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REGISTERED NUMBER: 03685099 (England and Wales)















DAVID HUNT (NORTH DEVON) LIMITED

Strategic Report, Report of the Director and

Financial Statements for the Year Ended 31 December 2022






DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)






Contents of the Financial Statements
for the year ended 31 December 2022




Page

Company Information 1

Strategic Report 2 to 3

Report of the Director 4 to 5

Report of the Independent Auditors 6 to 7

Income Statement 8

Other Comprehensive Income 9

Balance Sheet 10

Statement of Changes in Equity 11

Cash Flow Statement 12

Notes to the Cash Flow Statement 13

Notes to the Financial Statements 14 to 22


DAVID HUNT (NORTH DEVON) LIMITED

Company Information
for the year ended 31 December 2022







Director: D Hunt





Secretary: Mrs J L Hunt





Registered office: Old Station Road
Eastern Avenue
Barnstaple
Devon
EX32 8PB





Registered number: 03685099 (England and Wales)





Auditors: Haines Watts Birmingham LLP
5-6 Greenfield Crescent
Edgbaston
Birmingham
West Midlands
B15 3BE

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Strategic Report
for the year ended 31 December 2022

The director presents his strategic report for the year ended 31 December 2022.

Review of business
The company operates four McDonald's franchised restaurants in Devon and Somerset, employing over 400 members of staff.

Store and delivery sales profitability, although strong in the first half of 2022, has been impacted in the second half of the year by amongst other things the increase in VAT within the hospitality sector back to the standard rate of 20% from 1 April 2022, a volatile supply chain and rising costs base.

Given the direct link between our approach to pricing, the external environment, and our success in relation to our customers, we will continue to remain close to understanding this relationship and look constantly to evaluate how our internal actions are impacting our customers.

The financial position of the company is healthy with the balance sheet showing net assets of £540k decreased from £1.03 million in 2021.

Key Performance Indicators
Sales for the year amounted £18.38 million, an increase of £1.17 million from 2021 giving an overall sales increase of approximately 6.83%. The growth in sales is predominantly due to the continued growth in delivery sales.

The gross profit margin is 65.33% compared to 69.48% in 2021 and is in line with expectations.

Future Developments
2023 will continue to be impacted from ever-volatile external environments, with consumer trends likely changing ever more frequently due to on-going economic challenges. Consumer confidence remains at record low levels, and it is currently unknown how this will develop in the short term.

It is anticipated that consumers will be hit hardest in Q1 while they continue to adjust to high energy bills alongside higher prices for essential goods. We believe it is likely that consumers will look to reduce spend after the first full festive period since 2019 (Pre Covid-19). Some of the impact from the increased pressure on consumer spending will be masked in January and February as we will be comparable to tail end of Omicron which suppressed Guest Counts ('GC') in Q1 2022.

We will expect strong sales growth as a result of our menu and marketing plans across the year, but will see a significant benefit in Q1, Q2 and Q3 as a result of McCrispy and the permanent launch of McSpicy products.

We anticipate strongest sales throughout the summer of 2023 as we execute higher levels of pricing alongside seeing continued benefit from our digital plans including MyMcDonald's rewards. We anticipate delivery to see softer growth in 2023 as the market continues to normalise after the pandemic and we achieve our new post COVID baseline for the channel, however we expect to continue to grow market share ahead of our competitors, and boost sales through Deliveroo and the further optimisation of our delivery operations.


DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Strategic Report
for the year ended 31 December 2022

Principal risks and uncertainties
The company is continually assessing all risks with an aim to mitigate any future threats these may have on the business.

Economic risk
Following some very challenging times, we are optimistic about the economic future. Customer confidence continues to rise and unemployment rates are falling. A cautious approach is still required as real disposable income continues to decline as the Cost of Living and interest rates continue to rise. Principal risks are increasing commodity prices, increased utility costs and labour rates adding pressure to margins with significant upward movements in interest rates that may also increase costs. The first mentioned risk is controlled by McDonald's collective purchasing initiatives.

The level of borrowing is such that interest rate increases are manageable.

Regulatory risks
The company's operations demand a high level of compliance within a wide range of regulatory requirements. In particular -
* Health and safety
* Hygiene procedures
* Employment laws
* Licensing
The above, along with a number of other areas, are monitored in detail by McDonald's, as being in the fast food industry brings a high level of regulatory concerns.

Consumer taste
Any material changes in the way the consumer views the fast food industry could have an adverse effect on the company. However, this can also work in the opposite direction and could assist the company to achieve growth. As a result, the company focuses, in detail, on recognising demographic trends, ensuring innovation and the use of the freshest and highest quality products through its stores. The company has strict policies to ensure that all stores are maintaining the McDonald's ethos.

Competitors
The fast food market is a very competitive market, with a high number of large competitors trading in the sector. In order to remain as one of the main players, McDonald's have dedicated teams who focus on ensuring they remain a leading company within the market. This allows them to compete with other large fast food chains.

With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside our control, hence we are constantly assessing our plans in line with the current environment.

On behalf of the board:





D Hunt - Director


16 October 2023

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Report of the Director
for the year ended 31 December 2022

The director presents his report with the financial statements of the company for the year ended 31 December 2022.

Principal activity
The principal activity of the company in the year under review was that of the operation of McDonald's franchised restaurants.

Dividends
Interim dividends per share were paid as follows:
Ordinary A £1 shares £222.22 - 31 December 2022
Ordinary B £1 shares £2,000.00 - 31 December 2022


The director recommends that no final dividends be paid.

The total distribution of dividends for the year ended 31 December 2022 will be £ 400,000 .

Research and development
The company does not carry out any independent research and development. However the franchisor, McDonalds' Restaurants Limited, carries out its own research and development on behalf of all franchisees. The company makes a contribution towards this through its existing payments to the franchisor.

Director
D Hunt held office during the whole of the period from 1 January 2022 to the date of this report.

Going concern
The company is in a net current liabilities position at the balance sheet date, however this is a reflection of the nature of the fast food industry and not a reflection of the strength of the business.

The directors have considered the application of the going concern basis of accounting in doing so they have considered the period from the date of this report until 31 December 2024. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Employment of disabled persons
The company operates a policy of giving full & fair consideration to employment applications from disabled persons.

Provision of information to employees
The company has a system for providing employees with information of concern to them . It also consults employees on a regular basis so that their views can be taken into account in making decisions affecting them. It regularly to explains to employees the financial and economic factors affecting the performance of the company and makes them aware of the provision of training, career development and employment of disabled employees.

Director's responsibilities statement
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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.

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Report of the Director
for the year ended 31 December 2022


Statement as to disclosure of information to auditors
So far as the director is 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 he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Auditors
The auditors, Haines Watts Birmingham LLP, were appointed during the year and are deemed re-appointed under Section 487(2) of the Companies Act 2006.

On behalf of the board:





D Hunt - Director


16 October 2023

Report of the Independent Auditors to the Members of
David Hunt (North Devon) Limited

Opinion
We have audited the financial statements of David Hunt (North Devon) Limited (the 'company') for the year ended 31 December 2022 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 2022 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 director's 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 director with respect to going concern are described in the relevant sections of this report.

Other information
The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, 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 Director 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 Director 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 Director.

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 director's remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Report of the Independent Auditors to the Members of
David Hunt (North Devon) Limited


Responsibilities of director
As explained more fully in the Director's Responsibilities Statement set out on page four, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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. 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.

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

Based on our understanding of the industry, we identified that the principal risks of non-compliance related to breaches of health and safety, including food hygiene. We considered the extent to which non-compliance might have a material affect on the financial statements. We also considered those laws and regulations that have a direct impact on preparation of the financial statements, such as the Companies Act 2006. We examined management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of overriding of controls) and determined that the principal risks were relating to management bias in accounting estimates, in particular those of accrued liabilities and the useful life of tangible assets. We also discussed with management the possibility of non-compliance with health and safety and food hygiene regulations and reviewed the management controls in place to detect such irregularities. Audit procedures included challenging assumptions made by management in their significant accounting estimates. There are inherent limitations in the Audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions described in the financial statements, the less likely we would become aware of it. Also the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one due to error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through 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.




Andrew Hughes FCA (Senior Statutory Auditor)
for and on behalf of Haines Watts Birmingham LLP
5-6 Greenfield Crescent
Edgbaston
Birmingham
West Midlands
B15 3BE

17 October 2023

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Income Statement
for the year ended 31 December 2022

2022 2021
Notes £ £

Turnover 18,384,882 17,210,064

Cost of sales (6,374,590 ) (5,251,831 )
Gross profit 12,010,292 11,958,233

Administrative expenses (12,149,369 ) (10,970,954 )
(139,077 ) 987,279

Other operating income - 264,398
Operating (loss)/profit 4 (139,077 ) 1,251,677

Interest receivable and similar income 66 -
(139,011 ) 1,251,677

Interest payable and similar expenses 5 (13,512 ) (13,182 )
(Loss)/profit before taxation (152,523 ) 1,238,495

Tax on (loss)/profit 6 61,601 (370,193 )
(Loss)/profit for the financial year (90,922 ) 868,302

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Other Comprehensive Income
for the year ended 31 December 2022

2022 2021
Notes £ £

(Loss)/profit for the year (90,922 ) 868,302


Other comprehensive income - -
Total comprehensive (loss)/income for the
year

(90,922

)

868,302

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Balance Sheet
31 December 2022

2022 2021
Notes £ £ £ £
Fixed assets
Intangible assets 9 82,337 88,656
Tangible assets 10 1,501,206 2,003,154
Investments 11 5,000 5,000
1,588,543 2,096,810

Current assets
Stocks 12 63,635 48,899
Debtors 13 207,737 198,179
Cash at bank and in hand 639,046 1,023,382
910,418 1,270,460
Creditors
Amounts falling due within one year 14 1,780,158 1,695,737
Net current liabilities (869,740 ) (425,277 )
Total assets less current liabilities 718,803 1,671,533

Creditors
Amounts falling due after more than one
year

15

-

(372,792

)

Provisions for liabilities 19 (179,018 ) (268,034 )
Net assets 539,785 1,030,707

Capital and reserves
Called up share capital 20 1,000 1,000
Retained earnings 21 538,785 1,029,707
Shareholders' funds 539,785 1,030,707

The financial statements were approved by the director and authorised for issue on 16 October 2023 and were signed by:





D Hunt - Director


DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Statement of Changes in Equity
for the year ended 31 December 2022

Called up
share Retained Total
capital earnings equity
£ £ £

Balance at 1 January 2021 1,000 481,405 482,405

Changes in equity
Dividends - (320,000 ) (320,000 )
Total comprehensive income - 868,302 868,302
Balance at 31 December 2021 1,000 1,029,707 1,030,707

Changes in equity
Dividends - (400,000 ) (400,000 )
Total comprehensive loss - (90,922 ) (90,922 )
Balance at 31 December 2022 1,000 538,785 539,785

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Cash Flow Statement
for the year ended 31 December 2022

2022 2021
Notes £ £
Cash flows from operating activities
Cash generated from operations 1 863,132 1,750,465
Interest paid (13,512 ) (13,182 )
Tax paid (248,634 ) (96,535 )
Net cash from operating activities 600,986 1,640,748

Cash flows from investing activities
Purchase of tangible fixed assets (170,585 ) (409,809 )
Sale of tangible fixed assets - 4,480
Interest received 66 -
Net cash from investing activities (170,519 ) (405,329 )

Cash flows from financing activities
Loan repayments in year (416,263 ) (459,536 )
Amount introduced by directors 400,000 320,000
Amount withdrawn by directors (398,540 ) (328,337 )
Equity dividends paid (400,000 ) (320,000 )
Net cash from financing activities (814,803 ) (787,873 )

(Decrease)/increase in cash and cash equivalents (384,336 ) 447,546
Cash and cash equivalents at beginning
of year

2

1,023,382

575,836

Cash and cash equivalents at end of year 2 639,046 1,023,382

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Notes to the Cash Flow Statement
for the year ended 31 December 2022

1. Reconciliation of (loss)/profit before taxation to cash generated from operations
2022 2021
£ £
(Loss)/profit before taxation (152,523 ) 1,238,495
Depreciation charges 677,283 668,117
Loss/(profit) on disposal of fixed assets 1,569 (1,585 )
Finance costs 13,512 13,182
Finance income (66 ) -
539,775 1,918,209
(Increase)/decrease in stocks (14,736 ) 6,054
Increase in trade and other debtors (9,556 ) (50,038 )
Increase/(decrease) in trade and other creditors 347,649 (123,760 )
Cash generated from operations 863,132 1,750,465

2. Cash and cash equivalents

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2022
31/12/22 1/1/22
£ £
Cash and cash equivalents 639,046 1,023,382
Year ended 31 December 2021
31/12/21 1/1/21
£ £
Cash and cash equivalents 1,023,382 575,836


3. Analysis of changes in net funds/(debt)

At 1/1/22 Cash flow At 31/12/22
£ £ £
Net cash
Cash at bank and in hand 1,023,382 (384,336 ) 639,046
1,023,382 (384,336 ) 639,046
Debt
Debts falling due within 1 year (393,429 ) 43,470 (349,959 )
Debts falling due after 1 year (372,792 ) 372,792 -
(766,221 ) 416,262 (349,959 )
Total 257,161 31,926 289,087

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Notes to the Financial Statements
for the year ended 31 December 2022

1. Statutory information

David Hunt (North Devon) Limited is a private company, limited by shares , registered in England and Wales. 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 Financial Reporting Standard 102 "The Financial Reporting Standard in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going Concern
The company is in a net current liabilities position at the balance sheet date, however this is a reflection of the nature of the fast food industry and not a reflection of the strength of the business.

The directors have considered the application of the going concern basis of accounting in doing so they have considered the period from the date of this report until 31 December 2024. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Franchise rights & fees
Franchise rights & fees, being the amounts paid on acquisition of restaurants, are being written off evenly over the terms of the franchise agreements.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Short leasehold - Straight line over 33 years
Fixtures and fittings - 10% on cost
Motor vehicles - 25% on reducing balance

Government grants
Grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received.

Grants are recognised using the accrual model.

Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset.

Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

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.


DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Notes to the Financial Statements - continued
for the year ended 31 December 2022

2. Accounting policies - continued
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.

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

Pension costs and other post-retirement 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.

Impairment of fixed assets
At each reporting end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated 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 each 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.

Holiday pay accrual
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. This is measured at the undiscounted cost of the future holiday entitlement so accrued at the Balance Sheet date.

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Notes to the Financial Statements - continued
for the year ended 31 December 2022

2. Accounting policies - continued

Financial instruments
The Company only enters into basic financial instruments that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

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

For assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and 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 balance sheet date.

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.

Finance costs
Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Dividends
Equity dividends are recognised when they legally become payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Judgements in applying accounting policies and key sources of estimation uncertainty
In the process of applying the company's accounting policies, management are required to make certain estimates and judgements. The key estimates and judgements are as follows:

Depreciation and residual values
The director has reviewed the asset lives and associated residual values of all fixed asset classes, and has concluded that asset lives and residual values are appropriate.

Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

Holiday pay accrual
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. This is measured at the undiscounted cost of the future holiday entitlement so accrued at the Balance Sheet date.

3. Employees and directors
2022 2021
£ £
Wages and salaries 5,191,882 4,857,882
Social security costs 275,000 239,397
Other pension costs 102,792 97,267
5,569,674 5,194,546

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Notes to the Financial Statements - continued
for the year ended 31 December 2022

3. Employees and directors - continued

The average number of employees during the year was as follows:
2022 2021

Crew labour 409 373
Managers 16 16
425 389

2022 2021
£ £
Director's remuneration 11,692 8,000
Director's pension contributions to money purchase schemes 36,325 36,325

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

Money purchase schemes 1 1

4. Operating (loss)/profit

The operating loss (2021 - operating profit) is stated after charging/(crediting):

2022 2021
£ £
Other operating leases 2,126,577 2,054,986
Depreciation - owned assets 670,963 661,799
Loss/(profit) on disposal of fixed assets 1,569 (1,585 )
Franchise fees amortisation 6,319 6,318
Auditors' remuneration 8,750 10,701
Other non- audit services 13,530 4,162

5. Interest payable and similar expenses
2022 2021
£ £
Bank loan interest 13,512 13,182

6. Taxation

Analysis of the tax (credit)/charge
The tax (credit)/charge on the loss for the year was as follows:
2022 2021
£ £
Current tax:
UK corporation tax 27,415 248,568

Deferred tax (89,016 ) 121,625
Tax on (loss)/profit (61,601 ) 370,193

UK corporation tax has been charged at 19% (2021 - 19%).

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Notes to the Financial Statements - continued
for the year ended 31 December 2022

6. Taxation - continued

Reconciliation of total tax (credit)/charge included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2022 2021
£ £
(Loss)/profit before tax (152,523 ) 1,238,495
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of
19% (2021 - 19%)

(28,979

)

235,314

Effects of:
Expenses not deductible for tax purposes (2,960 ) 781
Depreciation in excess of capital allowances 59,056 12,774
Deferred tax charge (89,016 ) 121,625
(Profit)/loss on disposal of assets 298 (301 )
Total tax (credit)/charge (61,601 ) 370,193

The Finance Act 2021 introduced an increase to the UK's main corporation tax rate to 25%, which is due to be effective from 1 April 2023.

Deferred tax has been calculated at 25% (2021 - 25%).

7. Dividends
2022 2021
£ £
Ordinary A shares of £1 each
Interim 200,000 160,000
Ordinary B shares of £1 each
Interim 200,000 160,000
400,000 320,000

8. Government grants

During the period the company received a total grant of £nil (2021 - £264,398) under the Coronavirus Job Retention scheme. This is shown in the profit and loss account under the heading other income.:

9. Intangible fixed assets
Franchise Franchise
rights fees Totals
£ £ £
Cost
At 1 January 2022
and 31 December 2022 300,820 120,000 420,820
Amortisation
At 1 January 2022 300,819 31,345 332,164
Amortisation for year - 6,319 6,319
At 31 December 2022 300,819 37,664 338,483
Net book value
At 31 December 2022 1 82,336 82,337
At 31 December 2021 1 88,655 88,656

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Notes to the Financial Statements - continued
for the year ended 31 December 2022

10. Tangible fixed assets
Fixtures
Short and Motor
leasehold fittings vehicles Totals
£ £ £ £
Cost
At 1 January 2022 31,879 6,386,769 45,198 6,463,846
Additions - 170,585 - 170,585
Disposals - (4,873 ) - (4,873 )
At 31 December 2022 31,879 6,552,481 45,198 6,629,558
Depreciation
At 1 January 2022 6,034 4,446,486 8,172 4,460,692
Charge for year 1,719 659,988 9,256 670,963
Eliminated on disposal - (3,303 ) - (3,303 )
At 31 December 2022 7,753 5,103,171 17,428 5,128,352
Net book value
At 31 December 2022 24,126 1,449,310 27,770 1,501,206
At 31 December 2021 25,845 1,940,283 37,026 2,003,154

11. Fixed asset investments
Unlisted
investments
£
Cost
At 1 January 2022
and 31 December 2022 5,000
Net book value
At 31 December 2022 5,000
At 31 December 2021 5,000

Fixed asset investments consists of 5,000 (2021 - 5,000) ordinary shares of £1 each in Fries Holding Company Limited, a company registered in Guernsey. The investments are included in the accounts at cost.

12. Stocks
2022 2021
£ £
Stocks 63,635 48,899

20222021
£   £   
Food44,29333,006
Paper13,1508,528
Non-product6,1927,365
63,63548,899

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Notes to the Financial Statements - continued
for the year ended 31 December 2022

13. Debtors: amounts falling due within one year
2022 2021
£ £
Trade debtors 1,640 7,160
Other debtors 138,975 131,797
Prepayments 67,122 59,222
207,737 198,179

14. Creditors: amounts falling due within one year
2022 2021
£ £
Bank loans and overdrafts (see note 16) 349,959 393,429
Trade creditors 514,578 416,201
Corporation tax 27,349 248,568
Social security and other taxes 49,654 48,576
VAT 563,300 278,776
Other creditors 69,602 136,714
Directors' current accounts 1,838 377
Accrued expenses 203,878 173,096
1,780,158 1,695,737

15. Creditors: amounts falling due after more than one year
2022 2021
£ £
Bank loans (see note 16) - 372,792

16. Loans

An analysis of the maturity of loans is given below:

2022 2021
£ £
Amounts falling due within one year or on demand:
Bank loans 349,959 393,429

Amounts falling due between one and two years:
Bank loans - 1-2 years - 155,452

Amounts falling due between two and five years:
Bank loans - 2-5 years - 217,340

The loans are due for repayment in equal monthly instalments with terms as stated above. They are unsecured with interest charged at rates between 1.2% and 1.7% above the Bank of England Base rate.

The loan balance includes a single loan from HSBC which contains a covenant in respect of debt service coverage. If adjusted cashflow falls below 110% of debt service, the bank has the right to default the loan.

Whilst the company was able to fulfill all of its loan repayment obligations, it was unable to meet the debt servicing requirements during the year ended 31 December 2022. The breach was reported to HSBC following the year end and, on 19 September 2023, HSBC indicated that it will not take any action pursuant to an Event of Default but reserves its right to take any action if they deem appropriate to do so. The covenant has been calculated on the 31 August 2023 management accounts which has indicated the company is no longer in breach of its debt servicing requirement.

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Notes to the Financial Statements - continued
for the year ended 31 December 2022

17. Leasing agreements

Minimum lease payments under non-cancellable operating leases fall due as follows:
2022 2021
£ £
Within one year 419,376 419,376
Between one and five years 1,677,504 1,677,504
In more than five years 3,207,779 3,627,155
5,304,659 5,724,035

Lease payments recognised as an expense in the year totalled £2,120,635 (2021 - £2,048,215).

The Company's restaurant premises are leased from McDonalds Restaurants Limited under non-cancellable operating leases with expiry terms of more than five years. Rent is calculated as a percentage of sales above base, the above operating lease commitment only relates to base rent. Each restaurant pays its own unique base rent based on its circumstances, with the remainder of the rent being based on the performance of the restaurant.

18. Financial instruments

Financial Assets 2022 2021
£ £
Financial assets as an equity instrument 5,000 5,000
Financial assets that are debt instruments measured at amortised cost 779,661 1,081,894
784,661 1,086,894


Financial Liabilities 1,139,855 1,492,609
1,139,855 1,492,609

19. Provisions for liabilities
2022 2021
£ £
Deferred tax 179,018 268,034

Deferred tax
£
Balance at 1 January 2022 268,034
Provided during year (89,016 )
Balance at 31 December 2022 179,018

20. Called up share capital

Allotted, issued and fully paid:
Number: Class: Nominal 2022 2021
value: £ £
900 Ordinary A £1 900 900
100 Ordinary B £1 100 100
1,000 1,000

DAVID HUNT (NORTH DEVON) LIMITED (REGISTERED NUMBER: 03685099)

Notes to the Financial Statements - continued
for the year ended 31 December 2022

21. Reserves
Retained
earnings
£

At 1 January 2022 1,029,707
Deficit for the year (90,922 )
Dividends (400,000 )
At 31 December 2022 538,785

22. Related party disclosures

During the year, total dividends of £200,000 (2021 - £160,000) were paid to the director .

As at the balance sheet date, the balance owed to the director D Hunt from the company amounts to £1,838 (2021 - £377). This balance bears no fixed rate of interest and is repayable on demand

23. Ultimate controlling party

The ultimate controlling party is D Hunt.