REGISTERED NUMBER: SC126272 (Scotland)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

FOR

LUNAR FREEZING & COLD STORAGE

COMPANY LIMITED

Page

Company Information

1

Strategic Report

2

to

3

Report of the Directors

4

to

5

Report of the Independent Auditors

6

to

8

Income Statement

9

Other Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Notes to the Financial Statements

13

to

22

DIRECTORS:

Mr J Buchan

Mr A Buchan

Mr J G Buchan

Mr S W Banks

Miss J Buchan

Mr A J Buchan

Mr W C Buchan

REGISTERED OFFICE:

East Quay

The Harbour

Peterhead

Aberdeenshire

AB42 1JF

REGISTERED NUMBER:

SC126272 (Scotland)

AUDITORS:

Bain Henry Reid

Statutory Auditors

Chartered Accountants

28 Broad Street

Peterhead

Aberdeenshire

AB42 1BY

BANKERS:

Lloyds Bank Plc

3-5 Albyn Place

Aberdeen

AB10 1PY

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

PRINCIPAL ACTIVITIES

The principal activities of the company in the year under review were those of the provision of freezing and cold storage facilities, fish processing, and the provision of fishselling and management services.

No significant change in the nature of these activities occurred during the year.

REVIEW OF BUSINESS

The results for the year and the financial position of the company are shown in the attached financial statements.

Key Performance Indicators

The directors consider the key performance indicators to be as follows:

Movement

2025

2024

%

£'000

£'000

Turnover

£98,761

£92,725

6.51

Gross profit

£3,194

£5,209

(38.68

)

Earnings before interest, tax and depreciation

£1,049

£2,644

(60.30

)

Net assets

£9,090

£9,950

(8.64

)

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the company's objectives are subject to a number of risks. The key business risks and uncertainties affecting the company relate to fluctuations in market demand for fish products and competition from other fish processing companies. These risks are formally reviewed by the board and processes are put in place to monitor and to mitigate them as far as possible.

FINANCIAL RISK MANAGEMENT

The company's financial instruments comprise borrowings from its parent company and a bank overdraft, cash and short-term deposits, and various items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to fund the company's operations as well as to manage its working capital, liquidity and invest surplus funds.

The company's operations expose it to a variety of financial risks that include the effects of changes in credit risk, liquidity risk and interest rate risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and related finance costs. The company does not use derivative financial instruments.

Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department.

Price Risk

The company is exposed to price risk due to normal inflationary increases in the purchase price of the goods and services it purchases in the UK and to fluctuations in the market price of its raw materials. The company has no exposure to equity securities price risk as it holds no listed or other equity investments.

Credit Risk

The company has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to any individual counterparty is subject to a limit, which is reassessed annually by the board.

Liquidity Risk

The company actively maintains a mixture of long-term and short-term debt finance that is designed to ensure that the company has sufficient available funds for operations and planned expansions.

Cash Flow Risk

The company has both interest bearing assets and interest bearing liabilities which are subject to variable rates of interest. The directors will revisit the appropriateness of this policy if and when appropriate.

FINANCIAL RISK MANAGEMENT (CONT'D)

Foreign Currency Risk

The company has exposure to foreign currency risk. The amount of exposure is closely monitored by the board in order to minimise this risk as much as possible.

SECTION 172(1) STATEMENT

As the Board at Lunar Freezing and Cold Storage Company, we have a legal responsibility under section 172 of the Companies Act 2006 to act in the way we consider, in good faith, would be most likely to promote the company's success for the benefit of its members as a whole, and to have regard to long-term effect of our decisions on the company and its stakeholders. This statement addresses the ways in which we as a Board have complied with this responsibility.

Promoting the company's success for its members

Lunar Freezing and Cold Storage Company Limited incorporated in 1990 and is controlled and run by the Buchan family. We are pleased of the way in which, over thirty years, the company has grown and provided employment, training and financial reward for its owners and employees.

We make strategic decisions based on long-term objectives. In particular, this has meant significant investment in capital in both the catching and processing sectors to ensure that we can maintain high quality and offer flexibility to customers. This has been at the expense of short-term gains but positions the company to supply the quality fish products our customers demand over the long term. In doing so our aim is to maximise the company's ability to grow profits and market share whilst returning the highest possible value to shareholders.

Engaging with stakeholders

We act openly in relation to all of our dealings with customers, colleagues, suppliers and third-party contacts and recognise the responsibility that we share with our suppliers to source products in an ethical manner. We want our customers to be confident that people are treated fairly and are neither exploited nor exposed to unsafe working conditions.

Our key stakeholders, and the way in which we engage with them are as follows:

Employees

The strength of our business is built on the hard work and dedication of all our employees. Although our processing facilities are highly mechanised, we rely on a skilled team of hand filleters to produce our hand cut products. Our colleagues rely on us to provide stable employment and opportunities to realise their potential in a working environment where they can be at their best. The board takes active steps to ensure that the suggestions, views and interests of the workforce are captured and considered in decision making.

Customers and suppliers

We continue to invest heavily in innovation and encourage and support continuous improvementsin supplier standards to ensure we can continue to offer customers the best quality products.Our Ethical Trading Policy requires all our suppliers to comply with our ethical code. This procedure sets out the standards that we expect to be in place throughout our supply chain. We seek to develop long term relationships with our suppliers who share our ethical standards.We have built and will maintain a reputation for transparency and fair dealing in our interaction with customers and suppliers.

Regulators

We seek to enjoy a constructive and cooperative relationship with the bodies that authorise and regulate our business activities. This helps us maintain a reputation for high standards of business conduct. They expect us to comply with applicable laws, regulations and licence conditions and these are always considered during our decision making

Community and planet

We are a family run business with roots in Peterhead and have invested heavily in our community,providing long term employment in the North East of Scotland.We are active participants in the Responsible Fishing Scheme which enables commercial fishing operations to provide assurance of good working conditions and operational best practices. In sourcing our products from RFS certified vessels our customers can be sure that as well as the care of the catch being a top priority so to is the environment with responsible fishing ensuring healthy oceans and safeguarding supplies for the future.

ON BEHALF OF THE BOARD:

Mr A Buchan - Director

14 May 2026

The directors present their report with the financial statements of the company for the year ended 31 December 2025.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2025.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors set out in the table below have held office during the whole of the period from 1 January 2025 to the date of this report.

The directors shown below were in office at 31 December 2025 but did not hold any interest in the Ordinary shares of £1 each at 1 January 2025 or 31 December 2025.

Mr J Buchan

Mr A Buchan

Mr J G Buchan

Mr S W Banks

Miss J Buchan

Mr A J Buchan

Mr W C Buchan

EMPLOYEES

The company has a recruitment policy to ensure that all applications for employment, including those made by disabled persons, are given full and fair consideration in light of the applicants’ aptitudes and abilities. There is also an equal opportunities policy to ensure that all employees are treated equally in terms of employment, training, career development and promotion. Where employees develop a disability during their employment, every effort is made to continue their employment and arrange for appropriate training as far as is reasonably practicable.

DISCLOSURE IN THE STRATEGIC REPORT

The company has disclosed matters relating to; future developments, financial risk management, employment, community and supplier relations within the strategic report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

-	state whether applicable 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 company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Bain Henry Reid, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr A Buchan - Director

14 May 2026

Opinion

We have audited the financial statements of Lunar Freezing & Cold Storage Company Limited (the 'company') for the year ended 31 December 2025 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2025 and of its 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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

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

-	the financial statements are not in agreement with the accounting records and returns; or

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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. Misstatement 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

-

we identified the laws and regulations applicable to the company through discussions with directors, and from our commercial knowledge and experience of the fishing sector;

-

we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company including the Companies Act 2006, FRS 102 requirements, taxation, food hygiene and fish quota regulations applicable to Scotland, and HSE regulations. We also considered those with an indirect effect including employment, data protection, anti-money laundering and other environmental and health and safety legislation; and

-

we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management, review of financial statement disclosures, inspecting any tax/legal or regulatory correspondence, and review of legal invoices.

We assessed the susceptibility of the company's financial statements to material misstatement including obtaining an understanding of how fraud might occur, by;

-

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

-

considering the internal controls in place to mitigate the risks of fraud and of non-compliance with laws and regulations; and

-

exercised professional judgement and maintained professional scepticism throughout the audit.

To address the risk of fraud through management bias and override of controls, we:

-

conducted a review of large or unusual items, and transactions outwith the normal course of business;

-

performed analytical procedures to identify any unusual or unexpected relationships;

-

considered the possibility of undisclosed related party transactions;

-

tested journal entries to identify unusual transactions;

-

assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

-

investigated the rationale behind significant or unusual transactions.

To address the risk of fraud through revenue recognition we:

-

conducted audit procedures to confirm that it was being recognised in line with the accounting policy; and

-

carried out substantive procedures to confirm the accuracy of completion and cut-off.

Auditors' responsibilities for the audit of the financial statements (cont'd)

In response to the risk of irregularities and non-compliance with laws and regulations we designed procedures which included, but were not limited to:

-

agreeing financial statement disclosures to underlying supporting documentation;

-

enquiring of management as to actual and potential litigation and claims; and

-

reviewing correspondence with HMRC, relevant regulators and the company's legal advisers

There are inherent limitations in our audit procedures described above. The more removed the laws and regulations are from financial statements, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Iain Arthur FCCA (Senior Statutory Auditor)

for and on behalf of Bain Henry Reid

Statutory Auditors

Chartered Accountants

28 Broad Street

Peterhead

Aberdeenshire

AB42 1BY

14 May 2026

TURNOVER

98,760,528

92,725,008

Cost of sales

95,566,395

87,516,441

GROSS PROFIT

3,194,133

5,208,567

Administrative expenses

4,370,613

4,807,885

(1,176,480

)

400,682

Other operating income

119,298

111,690

OPERATING (LOSS)/PROFIT

4

(1,057,182

)

512,372

Interest receivable and similar income

12,869

6,161

(1,044,313

)

518,533

Interest payable and similar expenses

5

-

2

(LOSS)/PROFIT BEFORE TAXATION

(1,044,313

)

518,531

Tax on (loss)/profit

6

(184,892

)

205,075

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(859,421

)

313,456

(LOSS)/PROFIT FOR THE YEAR

(859,421

)

313,456

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR

(859,421

)

313,456

FIXED ASSETS

Intangible assets

8

-

-

Tangible assets

9

25,296,628

20,768,004

Investments

10

240,000

240,000

25,536,628

21,008,004

CURRENT ASSETS

Stocks

11

34,919,353

25,941,234

Debtors

12

39,928,414

44,179,674

Cash at bank and in hand

3,257,318

5,196,582

78,105,085

75,317,490

CREDITORS

Amounts falling due within one year

13

91,196,984

84,724,430

NET CURRENT LIABILITIES

(13,091,899

)

(9,406,940

)

TOTAL ASSETS LESS CURRENT LIABILITIES

12,444,729

11,601,064

PROVISIONS FOR LIABILITIES

15

(2,142,521

)

(1,133,453

)

ACCRUALS AND DEFERRED INCOME

16

(1,211,869

)

(517,851

)

NET ASSETS

9,090,339

9,949,760

CAPITAL AND RESERVES

Called up share capital

17

2

2

Retained earnings

18

9,090,337

9,949,758

SHAREHOLDERS' FUNDS

9,090,339

9,949,760

The financial statements were approved by the Board of Directors and authorised for issue on 14 May 2026 and were signed on its behalf by:

Mr A Buchan - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

2

9,636,302

9,636,304

Changes in equity

Total comprehensive income

-

313,456

313,456

Balance at 31 December 2024

2

9,949,758

9,949,760

Changes in equity

Total comprehensive loss

-

(859,421

)

(859,421

)

Balance at 31 December 2025

2

9,090,337

9,090,339

1.	STATUTORY INFORMATION

Lunar Freezing & Cold Storage Company Limited is a private company, limited by shares , registered in Scotland. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' ('FRS 102'), and with the Companies Act 2006. The financial statements have been prepared on the historic cost basis except for the modification to a fair value basis for certain financial instruments as specified in the accounting policies below.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Preparation of consolidated financial statements

The financial statements contain information about Lunar Freezing & Cold Storage Company Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Lunar Fishing Company Limited, East Quay, The Harbour, Peterhead, AB42 1JF.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:

Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

Impairment of stock on hand

The company's stock on hand comprises of fish for resale which has a finite shelf life and is subject to market conditions due to consumer demand. As a result it is necessary to consider the recoverability of the cost of stock on hand and the associated provisioning required. When calculating any stock impairment, management considers the nature and condition of the stock, as well as applying assumptions around anticipated saleability of finished goods.

Impairment of debtors

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management consider factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.

Revenue recognition

Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services.

Sale of goods:

Turnover from the sale of goods represents revenue earned from the sale of wholesale and processed fish products. The sale of goods is recognised when the significant risks and rewards of ownership of the goods has transferred to the buyer. This is usually at the point that the customer has signed for the delivery of the goods.

Rendering of services:

Turnover from the rendering of services represents revenue earned from the provision of freezing and cold storage, transportation and engineering services. Turnover is recognised in the accounting period in which the services are rendered when the outcome of the contract can be estimated reliably.

Management fees

Management fee income is recognised when the right to receive payment for services rendered is established.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of business in 2001 and 2002, has been written off over its estimated useful life of 10 and 5 years, respectively.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is calculated to write down the cost less estimated residual value of all tangible fixed assets, other than freehold land, over their estimated useful life or, if held under a finance lease, over the term of the lease, whichever is the shorter. The rates applicable are:

Heritable property

- Over 50 years

Leasehold property

- Over the term of the lease

Plant and machinery

- Over 5 to 10 years

Fixtures and fittings

- Over 5 years

Motor vehicles

- Over 4 to 8 years

Impairment of assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

Stock is also assessed for impairment at each reporting date. The carrying amount is compared with its selling price less costs to complete and sell. If stock is impaired, its carrying amount is reduced to its selling price less costs to complete and sell, and an impairment loss is recognised immediately in profit or loss.

If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Fixed asset investments

Investments held are stated at cost less accumulated impairment losses.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Stocks have been valued at the lower of cost and estimated selling price less costs to sell, after making due allowance for obsolete and slow moving items.

Trade debtors

Trade debtors on normal terms are stated at their nominal value and are assessed for recoverability on an ongoing basis.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

The company's functional and presentation currency is Pound Sterling (£).

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value is determined.

Foreign exchange gains and losses resulting from the settlement of transactions and for the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.

Leases

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Rentals payable under operating leases are charged to the profit or loss on a straight line basis over the lease term, unless the rental payments are structured to increase in line with expected general inflation, in which case the company recognises annual rent expense equal to amounts owed to the lessor.

The aggregate benefit of lease incentives are recognised as a reduction to the expense recognised over the lease term on a straight line basis.

Employee benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Contributions in respect of the company's defined contribution pension scheme are charged to the profit and loss account for the year in which they are payable to the scheme. Differences between contributions payable and contributions actually paid in the year are shown as either accruals or prepayments at the year end.

Provision for liabilities

Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

The company recognises a provision for annual leave accrued by employees as a result of services rendered in the current period, and which employees are entitled to carry forward and use within the next twelve months. The provision is measured at the salary cost payable for the period of absence.

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Financial instruments

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

Debt instruments like loans and other accounts receivable and payable are initially measured at the present value of the future payments and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate, or in the case of an outright short term loan not at market rate, the financial asset or liability is measured, initially and subsequently, at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in profit or loss.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the net present value of estimated cash flows discounted at the assets original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the best estimate, which is an approximation, of the amount that the company would receive for the asset if it were to be sold at the reporting date.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk to changes in value.

Going concern

At the time of approving the financial statements the directors have a reasonable expectation that the company has adequate resources to continue in operation for the foreseeable future, and therefore continue to adopt the going concern basis of accounting in preparing the financial statements.

3.	EMPLOYEES AND DIRECTORS

2025

2024

£

£

Wages and salaries

15,774,146

14,256,878

Social security costs

1,228,419

943,847

Other pension costs

240,390

200,910

17,242,955

15,401,635

The average number of employees during the year was as follows:

2025

2024

Production

231

188

Administration

58

51

289

239

2025

2024

£

£

Directors' remuneration

328,867

311,303

Directors' pension contributions to money purchase schemes

26,142

24,264

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

2

2

Information regarding the highest paid director is as follows:

2025

2024

£

£

Emoluments etc

212,889

201,196

Pension contributions to money purchase schemes

17,574

16,224

4.	OPERATING (LOSS)/PROFIT

The operating loss (2024 - operating profit) is stated after charging/(crediting):

2025

2024

£

£

Other operating leases

169,112

158,983

Depreciation - owned assets

2,132,492

2,136,864

Profit on disposal of fixed assets

(25,844

)

(5,418

)

Auditors' remuneration

13,000

13,000

Auditors' remuneration for non audit work

9,000

7,000

Operating lease rentals receivable

(86,120

)

(86,120

)

(Profit)/Loss on foreign exchange

(761,542

)

18,826

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2025

2024

£

£

Bank interest

-

2

6.

TAXATION

Analysis of the tax (credit)/charge

The tax (credit)/charge on the loss for the year was as follows:

2025

2024

£

£

Current tax:

Group relief payable/ (receivable)

(1,193,960

)

38,284

Deferred tax

1,009,068

166,791

Tax on (loss)/profit

(184,892

)

205,075

UK corporation tax has been charged at 25% (2024 - 25%).

Reconciliation of total tax (credit)/charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2025

2024

£

£

(Loss)/profit before tax

(1,044,313

)

518,531

(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 25% (2024 - 25%)

(261,078

)

129,633

Effects of:

Expenses not deductible for tax purposes

69

74

Depreciation on non qualifying assets

75,796

75,368

Tax re previous years

321

-

taxation

Total tax (credit)/charge

(184,892

)

205,075

7.	PENSION COSTS (DEFINED CONTRIBUTION SCHEME)

The company operates a money purchase (defined contribution) pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £240,390 (2024: £200,910).

8.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 January 2025

and 31 December 2025

100,003

AMORTISATION

At 1 January 2025

and 31 December 2025

100,003

NET BOOK VALUE

At 31 December 2025

-

At 31 December 2024

-