Company registration number 01821491 (England and Wales)
CHERRYTREE BAKERY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
CHERRYTREE BAKERY LIMITED
COMPANY INFORMATION
Directors
Mr G J Entwistle
Ms J Page
Mrs C A Milburn
Ms H E Colley
Mr M J Beaumont
Mr J Meadowcroft
(Appointed 14 January 2023)
Secretary
Mr G J Entwistle
Company number
01821491
Registered office
Belshaw Court
and business address
Billington Road
Burnley
Lancashire
BB11 5UB
Auditors
Pierce C A Limited
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
Bankers
Barclays Bank plc
P O Box 20
72-78 St James Street
Burnley
Lancashire
BB11 1NH
CHERRYTREE BAKERY LIMITED
CONTENTS
Page
Strategic report
1
Directors' responsibilities statement
2
Directors' report
3
Independent auditor's report
4 - 6
Statement of income and retained earnings
7
Balance sheet
8
Notes to the financial statements
9 - 22
CHERRYTREE BAKERY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 1 -

The directors present the strategic report for the year ended 31 July 2023.

Review of the business

The Directors are pleased with the results for the financial year. The company has managed a 33.3% increase in turnover in a highly competitive marketplace. This has been achieved through pursuing opportunities which are complimentary to our production capability, providing significant cost synergies, without attracting any additional overheads.

Additionally, some significant and ongoing raw material cost price increases have been managed through effective contract timing and this has shown in the results. We continued to see increasing demand from our core strategic client base.

 

 

Principal risks and uncertainties

We are always mindful of the uncertainties in the ingredients marketplace which has led to closer collaboration with our supply base. Effective raw material planning during the year mitigated significant raw material price fluctuations for certain products but we are mindful of the potential for sudden and unknown raw material cost price increases.

The well publicised issues with the labour market continue unabated and we have ongoing competition with other local businesses for staff at all levels. This will undoubtedly add to the cost base in the coming months as we continue to scale up the operation.

The company does not actively use financial instruments as part of its financial risk management. The company is exposed to the usual credit and cash flow risks associated with selling on credit and manages this through credit control procedures. The company finances working capital through retained earnings and its exposure to price risk is therefore minimal.

Future Developments

The fit out of the new facility is likely to come onstream in Q2 2024 and will add significant capacity in our core markets. We are confident in our ability to fill this capacity with our client base and we remain confident that this site will be a significant catalyst for the next phase of growth at Cherrytree Bakery.

Multiple export contracts have been negotiated which will further increase turnover from Q1 2024 and facilitate the need to bring on stream the new facility.

A branded presence will form part of the next phase of growth, and we have formed a close working relationship with one of the UKS largest confectionary brands. Additionally, we continue the roll out of our Cherrytree brand into the UK foodservice marketplace.

New production capabilities will be enabled in the new facility, and we have already agreed contracts to this end.

 

 

 

Summary

Our core objective is to be a great place to work making great products for great customers. This objective is always at the forefront of our thinking and will be integral into the next phase of growth, with CSR in mind.

On behalf of the board

G J Entwistle
Director
11 March 2024
CHERRYTREE BAKERY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2023
- 2 -

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

 

 

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.

CHERRYTREE BAKERY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 July 2023.

Principal activities
The principal activity of the company is that of the manufacturing of bakery products.
Directors

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

Mr G J Entwistle
Ms J Page
Mrs C A Milburn
Ms H E Colley
Mr M J Beaumont
Mr J Meadowcroft
(Appointed 14 January 2023)
Results and dividends

The results for the year are set out on page 7.

The directors do not recommend the payment of a final dividend.

Auditor

The auditor, Pierce C A Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

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 company’s auditor 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 company’s auditor is aware of that information.

On behalf of the board
Mr G J Entwistle
Director
11 March 2024
CHERRYTREE BAKERY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CHERRYTREE BAKERY LIMITED
- 4 -
Opinion

We have audited the financial statements of Cherrytree Bakery Limited (the 'company') for the year ended 31 July 2023 which comprise the statement of income and retained earnings, the balance sheet 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:

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 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 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:

CHERRYTREE BAKERY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CHERRYTREE BAKERY LIMITED
- 5 -
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 and the directors' report.

 

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:

 

Responsibilities of directors

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 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.

Auditor's 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 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

In identifying and assessing risks of material misstatements in respect of irregularities (including fraud) we considered the following:

 

We have also performed specific procedures to consider the risk of management override and of fraud arising in significant transactions outside the normal course of business.

We did not identify a material risk of non-compliance with laws and regulations or of fraud.

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.

CHERRYTREE BAKERY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CHERRYTREE BAKERY LIMITED
- 6 -

Use of our report

This report is made solely to the company's member 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 member 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 member for our audit work, for this report, or for the opinions we have formed.

Linda Wilkinson (Senior Statutory Auditor)
for and on behalf of Pierce C A Limited
13 March 2024
Statutory Auditor
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
CHERRYTREE BAKERY LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 JULY 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
22,396,581
16,800,520
Cost of sales
(16,258,532)
(12,417,489)
Gross profit
6,138,049
4,383,031
Distribution costs
(904,632)
(654,534)
Administrative expenses
(3,435,500)
(3,330,213)
Other operating income
7,915
25,376
Operating profit
6
1,805,832
423,660
Interest payable and similar expenses
7
(15,711)
(20,532)
Profit before taxation
1,790,121
403,128
Tax on profit
9
(416,249)
(66,397)
Profit for the financial year
1,373,872
336,731
Retained earnings brought forward
1,647,186
1,310,455
Retained earnings carried forward
3,021,058
1,647,186

The profit and loss account has been prepared on the basis that all operations are continuing operations.

CHERRYTREE BAKERY LIMITED
BALANCE SHEET
AS AT
31 JULY 2023
31 July 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,392,096
970,283
Current assets
Stocks
11
1,659,455
1,131,359
Debtors
12
5,035,640
2,821,228
Cash at bank and in hand
323,023
287,195
7,018,118
4,239,782
Creditors: amounts falling due within one year
13
(4,911,279)
(3,263,188)
Net current assets
2,106,839
976,594
Total assets less current liabilities
3,498,935
1,946,877
Creditors: amounts falling due after more than one year
14
(234,022)
(149,469)
Provisions for liabilities
Deferred tax liability
17
243,853
150,220
(243,853)
(150,220)
Net assets
3,021,060
1,647,188
Capital and reserves
Called up share capital
20
1
1
Capital redemption reserve
1
1
Profit and loss reserves
3,021,058
1,647,186
Total equity
3,021,060
1,647,188

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true

The financial statements were approved by the board of directors and authorised for issue on 11 March 2024 and are signed on its behalf by:
Mr G J Entwistle
Director
Company registration number 01821491 (England and Wales)
CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
- 9 -
1
Accounting policies
Company information

Cherrytree Bakery Limited is a private company limited by shares incorporated in England and Wales. The registered office is Belshaw Court, Billington Road, Burnley, Lancashire, BB11 5UB.

1.1
Accounting convention

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.

This 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:

 

 

 

 

The financial statements of the company are consolidated in the financial statements of Fina Holdings Limited. These consolidated financial statements are available from its registered office: Belshaw Court, Billington Road, Burnley, Lancashire, BB11 5UB.

1.2
Going concern

The company finances its business operations through trading profits and the ongoing support of its bankerstrue and a connected company.

 

The directors are not aware of any reasons why the bank loan facilities and connected company borrowings will not be maintained at their current levels.

 

The directors are satisfied that in preparing the financial statements they have taken into account all the

information that could reasonably be expected to be available.

 

On this basis they consider that it is appropriate to prepare the financial statements on the going concern basis.

1.3
Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts.

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.

CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 10 -
1.4
Tangible fixed assets

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:

Plant and machinery
15% Reducing balance
Fixtures, fittings & equipment
15% - 20% Reducing balance
Motor vehicles
20% Reducing balance

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 credited or charged to profit or loss.

1.5
Stocks

Stock is valued at the lower of cost and net realisable value.

 

Cost represents all expenditure incurred in bringing stock to its condition and location at the accounting date.

 

Net realisable value is based on estimated selling prices less further costs expected to be incurred to completion and disposal.

1.6
Cash and cash equivalents

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.

1.7
Financial instruments

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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

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

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.

CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 11 -
Impairment of financial assets

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.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.

Classification of financial liabilities

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 company after deducting all of its liabilities.

Basic financial 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.

 

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.

Other financial liabilities

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 12 -
1.8
Equity instruments

Equity instruments issued by the company 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 company.

1.9
Taxation

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

Current tax

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

Deferred tax

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

 

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

1.10
Employee benefits

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

 

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

 

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

1.11
Retirement benefits

The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.

CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 13 -
1.12
Leases

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

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account over the duration of the agreement in equal monthly instalments.

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 leases asset are consumed.

1.13
Government grants

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

 

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

1.14

Research and development

 

Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.

 

2
Judgements and key sources of estimation uncertainty

In the application of the company’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.

CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 14 -
3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
From principal activity
22,396,581
16,800,520
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
22,396,581
16,777,309
Europe
-
23,211
22,396,581
16,800,520
2023
2022
£
£
Other revenue
Grants received
7,915
19,824
Government furlough scheme receipts
-
5,552
4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
8,900
8,500
5
Employees

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

2023
2022
Number
Number
143
122

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
5,047,360
4,060,121
Pension costs
139,120
75,512
5,186,480
4,135,633
CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 15 -
6
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Research and development costs
268,389
202,275
Government grants
(7,915)
(19,824)
Fees payable to the company's auditor for the audit of the company's financial statements
8,900
8,500
Depreciation of owned tangible fixed assets
160,121
56,725
Depreciation of tangible fixed assets held under finance leases
57,648
68,952
Loss on disposal of tangible fixed assets
3,086
-
Government furlough scheme receipts
-
(5,552)
Operating lease charges
193,083
194,467
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
2,990
8,545
Other finance costs:
Interest on finance leases and hire purchase contracts
12,721
11,987
15,711
20,532
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
791,104
593,267
Company pension contributions to defined contribution schemes
59,080
11,560
850,184
604,827

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
288,913
208,174
CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 16 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
256,580
-
0
Deferred tax
Origination and reversal of timing differences
62,848
12,783
Movement in deferred tax asset provision
96,821
53,614
Total deferred tax
159,669
66,397
Total tax charge
416,249
66,397

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:

2023
2022
£
£
Profit before taxation
1,790,121
403,128
Expected tax charge based on the standard rate of corporation tax in the UK of 21.00% (2022: 19.00%)
375,925
76,594
Tax effect of expenses that are not deductible in determining taxable profit
2,792
89
Tax effect of income not taxable in determining taxable profit
(2,674)
(3,768)
Effect of change in corporation tax rate
38,536
-
0
Group relief
-
0
134,375
Permanent capital allowances in excess of depreciation
1,670
(12,476)
Research and development tax credit
-
0
(128,417)
Taxation charge for the year
416,249
66,397
CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 17 -
10
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 August 2022
1,195,336
113,539
72,089
1,380,964
Additions
641,779
4,638
-
0
646,417
Disposals
(19,502)
(17,720)
-
0
(37,222)
At 31 July 2023
1,817,613
100,457
72,089
1,990,159
Depreciation and impairment
At 1 August 2022
345,167
49,901
15,613
410,681
Depreciation charged in the year
193,355
13,122
11,292
217,769
Eliminated in respect of disposals
(14,851)
(15,536)
-
0
(30,387)
At 31 July 2023
523,671
47,487
26,905
598,063
Carrying amount
At 31 July 2023
1,293,942
52,970
45,184
1,392,096
At 31 July 2022
850,169
63,638
56,476
970,283

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

2023
2022
£
£
Plant and machinery
262,514
308,870
Motor vehicles
45,184
56,476
307,698
365,346
11
Stocks
2023
2022
£
£
Raw materials and consumables
591,007
534,279
Finished goods and goods for resale
1,068,448
597,080
1,659,455
1,131,359
CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 18 -
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,817,153
2,528,127
Other debtors
96,517
122,014
Prepayments and accrued income
110,542
93,623
5,024,212
2,743,764
Deferred tax asset (note 17)
11,428
77,464
5,035,640
2,821,228
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
16
7,576
90,909
Obligations under finance leases
15
144,563
99,560
Trade creditors
1,792,816
1,355,866
Amounts owed to group undertakings
-
0
661,709
Corporation tax
256,580
-
0
Other taxation and social security
354,458
195,252
Government grants
19
2,250
7,915
Other creditors
1,300,000
-
0
Accruals and deferred income
1,053,036
851,977
4,911,279
3,263,188

Included within Other creditors are amounts due to a connected company, Cherrytree Bakery Holdings Limited, of £1,300,000 (2022: £Nil).

 

A balance of £661,709 was owed to this company in the previous year when both companies were in the same group.

 

The above loan is unsecured and interest-free.

 

 

14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
-
0
7,576
Obligations under finance leases
15
221,272
141,893
Government grants
19
12,750
-
0
234,022
149,469
CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 19 -
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
144,563
99,560
In two to five years
221,272
141,893
365,835
241,453

Finance lease payments represent rentals payable by the company 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. The average lease term is three years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Obligations under finance leases are secured upon the assets for which they are held.

16
Loans and overdrafts
2023
2022
£
£
Bank loans
7,576
98,485
Payable within one year
7,576
90,909
Payable after one year
-
0
7,576

The company's bank loan is secured by the Bounce Back Loan Scheme managed by the British Business Bank.

CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 20 -
17
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
243,853
150,220
-
-
Tax losses
-
-
-
73,584
Unrelieved pension contributions
-
-
11,428
3,880
243,853
150,220
11,428
77,464
2023
Movements in the year:
£
Liability at 1 August 2022
72,756
Charge to profit or loss
159,669
Lliability at 31 July 2023
232,425

The deferred tax liability set out above is expected to reverse within five years and relates to accelerated capital allowances which are expected to mature in the same period.

 

The deferred tax asset set out above is expected to reverse in the following year and relates to the utilisation of unrelieved pension contributions against the future expected profits of the same period.

18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
139,120
75,512

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 21 -
19
Government grants
2023
2022
£
£
Arising from government grants
15,000
7,915
Included in the financial statements as follows:
Current liabilities
2,250
7,915
Non-current liabilities
12,750
-
0
15,000
7,915

During the current year a grant was received to assist with the acquisition of new items of plant and equipment.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
100
100
1
1
21
Financial commitments, guarantees and contingent liabilities

The company has given a guarantee, supported by a debenture over its assets, in respect of the bank borrowings of Cherrytree Bakery Holdings Limited. At 31 July 2023 this company had an amount of £681,985 (2022: £724,482) outstanding.

22
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
243,611
189,956
Between two and five years
61,406
12,997
305,017
202,953
23
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
20,594
205,043
CHERRYTREE BAKERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 22 -
24
Related party transactions

The directors have taken advantage of the exemption available under FRS 102, Section 33.1A, not to disclose transactions with its parent company.

Transactions with related parties

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

Purchase of assets
2023
2022
£
£
Entities under the common control of Mr G J Entwistle
283,258
-
Rent payable
Management charge payable
2023
2022
2023
2022
£
£
£
£
Entities under the common control of Mr G J Entwistle
179,377
-
250,000
-

See details re Note 13 for details of the loan advanced from a connected company.

25
Ultimate controlling party

On 4 August 2022 the company became a wholly owned subsidiary of Fina Holdings Limited, a company

registered in England and Wales.

 

Fina Holdings Limited is under the sole control of the director, Mr G J Entwistle.

 

Prior to that date, the company was a wholly-owned subsidiary of Cherrytree Bakery Holdings Limited, a company also under the sole control of Mr G J Entwistle.

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