The directors present the strategic report for the year ended 31 December 2025.

Associated Seafoods Limited is the parent company of Lossie Seafoods Limited, Moray Seafoods Limited, Loch Fyne Oysters Limited and Seasalter (Walney) Limited.

The group is renowned as one of Scotland’s leading artisan producers of quality Scottish smoked salmon and one of the leading producers of the highest quality Scottish shellfish, supplying to the wholesale and retail sectors for both UK and international customers.

The Group reported turnover of £109.5m for the year and an operating loss of £51,000, representing a significant improvement compared to the prior 14 month period operating loss of £3m, whilst EBITDA increased to £1.7m from a deficit of £1.1m in 2024. This reflects improved underlying trading performance, following a period of restructuring after the acquisition of the Loch Fyne Oyster businesses, and cost inflation across the sector.

The Group’s core salmon processing operations, primarily within the Lossie business, have continued to perform strongly. This has been supported by established relationships with key retail customers and ongoing product development and pricing initiatives, enabling the recovery of labour and raw material cost inflation.

The Loch Fyne Oysters businesses, acquired in 2023, remain in a turnaround phase. These businesses incurred losses during the year, reflecting ongoing operational and biological challenges. The directors anticipate that the group’s investment and the progression of commercial initiatives will support improved performance in the forthcoming years.

During the year, the Group has continued to focus on operational efficiency. These actions have contributed to improved margins and cash generation, with net cash inflow from operating activities of £2.7m (2024 - £0.1m outflow).

Furthermore, the Group’s financial position strengthened during the year, with net assets increasing to £8.0m (2024 - net assets of £3.9m), supported by the conversion of loan notes into equity through continued investor support.

Looking forward, the Board remains focused on:

• Delivering sustainable margin improvements through pricing and operational efficiency;

• Strengthening relationships with key customers and developing new commercial opportunities;

• Progressing the turnaround and scaling of the Loch Fyne Oysters businesses; and

• Maintaining disciplined cash and cost management.

The divisional results below show the split between the historic groups. The directors are of the opinion that analysis using financial KPIs, other than those below, is not necessary for an understanding of the development, performance and position of the business.

*Earnings before interest, tax, depreciation and amortisation

The Group’s operations require continued access to sufficient levels of funding. Our financial risk management objectives are to ensure sufficient working capital and cash flow for the group and to ensure there is sufficient support for its growth strategy. This is achieved through careful management of our cash resources, by loans from and the issue of equity to our investors and by obtaining invoice discounting and loan finance where necessary. No treasury transactions or derivatives are entered into.

The directors of the group believe that they have acted in the way they consider to be both in good faith and would be most likely to promote the success of the group for the benefit of its members as a whole. The duties of the directors are detailed in section 172 of the UK Companies Act 2006 which is summarised as follows:

A director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to:

• The likely consequences of any decisions in the long-term;

• The interests of the company’s employees;

• The need to foster the company’s business relationships with suppliers, customers and others;

• The impact of the company’s operations on the community and environment;

• The desirability of the company maintaining a reputation for high standards of business conduct; and

• The need to act fairly as between shareholders of the company.

The directors have a business plan which is based around achieving the group's business vision of being Scotlands leading producer of premium seafood operating in the UK and International markets.

Business conduct and relationships

We understand the importance of engaging with all our stakeholders and the directors regularly discuss issues concerning employees, clients, suppliers, community and environment, health and safety and shareholders which inform our decision-making processes. The directors are aware that their strategic decisions can have long term implications for the business and its stakeholders, and these implications are carefully assessed.

We aim to build positive working relationships and partnerships with customers, employees and throughout our supply chain. We work hard to develop and maintain these relationships as they are central to our sustainable business ethos. Our aim is to build strong stable long-term working relationships with them and to be fair and transparent in all our dealings.

We believe the core strength of the group is its people and we are committed to being a responsible business and employer. The group aims to recruit, develop, motivate and retain the best talent. For the business to succeed we need to engage and enable our people to perform at their best, develop their skills and capabilities, while ensuring we operate as efficiently and productively as possible.

Education & training, particularly young people, remain of key importance to the group and continued investment in this area is planned, helping to meet the industry wide skills shortage issue over the coming years.

We take active steps to ensure that the views and interests of our people are captured and considered in our decision-making. Equally, we ensure employees are kept up to date with information regularly as regards to the group's strategy and performance.

The group's environmental commitment is to adopt and promote industry standards and best practices, enhancing awareness of environmental responsibilities and a reduction in harmful emissions.

The group continues to be actively involved and supportive of its local communities. We support our people who regularly engage in volunteering and charitable activities at a local level and we actively promote and recognise their achievements throughout the organisation.

The directors are committed to openly engaging with our shareholders and investors, as we recognise the importance of transparency and a continuing effective dialogue. It is important to us that all stakeholders understand our strategy and objectives, and the group is committed to considering properly their questions, issues or feedback received.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

The principal activity of the group was that of the production, wholesale and retail distribution of seafood.

The results for the year are set out on page 12.

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

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

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

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

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

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

On 12 February 2026, the group issued £2m of new discounted loan notes to Scottish Seafood Investments Limited with a maturity date of 31 August 2026.

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

Associated Seafoods Limited has prepared the Streamlined Energy and Carbon Reporting (SECR) disclosures internally. The calculations have been completed in accordance with the HM Government Environmental Reporting Guidelines (2019) and the UK Government Greenhouse Gas Conversion Factors for Company Reporting.

The UK Government GHG Conversion Factors for Company Reporting (2024 and 2025) were used to calculate greenhouse gas emissions expressed as tonnes CO₂e.

Electricity and heat supplied from the on-site combined heat and power (CHP) plants are generated by a third-party operator. Total direct emissions from the CHP systems were calculated based on natural gas consumption and the relevant UK Government Greenhouse Gas Conversion factors. Emissions were then allocated between electricity and heat outputs using the Greenhouse Gas Protocol’s efficiency-based allocation methodology based on the useful electricity and thermal energy outputs generated by the CHP systems.

The chosen intensity measurement ratio is turnover (£M).

Associated Seafoods Limited continue to strive for energy and carbon reduction arising from their activities. In previous reporting years, Associated Seafoods Limited engaged a consultant to undertake energy and carbon reduction surveys across their estate. These identified a number of energy opportunities that fall within payback criteria set by the company. Associated Seafoods Limited will endeavour to systematically work through these opportunities in subsequent reporting years.

Emissions from company vehicles decreased during the reporting period as a result of the gradual transition of parts of the company vehicle fleet towards electric vehicles, reducing the consumption of petrol and diesel.

Fugitive emissions from refrigerants decreased significantly compared with the previous reporting period following investment in refrigeration equipment. While some refrigerant losses occurred towards the end of the reporting period, ongoing improvements in refrigerant management continue to be a focus for the company.

Emissions associated with purchased electricity decreased despite an increase in electricity consumption. This reduction reflects the continued decarbonisation of the UK electricity grid.

Associated Seafoods Limited has assessed all relevant sources of energy consumption and greenhouse gas emissions in accordance with SECR requirements. No material sources have been excluded from this report, and the company considers the disclosures to represent a fair and complete account of its energy use and associated emissions for the reporting period.

In the prior year, Associated Seafoods Limited changed its financial year to 31 December. For the purposes of SECR reporting, Associated Seafoods Limited has chosen to align SECR reporting with the new reporting period (1st January–31st December) going forward.

Prior year data included within this report has been restated to reflect improved data availability and refinements to the calculation methodology.

• In previous reports, “Business Travel - Grey Fleet Mileage” emissions were estimated using fuel property assumptions. For the current reporting period, emissions and associated energy consumption have been calculated using the Business Travel emission factors and SECR kWh conversion factors provided within the UK Government GHG Conversion Factors for Company Reporting.

• For the reporting period, the methodology used to calculate emissions associated with electricity and heat supplied from the on-site CHP systems was reviewed and updated. The revised approach allocates the direct emissions of the CHP systems between electricity and heat outputs based on the useful energy outputs and assumed generation efficiencies. This change reflects a more accurate representation of the emissions associated with the energy supplied to Associated Seafoods Limited.

These changes ensure that the emissions disclosures are calculated on a consistent basis across reporting periods and improve the accuracy of the reported figures.

The restatement does not reflect a change in operational activity but instead results from improved data completeness and methodological updates.

Fugitive emissions associated with refrigerant losses were calculated using product-specific emission factors sourced for the refrigerants in use, including R134A, R448A, R449A, and R452A

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

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Associated Seafoods Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2025 and of the group's loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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

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

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

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

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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

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

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

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

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

• Reviewing minutes of meetings of those charged with governance;

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

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

• Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias. 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £320,583 (2024 - £371,363 loss).

Associated Seafoods Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Capital Square, 58 Morrison Street, Edinburgh, EH3 8BP.

The group consists of Associated Seafoods Limited and all of its subsidiaries.

The company operates a 52/53 week accounting period. The financial statements for 2025 are prepared from 4 January 2025 to 2 January 2026. The prior period financial statements are presented for the period from 29 October 2023 to 3 January 2025 due to the extension of the company's reporting period. As such, comparative amounts presented in the Profit and loss account may not be entirely comparable.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

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

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

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

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

The consolidated financial statements incorporate those of Associated Seafoods Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).

All financial statements are made up to the same reference date. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Merger method

On 1 March 2023, Associated Seafoods Limited acquired the entire share capital of the Loch Fyne Oysters Limited Group from its parent entity, Scottish Seafoods Investments Limited, via share for share exchange.

The company chose to apply the principles of merger accounting to this business combination as the ultimate controlling party and relative rights of equity holders remained the same both before and after the combination, no non-controlling interests were altered by the combination, and the adoption of merger method accords with generally accepted accounting principles.

Under merger accounting, the assets and liabilities of the business combination were not adjusted to fair value on consolidation. Instead, the results and cash flows of the combining entities were brought into the accounts from the beginning of the financial year in which the combination occurred. Comparatives were restated to combine the results of the entities for the previous period. The difference between the value of the share for share exchange and the nominal value, and share premium on the shares received in exchange was shown as a movement to the merger reserve within equity. The merger reserve was further adjusted to remove the pre acquisition trading from before the companies were under the control of the ultimate parent entity.

Purchase method

In respect of all other business combinations, subsidiaries are consolidated using the purchase method and their results are incorporated from the date that control passes.

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination.

The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The Directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. In adopting this basis, the Directors have considered the Group’s trading performance, financial position, cash flow forecasts, funding arrangements and the principal risks and uncertainties facing the business for a period of at least 12 months from the date of approval of the financial statements.

The Group has demonstrated resilient underlying performance during the year, with Revenue and EBITDA ahead of the comparative 12 month period. This has continued post year end, with strong core trading supported by a collaborative commercial relationship with its key customers, together with the successful recovery of labour and raw material cost inflation through pricing initiatives.

Nevertheless, inflationary and cost pressures persist, and the Group continues to manage these challenges by pursuing additional sales opportunities and operational efficiencies, while maintaining tight control over costs, working capital and cash flow to ensure adequate financial resources.

The Group’s liquidity position is supported by a combination of committed banking facilities, investor funding and seasonal customer support arrangements. In January 2025, its parent entity converted £4.5m of loan notes into equity instruments, strengthening the balance sheet and reducing finance costs, and in September 2025 renewed its remaining expiring facilities until 2027.

Further to this, the group has also obtained assurances that its parent will continue to facilitate such financial support as necessary for the development and growth of the group to meet the long-term objectives of its investors including the rollover of existing facilities and any short-term liquidity requirements. In assessing this support, the Directors have also considered its parent’s track record and financial capacity. This is further evidenced by the issue of a further £2m of loan notes in February 2026. The directors have satisfied themselves as to the validity of these assurances and that its investors have the means and authority to provide such funding if it is required.

Notwithstanding the risks and dependencies outlined above, the Directors consider that the Group’s strong underlying trading performance, access to committed funding facilities, and continued support from its investors provide sufficient assurance that the Group will be able to meet its liabilities as they fall due for the foreseeable future. Accordingly, the Directors have concluded that it is appropriate to prepare the financial statements on a going concern basis.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually when the goods are shipped and title has passed), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.

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

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

Where the fair value of the net assets acquired exceeds the level of consideration, negative goodwill is recognised. Negative goodwill is presented immediately below any positive goodwill and a sub-total of net goodwill provided on the statement of financial position.

Negative goodwill, up to the fair value of non-monetary assets acquired, is recognised in the profit or loss in the periods in which the non-monetary assets are recovered. Any excess exceeding the fair value of non-monetary assets acquired is recognised in profit or loss in the periods expected to be benefited.

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

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

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Intangible assets comprise of trade marks and licenses. Trademarks are defined as having finite useful lives and the costs are amortised on a straight line basis over their estimated useful lives. Licenses are amortised over the length of the lease term. Intangible assets are stated at cost less amortisation and are reviewed for impairment whenever there is an indication that the carrying value may be impaired.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land is not depreciated.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Investments in subsidiaries and associates are all held at cost in the separate financial statements of the company.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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

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

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

Stocks include biological assets, raw materials and finished goods.

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

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

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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

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

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

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

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

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

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

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

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

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Exceptional items

Exceptional items are those items of such incidence or quantum that they should be presented separately in the profit and loss account to allow for a proper understanding of the company's performance.

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following judgements and estimates have had the most significant effect on amounts recognised in the financial statements.

During the year the company issued 17,530 Convertible loan notes 2030 with a principal value of £6.6m in settlement of £4.5m of Zero Coupon Loan Notes 2025. The Directors have exercised judgement in determining that the instruments issued during the period meets the definition of an equity instrument in accordance with Section 22 of FRS 102.

This judgement involved an assessment of the contractual terms and conditions of the instrument, including whether the company has any obligation to transfer cash or other financial assets to the holder. Based on this assessment, the Directors concluded that the issued instruments represent a residual interest in the assets of the company and should therefore be classified as equity rather than a financial liability.

The classification of the instrument has a direct impact on the presentation of the balance sheet. If the instruments issued had not been classified as equity, the group’s net assets would have been reduced by the value of the loan notes issued.

The new instruments were issued as part of a transaction between entities under common control. FRS 102 does not contain prescriptive guidance for the accounting treatment of all common control transactions, and therefore the Directors have exercised judgement in determining the appropriate valuation basis.

In assessing the valuation of the equity instruments on initial recognition, the Directors concluded that the fair value of the consideration received is most appropriately reflected by reference to the carrying value of the liabilities eliminated, rather than a market‑based valuation. This approach is consistent with the substance of a common control transaction, in which there is no change in the ultimate economic ownership, and avoids the recognition of artificial gains or losses.

At the end of each financial year an assessment is made on whether there are indicators that the company's investments are impaired. Where necessary the company's assessment is based on an estimation of the recoverable amount of each asset. This is based on expected future cash flows which includes certain assumptions and judgements over future operating results, discount rates and growth rates.

The calculation of a deferred tax asset requires management to make judgements and estimates in respect of the extent to which it is probable that future taxable profit will be available to offset unused tax losses or other credits. The group estimates the most probable amount of future taxable profits using assumptions consistent with those in impairment calculations. The company has concluded using business projections for the next 5 years. Any remaining losses remain unrecognised. The losses can be carried forward indefinitely and have no expiry date.

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of biological assets 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.

In the prior period, the group incurred exceptional costs relating to the restructure and re-organistion of the smokery operations in the group's subsidiary, Loch Fyne Oysters Limited, which relocated to Buckie during that period.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2024 - 1).

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

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

Included in the cost of land and buildings is freehold land of £155,000 (2024 - £155,000) which is not depreciated.

The carrying value of freehold land and buildings has been pledged as security over certain liabilities of the group.

Details of the company's subsidiaries at 31 December 2025 are as follows:

Registered office addresses (all UK unless otherwise indicated):

£5.4m of Trade debtors are subject to invoice finance arrangements (2024 - £6.7m).

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

Net obligations under finance leases are secured over the assets to which they relate.

Bank loans are secured by bond and floating charge, standard security and unlimited guarantee across group companies. These are subject to interest at 2.5% and 3.32% over base and are due for repayment between a period over 5 and 10 years.

All balances due in respect of invoice finance facilities are included within bank overdrafts and secured over the related debts and a floating charge over other assets.

Included within Other loans is £3.7m of interest free customer loans due for repayment on demand (2024 - £3.4m). Related party loans are also included within Other loans. Further details can be found within the Related party transactions note to these financial statements.

Ranking in respect of all secured debt is dependent on asset category.

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

Deferred tax is not recognised in respect of tax losses due to uncertainty over when they will be recovered against the reversal of deferred tax liabilities or future taxable profits. This is an unrecognised deferred tax asset of £3.1m (2024 - £3.6m).

Previously unrecognised tax losses of £0.9m were recognised during the year as it is now considered probable that the group will be able to utilise those losses.

The group has deferred government grant income in relation to grants from the Scottish Government for investment in salmon processing infrastructure and equipment. The Scottish Government has the right to repayment of the grant in whole or in part if the company defaults on any conditions of the grant or if it disposes of any equipment or buildings funded by grant funds without the written consent of the Scottish Government for a period of five years from the date of acquisition or development of the asset.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Ordinary 'A', Ordinary 'B' and Ordinary 'D' shares are non redeemable and are entitled to one vote per share and equal rights on distribution or dividend.

The Ordinary 'C' shares carry no voting rights, are redeemable only at the option of the company, and carry equal rights with other classes of ordinary shares to participate in a distribution or dividend.

On 12 January 2025, the company issued 17,530 Convertible loan notes 2030 with a principal value of £6.6m in settlement of £4.5m of Zero Coupon Loan Notes 2025.

The new loan notes are classified as an equity instrument as these are non interest bearing, redeemable only at the company's discretion and are mandatorily convertible to shares on a 1:1 ratio if these are not redeemed.

Further information can be found in Note 2 to the financial statements.

The merger reserve was created upon the acquisition of the Loch Fyne Oysters Limited Group and represents the difference between the value of the share for share exchange and the nominal value, and share premium on the shares received in exchange, adjusted to remove pre acquisition trading from before the companies were under the control of the ultimate parent entity.

Operating lease payments represent rentals payable by the group for certain plant & equipment and motor vehicles.

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

On 12 February 2026, the group issued £2m of new discounted loan notes to Scottish Seafood Investments Limited with a maturity date of 31 August 2026.

The remuneration of key management personnel is as follows.

Key management personnel are considered to be the directors of the company's subsidiary entities.

During the year the group entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

Amounts owed to Entities with control, joint control or significant influence relate to the Group's facilities with its parent, Scottish Seafood Investments Limited and fellow shareholders, Farm Originals Limited.

A summary of facilties at the period end is shown below:

The balances due to Scottish Seafood Investments Limited are subject to guarantee from Farm Originals Limited.

The company's parent is Scottish Seafood Investments Limited, an investment company registered in British Virgin Islands under registration number 2019384. Its registered office is 3rd Floor, Yamraj Building, Market Square, PO Box 3175, Road Town, Tortola, British Virgin Islands.

The ultimate parent undertaking of Scottish Seafood Investments Limited is Northern Link Limited, an investment company registered in British Virgin Islands under registration number 580292. Its registered office is 3rd Floor, Yamraj Building, Market Square, PO Box 3175, Road Town, Tortola, British Virgin Islands.

Associated Seafoods Limited is the smallest and largest group into which the entity is consolidated. Copies of the group accounts can be obtained publicly from Companies House.