The Directors of A & J Scott Limited present their Strategic Report for the period from 1 April 2025 to 31 March 2026 in accordance with the requirements of the Companies Act 2006.

The principal activitiy of the group continues to be sawmilling and timber merchandising.

The Directors are pleased to report a strong year of trading for the financial period ended 31 March 2026.

Profit before taxation increased to £4,737,038 (2025: £3,287,991), reflecting continued growth in both revenue and operational performance. Turnover for the year increased to £41,170,775 (2025: £38,873,775), demonstrating sustained demand and the benefits of previous investment in capacity and efficiency.

Gross profit increased to £10,234,676, with profit after taxation of £3,555,214.

The Directors consider the performance for the year to be satisfactory. Net assets increased from £34,700,395 to £37,314,954, further strengthening the Group's financial position and providing a solid platform for continued investment.

The business remains well positioned and broadly on track to achieve its forecast turnover of approximately £40 million for the 2026/27 financial year.

Key Performance Indicators

The following key performance indicators relate to A & J Scott Limited. East Roddam Estate Limited remains in its start-up phase and KPIs have not yet been formally established.

KPI            Units        2026        2025

Gross profit margin    %        24.98        25.27

Operating profit margin    %        11.80        8.22

EBITDA            £m        7.79        6.05

Inventory turnover days    Days        49.20        54.40

The improvement in operating margin and EBITDA reflects ongoing focus on operational efficiency, cost control and investment in production capability.

Investment and Capital Development

The group continues to make significant progress on its major capital investment programme centred on the construction of a new sawmill facility (Mill 10).

Contracts for the supply of the sawmill plant and machinery were entered into in January 2025. This investment is expected to increase production capacity by approximately 40% and represents a key step in the group's long-term growth strategy.

The new facility will incorporate a fully integrated system, including log infeed, high-performance sawing, automated edging, crosscutting, stacking and advanced product sorting. A comprehensive co-product handling system will further enhance operational efficiency, recovery rates and sustainability.

Construction of the building is nearing completion and installation of machinery is underway. The project continues to progress in line with expectations, with full installation anticipated by early 2027 and commissioning scheduled for the first quarter of 2027.

The group finances its operations primarily through retained earnings, supplemented by asset finance where appropriate.

The Directors maintain a disciplined approach to working capital management, with ongoing focus on controlling trade receivables, payables and cash balances to ensure the group meets its obligations as they fall due.

Funding for the new sawmill project has been structured to align with the underlying asset base. A pre-inception loan facility has been secured to support plant and machinery acquisition, which will convert to an asset finance facility upon transfer of title, expected in October 2026. This approach is intended to support liquidity during the construction phase while providing longer-term financing aligned to the asset life.

In December 2025, the group entered into an invoice finance facility as part of its strategy to optimise working capital. This facility enables the accelerated realisation of cash from trade receivables, improving the cash conversion cycle and reducing reliance on traditional working capital facilities. It enhances liquidity and provides additional flexibility to support ongoing trading and increased activity as capacity expands.

The group continues to manage exposure to interest rate movements and maintains credit insurance to mitigate the risk of customer default.

Operational performance is closely monitored through a range of financial and non-financial indicators, with particular focus on manufacturing efficiency and cost control.

The Directors remain focused on maintaining strong, sustainable trading performance and long-term profitability through continued reinvestment in the business.

Health and safety

Health and safety remains a core priority for the group.

Ongoing investment in equipment, systems and training supports the group's objective of maintaining safe working conditions and preventing work-related injury and ill health. Risk assessments are regularly reviewed and updated, and safety is actively promoted at all levels of the organisation.

The group is committed to supporting both the physical safety and mental wellbeing of its employees, with appropriate training, awareness and support programmes in place.

Environmental Matters

Environmental responsibility is integral to the group's operations.

All timber is sourced from responsibly managed UK forests operating sustainable replanting and harvesting programmes, with appropriate certification maintained.

The group holds an environmental permit issued under the Environmental Permitting (England and Wales) Regulations 2016 (as amended) in respect of its timber treatment activities.

Since entering into a Climate Change Agreement in 2014, the group has performed ahead of its targets and continues to monitor and improve energy performance.

The group has further strengthened its environmental and sustainability approach through the development of an Environmental, Social and Governance (ESG) strategy aligned with the United Nations Sustainable Development Goals. This supports a structured and measurable approach to minimising environmental impact, improving efficiency and delivering long-term sustainable value.

The group has a strong track record of reinvesting in the business to support efficiency, capacity and long-term competitiveness.

Recent investments include:

•    Installation of a high-capacity log sorting line, doubling grading capability.

•    Upgrading of a primary sawmill, improving recovery and processing efficiency.

•    Installation of ground-mounted and roof-mounted solar panels, commissioned in November 2023, reducing     reliance on grid electricity and mitigating energy costs.

These investments, together with the ongoing Mill 10 project, position the group to meet increasing demand and further strengthen its position within the UK sawmilling sector.

The Directors remain confident in the Group's strategic direction and future development.

In discharging their duties, the Directors have acted in good faith and in a manner they consider most likely to promote the success of the group for the benefit of its members as a whole, having regard to the matters set out in section 172(1) of the Companies Act 2006, in the year ended 31 March 2026.

The group communicates regularly with employees through a range of channels including workplace forums, briefings and internal communications.

An open and supportive working environment is encouraged, with employees able to raise matters through line management or the HR function. The group also provides access to trained mental health support and an Employee Assistance Programme to support employee wellbeing.

Strong and long-standing relationships with customers and suppliers remain central to the ongoing success of the business.

A high proportion of revenue is generated from repeat business, reflecting the quality of both product and service. Close engagement with customers enables the group to respond to market trends and demand requirements effectively.

The group works collaboratively with suppliers to ensure continuity of supply, maintain high standards and support responsible sourcing and sustainability practices. This approach helps reduce operational risk and supports long-term value creation.

By order of the board

The directors present their annual report and financial statements for the year ended 31 March 2026.

The results for the year are set out on page 14.

Ordinary dividends were paid amounting to £940,625. 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:

The group's principal financial instruments comprise cash, short-term deposits, invoice finance facilities, hire purchase agreements, finance lease obligations and asset finance facilities. Other financial assets and liabilities, including trade receivables and trade payables, arise directly from the group's operations.

The group's financial risk management objectives are to maintain adequate liquidity, manage exposure to market risks and ensure sufficient financial resources are available to support its operational and strategic objectives.

Liquidity risk is the risk that the group may be unable to meet its financial obligations as they fall due.

The group actively manages cash flow through careful monitoring of working capital, including trade receivables, trade payables and cash balances.

In December 2025, the group entered into an invoice finance facility to support working capital requirements and enhance liquidity as the business progresses its major capital investment programme. The facility provides additional flexibility by accelerating the realisation of cash from trade receivables.

The group has also secured project-specific funding to support the acquisition and installation of the new sawmill plant and machinery. This facility is expected to convert to an asset finance arrangement upon transfer of title of the equipment.

The Directors consider the group's cash resources and available facilities to be sufficient to manage liquidity risk appropriately.

Foreign exchange risk arises from fluctuations in exchange rates associated with the purchase of imported goods and services.

The group manages this exposure through regular monitoring of exchange rate movements and, where appropriate, the use of forward currency purchase arrangements. The Directors do not consider the group to be materially exposed to foreign exchange risk.

Credit risk represents the potential financial loss arising from a customer's failure to meet contractual obligations.

The group operates established credit control procedures and undertakes creditworthiness assessments before entering into trading arrangements. In addition, credit insurance is maintained to mitigate exposure to customer default. The Directors do not consider the group's exposure to credit risk to be significant.

Price risk arises from fluctuations in the cost of raw materials, energy and other operating inputs. The group monitors market conditions closely and seeks to manage exposure through effective purchasing strategies, supplier relationships and operational efficiency. Whilst geopolitical uncertainty and ongoing conflicts have contributed to volatility in certain commodity and energy markets, the Directors believe the group remains well positioned to manage such fluctuations and do not consider the group's overall exposure to price risk to be material.

The group continues to invest in measures designed to improve energy efficiency and reduce exposure to energy price volatility. This includes the installation of ground-mounted and roof-mounted solar generation systems and investment in battery energy storage technology. These initiatives are expected to support the group's long-term energy strategy and provide greater resilience against future electricity price fluctuations, particularly as production capacity increases.

The group continues to invest in research and development activities focused on improving production efficiency, product recovery, operational performance and manufacturing throughput.

These initiatives support the group's objective of maintaining its competitiveness and strengthening its position within the UK timber industry.

The group finances its day-to-day working capital requirements through cash generated from operations together with available financing facilities.

The Directors have reviewed forecasts and cash flow projections covering a period of at least twelve months from the date of approval of these financial statements. These forecasts indicate that the group will continue to operate within its available facilities and maintain adequate liquidity under a range of reasonably foreseeable scenarios.

At 31 March 2026, the group had cash resources and access to a range of funding facilities, including invoice finance, asset finance and project-specific funding arrangements, to support working capital requirements and its ongoing capital investment programme.

Having considered the group's forecasts, available facilities and current financial position, the Directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on the going concern basis.

The group continues to evaluate developments in sawmilling technology and their potential application within its operations.

Significant progress has been made on the construction of the new Mill 10 sawmill facility. The project remains on schedule, with commissioning expected during the first quarter of 2027. Upon commissioning, the facility is expected to increase production capacity by approximately 40% and further enhance operational efficiency and product recovery.

The Directors remain committed to investing in modern, efficient production facilities and believe the group is well positioned to support future growth opportunities.

In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the group will be put at a General Meeting.

The group has considered the recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD) when preparing this report and remains committed to transparent reporting of climate-related risks, opportunities and performance.

Governance

The Board recognises the importance of environmental sustainability and climate-related matters to the long-term success of the business. Environmental performance is monitored regularly and forms part of the group's wider Environmental, Social and Governance (ESG) strategy.

The group reports its energy consumption and greenhouse gas emissions in accordance with the Streamlined Energy and Carbon Reporting (SECR) framework.

Management’s role in assessing and managing climate related risks and opportunities

The group continues to assess climate-related risks and opportunities through investment in modern, energy-efficient technologies and processes.

Wherever practical, new developments and replacement equipment incorporate improved environmental performance and reduced energy consumption. Ongoing monitoring of energy usage enables management to identify opportunities for further efficiency improvements.

Strategy

The group's strategy is focused on investing responsibly to support the long-term sustainability of the business while reducing its environmental impact.

Environmental considerations are embedded within decision-making processes and investment planning. The Group recognises the importance of balancing commercial success with responsible stewardship of natural resources and continues to develop initiatives that support a lower-carbon future.

Sustainability

The group continues to make progress in reducing its environmental impact and improving operational efficiency.

During the year, total carbon emissions reduced from 1,352.14 tCO₂e to 1,317.13 tCO₂e despite increased production output. The carbon intensity of production reduced from 9.63 tonnes of CO₂e per 1,000m³ of output to 8.49 tonnes of CO₂e per 1,000m³.

The group's investment in ground-mounted and roof-mounted solar installations continues to contribute towards reducing grid electricity consumption and mitigating exposure to energy price volatility. In addition, a Battery Energy Storage System with a capacity of 4.5MW is expected to further strengthen energy efficiency and maximise the utilisation of renewable power generation.

The group continues to exceed the targets set under its Climate Change Agreement and has implemented a comprehensive ESG strategy aligned to the United Nations Sustainable Development Goals. One of the principal objectives of this strategy is to reduce greenhouse gas emissions by 50% by 2030 and achieve net zero emissions before 2050.

Metrics and Targets

The group has adopted an operational control approach in line with the Streamlined Energy and Carbon Reporting (SECR) framework. Energy consumption and associated greenhouse gas emissions have been calculated using the following data sources:

•    Purchased electricity – based on metered electricity consumption (kWh)

•    Diesel (DERV) – based on fuel purchase records (litres)

•    Liquefied Petroleum Gas (LPG) – based on supplier purchase records (litres)

Scope 1 (Direct Emissions)

Scope 1 emissions arise from fuels combusted in assets owned or controlled by the Group. For the year ended 31 March 2026, these include:

•    Diesel fuel (DERV) consumption (litres)

•    LPG used for heating and operational purposes (litres)

Scope 2 (Indirect Energy Emissions)

Scope 2 emissions arise from the generation of purchased electricity consumed by the Group. For the year ended 31 March 2026, these include:

•    Purchased electricity consumption (kWh)

Scope 3 (Other Indirect Emissions)

The group has considered Scope 3 emission categories and, based on its assessment of materiality and data availability, has determined that emissions from business travel in employee-owned vehicles are not material. Accordingly, Scope 3 emissions have not been included in this disclosure.

Conversion Factors:

Consumption:

Emissions:

Intensity ratio:

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 Group 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 A. & J. Scott Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2026 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, 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 March 2026 and of the group's profit 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.

We identified the following applicable laws and regulations as those most likely to have a material impact on the financial statements: Health and Safety; employment law (including the Working Time Directive); and compliance with the UK Companies Act.

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; 

• 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 profit for the year was £3,801,792 (2025 - £2,781,394 profit).

A. & J. Scott Limited (“the company”) is a private limited company, limited by shares, domiciled and incorporated in England and Wales. The registered office is Station Sawmills, Wooperton, Alnwick, Northumberland, NE66 4XW.

The group consists of A. & J. Scott 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 £.

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.

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 A. & J. Scott 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 31 March 2026. 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.

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The group meets its day to day working capital requirements through cash generated from operations.

The group’s forecasts and projections for the next twelve months show that it should be able to continue in operational existence for that period and operate within the facilities currently available to it, taking into account reasonable possible changes in trading performance. At the year end the financial statements the group showed significant cash balances.

Having considered the current cash forecasts of the group, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for a period of a least twelve months from the date of signing these financial statements.

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

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:

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 income statement.

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.

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 statement of financial position 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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

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

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 income statement 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 income statement, 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.

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 statement of financial position 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.

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.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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

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

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock is valued under standard costing. The cost of finished goods and goods for resale is calculated per M3 of output and comprises direct materials, direct labour costs and those overheads that have been incurred in production.

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 3 (2025 - 3).

The actual charge for the year can be reconciled to the expected charge 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.

Investment property comprises of 5 properties. The fair value of 4 of the investment property has been arrived at on the basis of a valuation carried out at 16 January 2023 by Aitchinsons Chartered Surveyors, who are not connected with the company. The remaining property was revalued on 06 June 2025 by the same company. The valuations were made on an open market value basis by reference to market evidence of transaction prices for similar properties.

Details of the company's subsidiaries at 31 March 2026 are as follows:

For the year ending 31 March 2026, the following subsidiaries were entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies:

East Roddam Estate Limited (company registration number 14460948)

The long-term loans are secured by fixed charges over the property they relate to.

A. & J. Scott Limited has a long term loan with The Directors Retirement Benefit Scheme over a 3 year period incurring an interest rate of 8% for a principal amount of £160,000. The balance at the year end is £66,791.

A. & J. Scott Limited has a long term loan with The Directors Retirement Benefit Scheme over a 5 year period incurring an interest rate of 8% for a principal amount of £175,000. The balance at the year end is £113,677.

A. & J. Scott Limited has a long term loan with The Directors Retirement Benefit Scheme over a 5 year period incurring an interest rate of 8% for a principal amount of £185,000. The balance at the year end is £120,049.

A. & J. Scott Limited has a short term loan with Lombard North Cenral PLC for preinception funding over a 1 year period incurring interest on a monthly basis at a variable rate for a principal amount of £1,500,000. The balance at the year end is £1,500,000.

A. & J. Scott Limited has a loan with R Scott Properties over a 4 year period incurring an interest rate of 6% for the principal amount of £665,000. The balance at the year end is £155,757.

East Roddam Estate Limited had a long term loan with Barclays Bank Plc over a 5 year period incurring an interest rate of 5.87% for a principal amount of £1,955,000. The balance at the year end is £nil (2025 - £1,920,253).

East Roddam Estate Limited had a long term loan with Barclays Bank Plc over a 5 year period incurring a variable interest rate of base rate +1.58% for a principal amount of £1,955,000. The balance at the year end is £nil (2025 - £1,922,629).

Finance lease payments represent rentals payable by the company or 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.

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

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

Included in the statement of financial position are unpaid pension contributions of £20,633 (2025 - £17,902).

During the year 1,072 ordinary shares were transferred to C ordinary shares, at nominal value of £1 per share. In all other respects, all shares shall rank pari passu as if they constitute one class of shares.

Revaluation reserves represent the surplus obtained from revaluations of investment property.

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:

The operating leases represent leases of farm cottages to third parties. The leases are negotiated over terms of 1-5 years and rentals are fixed for 1-5 years. All leases include a provision for five-yearly upward rent reviews according to prevailing market conditions. There are no options in place for either party to extend the lease terms.

At the reporting end date the group had contracted with tenants for the following minimum lease payments:

Amounts contracted for but not provided in the financial statements:

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

During the year, the company received a loan from a director of the company. The loan is unsecured with interest payable at the market rate and is repayable on demand. At the year end, the balance outstanding was £303,618 (2025 - £nil).

A & J Scott Limited Directors Retirement Benefit Scheme is a related party by virtue of common directors. During the period £45,284 (2025 - £44,050) of rent was charged. At the period end the balance was £nil (2025 - £nil).

In addition, A & J Scott Limited Directors Retirement Benefit Scheme have provided loans to the company which have interest charged at market rates. At the period end, the balance was £300,517 (2025 - £419,230).

R Scott Properties Limited is a related party due to being under the common control of a director. During the year £63,000 (2025 - £63,000) of rent was charged by R Scott Properties Limited for the use of the Chirnside Site. At the period end, the balance was £nil (2025 - £nil).

In addition, R Scott Properties Limited have provided loans to the company which have interest charged at market rates. At the period end, the balance was £155,757 (2025 - £nil).

During the year a property was rented out to a family member. The property had an open market rate of £900 per month (2025 - £850 per month).

The following amounts were outstanding at the reporting end date:

Dividends totalling £790,625 (2025 - £750,000) were paid in the year in respect of shares held by the company's directors.

The ultimate controlling party is Mr A Scott.