The directors present the strategic report for the year ended 25 February 2024.

Turnover was £256.6 million, down 53% on the prior year. As outlined in last year’s report, the loss of a major contract at the start of the financial year significantly reduced turnover,. The sudden nature of the contract loss resulted in severe disruption within the business and consequently major operational inefficiencies. After considering all options available to it the Board elected to sell the operating sites at Bridge of Allan and Queenslie. Glasgow, together with related fixed assets.

The main financial key performance indicators are noted below:

The group’s business activities and current position as well as information on its cash flows and net funds are set out within this annual report and the notes to the financial statements.

The directors regularly review non-financial indicators in particular reportable accidents per employee and environmental measures. The measures used vary by site and operation dependent on the particular activities involved. The group continues to develop its employees and adheres to appropriate legislation and policies.

Whilst the company’s working capital requirements can fluctuate over the course of a year, driven by seasonal factors, it manages its cash flow requirements closely. The directors monitor closely the group’s overall financing requirements on a daily basis.

The principal risks and uncertainties affecting the business include the following:

• Competition from alternative protein supply: market conditions for proteins can vary due to competitive forces such as sudden changes in market prices and supply conditions which can be driven by political and economic circumstances outside of the company’s control. To mitigate these risks, to mitigate this the company has continued to maintain historically strong relationships with farmer producers and other meat processors as well as developing its own calf rearing schemes., Membership of the JW Galloway Group gives access to a wider network of producers and additional procurement resource.

• Employees: The Company recognises the importance of its staff and its ability to attract people with relevant ability and skills, to mitigate the Company has internal training and learning initiatives in place.The ongoing welfare of the employees is paramount in any strategic decision making process the business makes.

• Skilled labour shortages has placed additional pressure on the existing workforce and on industry pay rates, the Company is working closely with local training bodies and labour providers to ensure adequate labour provision during seasonally busy periods.

• Sales: the UK retail food sector remains very competitive and price sensitive. The company continues to work closely with its customers to develop value added products and cost efficiencies to mitigate macro-economic driven cost inflation.

• Animal disease: the company faces a number of external risks which are outside its day to day control. The key identified risk is animal disease. The Company has developed contingency plans should this occur.

On 22 April 2025, the main trade and assets of Scotbeef Limited were sold to Creative Foods Europe Limited (OSI Group). Following the continuation of difficult trading conditions in Scotbeef Inverurie Limited, leading to further significant losses requiring Group financial support, and the negative outlook for the most significant input cost, the Board took the very difficult decision to cease production in June 2025, with operations in that business closing in September. The Group will continue to focus on developing it’s agricultural and export lamb interests, together with it’s European production unit.

The Board of J W Galloway Limited acknowledges its responsibility under section 172(1) of the Companies Act 2006 and set out the requirements of Section 172 below and key processes and considerations that demonstrate how the Directors discharge their duties and promote the success of the group and company.

The Board meet periodically and has relevant information available to it to fully understand the performance of the Company in respect of various matters including Health and Safety, Technical, HR, Operations, Commercial and Financial. Decisions made by the Directors are supported by detailed papers which enables decisions to be made that best support the Company, its employees and the wider stakeholder group. The following factors are taken into account:

The interests of the Company’s employees

The Directors consider the interests of employees, particularly safety, health and wellbeing, in all major decisions. The Company has continued to develop employee involvement in its performance, employees’ representatives are involved in regular meetings regarding matters of concern to them and the company, whilst encouraging suggestions regarding workplace improvements. The Company also engages with management throughout the business, in respect of the strategic direction of the business, in order to ensure short term decisions are in line with longer term strategy.. The ongoing welfare of the Company’s employees is paramount in any strategic business decision.

Sustainability

The Company is involved with Industry bodies who discuss with and encourage producers to embrace latest developments to continually improve product productivity and quality. We have increased our investment and grown the number of calf schemes in conjunction with business partners to promote the sustainability of the beef herd for the future.

Other business stakeholders

The Directors have identified the Company’s stakeholders and monitor communication and engagements with each group. Our Commercial team work closely with our customers and are focused on the importance of maintaining regular contact at all levels. In order to ensure we maintain the highest quality of product we work closely with suppliers to enhance and develop their processes and in return ensure prompt payment of all supplier invoices.. We also maintain regular communication with our bankers, as key stakeholders they are provided with financial performance data.

Impact of the Company’s operations on the environment.

Environmental responsibility is a key objective for the business, which it endeavors to improve through close collaboration with suppliers and customers. The Company looks to continually improve on the amount of landfill waste it produces by looking at new and innovative ways of recycling. The Company works closely with its utility providers to minimise its carbon footprint and is committed to working with industry bodies to ensure the balance of benefits from grassland fed beef cattle and their contribution to UK greenhouse emissions are accurately reported.

Maintenance of high standards of business conduct.

We supply household names within the retail and foodservice sectors, producing the highest quality products is critical to our success and is regularly assessed by our customer base and other retail bodies. Sourcing quality products from our suppliers, operating well invested factories and having skilled employees are key in this regard

On behalf of the board

The directors present their annual report and financial statements for the year ended 25 February 2024.

The principal activity of the group continued to be the production and sale of beef and lamb products.

The results for the year are set out on page 11.

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

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

Under the Articles of Association, none of the directors are required to retire by rotation.

The group made charitable donations of £8,948 (2023 - £3,429) to organisations near the various company sites during the period.

The group made no political donations or incurred any political expenditure during the period.

For the period under review, the group participated in a centralised treasury arrangement. The funds are managed on a group wide basis. No complex financial instruments are entered into.

Bearing in mind the constraints of the working environment arising in this industry, it is the group's policy to employ as many disabled persons as are capable of adequately fulfilling the requirements of any vacant jobs and to give preference to such persons when two or more candidates are otherwise of equal merit. In addition, the policy is that disabled persons shall be integrated with other employees as far as possible and whenever practical, there being no difference in their terms of employment, training, career development and promotion. When an employee becomes disabled, every effort is made to ensure continuity of employment.

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

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

The group has long standing relationships with a large network of Beef and Lamb producers, who provide the British livestock that the group processes. The internal livestock teams regularly visit farms and provide an exchange forum to provide information on customer and industry trends and work closely to embed latest technical and environmental developments into ongoing production practices.

In addition to the crucial supply of livestock, the group maintains other important supplier relationships with packaging, ingredients, transport, storage and engineering suppliers and has long standing trading relationships with many of these suppliers built on a principle of fair dealing and straight forward trading.

The group's commercial team works closely with its customers which include key retailers and food service companies and are focused on maintaining constant communication, including factory visits, to maintain the principles of ethical and transparent trading and ensure the latest industry , environmental production practices can be shared throughout the supply chain.

On 22 April 2025, the main trade and assets of Scotbeef Limited were sold to Creative Foods Europe Limited (OSI Group). Following the continuation of difficult trading conditions in Scotbeef Inverurie Limited, leading to further significant losses requiring Group financial support, and the negative outlook for the most significant input cost, the Board took the very difficult decision to cease production in June 2025, with operations in that business closing in September. The Group will continue to focus on developing it’s agricultural and export lamb interests, together with it’s European production unit.

We have reported on all sources of Green House Gas ("GHG") emissions and energy usage as required under The Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended.

The group recognises the importance of meeting globally recognised corporate responsiblity standards.

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2023 UK Government’s Conversion Factors for Company Reporting

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per tonne of product.

The chief source of GHG emissions relate to energy consumend in the operation of the business. We continue to minimise our environmental impact through increased usage of renewable energy suppliers, and investment in our facilities to improve operational efficiency and reduce electricity usage.

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 J W Galloway Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 25 February 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 25 February 2024 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 accounts and related notes. The company's loss for the year was £597,000 (2023 - £1,102,000 profit).

J W Galloway Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Munnieston Cottage, Thornhill, Stirling, Scotland, FK8 3QG.

The group consists of J W Galloway Limited and all of its subsidiaries.

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 £'000.

The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value. 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.

In the parent company financial statements, 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 consolidated group financial statements consist of the financial statements of the parent company J W Galloway Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 25 February 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

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

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

The company's business activities, together with the factors likely to affect its future development and position, are set out in the Strategic and Directors' Reports.

The group has gone through a period of reorganisation and rationalisation subsequent to the period end. In April 2025, the group sold the main trade and assets of Scotbeef Limited to Creative Foods Europe Limited (OSI Group). As such, all significant trading activities of that entity ceased subsequent to the period end.

Further to this, the group ceased all operations at Scotbeef Inverurie Limited in September 2025.

This conclusion of this period of restructuring, will see the group concentrate on the development of the Vivers Scotlamb business is its core focus, together with its agricultural and European production interests. Management will continue to ensure investment is available to drive growth and maximise operational efficiencies.

The group has prepared cash flow forecasts for that business and performed a going concern assessment which indicates that it will continue to trade profitability over the forecast period. Furthermore, the group has sufficient resources available to it to meet the obligations as they fall due for at least 12 months from the date of approval of these financial statements.

Accordingly, the financial statements have been prepared 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 on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

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 and assets in the course of construction are 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.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

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

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.

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.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

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.

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.

The valuation of stock is subject to the following estimates and judgements:

• Stock is valued based on the company's internal valuation model. The model incudes various judgements exercised by management including yields, indirect costs absorption and the poportion of costs applied to different cuts of meat.

• Livestock is valued at cost incurred which includes an estimate of weight gain x price per kg.

• Provisions are estimated based on age, best before dates and identified slow or obsolete stock.

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

Their aggregate remuneration comprised:

Of the total tax credit of £426,000, a charge of £264,000 relates to discontinued activities.

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

On 14 June 2023, the company entered into a sale agreement to sell the trade and assets relating to the company's Penston Road and Bridge of Allan sites to Anglo Beef Processors UK. A profit of £21.2m arose on the disposal, being the proceeds of sale, less the carrying amount of assets disposed and including any related costs of the sale.

Amounts due to the group at the balance sheet date in respect of the sale are included within Other debtors.

Group

Included within Land and property is freehold land with a value of £3,581,000 (2023 - £3,581,000).

Company

Included within Land and property is freehold land with a value of £1,732,000 (2023 - £1,732,000).

The fair value of the investment property has been arrived at on the basis of directors' valuation. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties. The directors consider that there has been no material movement in the value of investment properties.

Details of the company's subsidiaries at 25 February 2024 are as follows:

Registered office addresses (all UK unless otherwise indicated):

The company disposed of its 30% shareholding in Wooley Bros Wholesale Meat Limited during the period.

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

At the year end the group had an unrecognised deferred tax asset amounting to £5.5m (2023 - £nil) in respect of tax losses. No deferred tax asset has been recognised due to uncertainty as to when sufficient taxable profits will arise to offset those losses.

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.

Within the scope of the bank borrowing arrangements, JW Galloway Limited, Scotbeef Limited, Scotbeef Inverurie Limited, and Vivers Scotlamb Limited have each guaranteed to the bank the others’ obligations. There was £nil outstanding on behalf of the other group companies at 25 February 2024 (2023 - £nil).

In security of bank borrowings, fixed charges exist over the group's land and property and floating charges over the whole property and undertakings of the company and its subsidiaries.

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 22 April 2025, the group sold the main trade and assets of Scotbeef Limited to Creative Foods Europe Limited (OSI Group) for proceeds amounting to £14.75m excluding costs of the transaction. Following this, all significant trading activities in Scotbeef Limited ceased subsequent to the period end.

Following the continuation of difficult trading conditions in Scotbeef Inverurie Limited, leading to further significant losses requiring Group financial support, and the negative outlook for the most significant input cost, the Board took the very difficult decision to cease production in June 2025, with operations in that business closing in September 2025.

The remuneration of key management personnel is as follows.

Included in other debtors is an amount of £654,000 (2023 - £865,000) due from the trustees of the late IJ Galloway estate, which is a shareholder of the group. S455 tax of £212,000 (2023 - £212,000) is due back to them company upon repayment of the balance.

The group and company have taken advantage of the exemption within FRS 102 Section 33.1A from the requirements to diusclosure transactions with other wholly owned companies in the same group.

During the period the group entered into a share buy back in respect of the shares held by the non-controlling interest in Scotbeef Inverurie Limited.