended 31 December 2025 would decrease by £12,009 (2024: £13,838). Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk is limited to the carrying values of financial assets in the statement of financial position. Due from related parties Outstanding balances at the year-end arise in the normal course of business and are unsecured and interest free. Management does not expect any losses from non-performance by such related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. Page 28
SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 Financial instruments (continued) Bank balances and short-term deposits The maximum exposure to overall credit risk is the balance of cash and cash equivalents and trade and other receivables totaling £4,824,853 (2024: £3,225,458). Liquidity risk The Company actively maintains a mixture of long and short term debt finance that is designed to ensure the Company has sufficient available funds for operations and planned expansion. Price risk The Company is exposed to commodity price risk as a result of its operations principally in relation to oil prices and the effect that price fluctuations may have with particular relation to shipments by air. However, given the size of the Company’s operations, the cost of managing exposure to commodity risk exceeds any potential benefits. The directors will revisit the appropriateness of this policy should the Company’s operations change in size or in nature. The Company has no exposure to equity securities as it holds no listed or equity instruments. Price rate sensitivity analysis The majority of purchases are to fulfil sales contracts with group entities. The company has an agreement with group that all supplier price increases as a result of commodity fluctuations can be passed on to group through increased sales prices, so there is no significant exposure to price rate sensitivity. Capital risk management The company manages both debt and equity instruments. Debt instruments take the form of external bank borrowings and group borrowings which have fixed capital and interest repayment terms and are managed in accordance with the formal agreements. The company has issued ordinary equity share capital which is wholly owned by the parent entity. Dividends are paid when distributable reserves permit on the equity share capital following the appropriate procedures in compliance with UK Company law. There are no externally imposed capital requirements for the company and it is currently meeting its objectives for managing capital.
20. | Share capital
| Authorised |
|  | 2025 | 2025 | 2024 | 2024
|  | Number | £ | Number | £
| Shares treated as equity |  |  |  |
| Ordinary shares of £1.00 each | 30,000 | 30,000 | 30,000 | 30,000
|  | 30,000 | 30,000 | 30,000 | 30,000
| There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
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SPINNEYS SOURCING LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 20.Share capital (continued)
| Issued and fully paid |
|  | 2025 | 2025 | 2024 | 2024
|  | Number | £ | Number | £
| Ordinary shares of £1.00 each |  |  |  |
| At 1 January and 31 December | 30,000 | 30,000 | 30,000 | 30,000
21. | Reserves
Retained earnings This reserve records retained earnings and accumulated losses.
22. | Pensions
The Company operates a defined contribution scheme for certain employees. Contributions made into this scheme are paid by the Company at rates specified in the rules of the scheme. The assets are held separately from those of the Company in an independently administered fund. The amount recognised as an expense for the year amounted to £58,472 (2024 - £55,083).
23. | Related party transactions
Transactions and balances with other related parties Transactions and balances with other related parties are as follows: During the year, the Company made net sales of £50,949,906 (2024 - £45,388,930) to group companies of which £3,879,092 (2024 - £2,353,673) was outstanding at the year end date. The net sales take into account customer rebates offered by the Company as required by IFRS 15. Holding Company costs of £200,000 (2024 - £140,000) were incurred in respect of services provided by group companies.
24. | Ultimate controlling party
At 31 December 2025, Centurio Holding Limited was the immediate parent company. During the year, and as at the balance sheet date, the Company's ultimate parent company was Albwardy Investment LLC, and the ultimate controlling party was Ali Saeed Juma Albwardy. The smallest company for which the Company is included in consolidated financial statements is Spinneys 1961 Holding plc.
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