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REGISTERED NUMBER: 07469872 (England and Wales)


















STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

FOR

CGN RESTAURANTS LIMITED

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023










Page

Company Information 1

Strategic Report 2

Report of the Directors 5

Report of the Independent Auditors 10

Statement of Comprehensive Income 14

Balance Sheet 15

Statement of Changes in Equity 16

Cash Flow Statement 17

Notes to the Financial Statements 18


CGN RESTAURANTS LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2023







DIRECTORS: T M Newnes
C Newnes



REGISTERED OFFICE: C/O The Accounting Centre
First Floor
736 High Road
North Finchley
London
N12 9QD



REGISTERED NUMBER: 07469872 (England and Wales)



SENIOR STATUTORY
AUDITOR:
Andrew Green LLB FCA



AUDITORS: THP Limited
Chartered Accountants
and Statutory Auditors
34-40 High Street
Wanstead
London
E11 2RJ

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023


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

REVIEW OF BUSINESS
The Directors report that despite an improvement in turnover, significant costs pressures have lead to a fall in margins and an operating loss.

The Company's key performance indicators are as follows:

31 December 2023 31 December 2022
£ £
Turnover 52,098,148 48,144,730
Gross profit 33,377,805 31,158,650
Gross profit % 64.07% 64.72%
Operating result (385,214) (719,946)

The net assets of the Company are £109k (2022: £1,167k) at the balance sheet date, a significant
reduction due to the operating loss.


CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the nature of the company's strategy are subject to a number of risks. The Directors have set out below the principal risks facing the business.

The Directors are of the opinion that a thorough risk management process is adopted which involves a formal review of all risks identified below. Where possible, processes are in place to mitigate such risks.

Economic downturn
The success of the business is reliant on consumer spending.

In response to this continuous risk, senior management aim to keep abreast of economic conditions. In cases of severe economic downturn, marketing and pricing strategies will be modified to reflect the new market conditions.

Inflation and the cost of living crisis
Global inflationary pressures that have arisen due to recent geo-political uncertainty and the conflicts in Ukraine and the Middle East continue to represent the largest risk to the business. These pressures are seen most clearly in relation to:

Food cost inflation
The Company is continually assessing all risks that food cost inflation may bring with the aim to mitigate future threats this may have on the business.

Wage cost inflation
The Company is continually affected by wage cost inflation and pressures within the labour market. The Company monitors the market to ensure complete compliance with labour market regulations, and maintains employment policies, remuneration and benefits packages that are designed to be competitive with other companies, as well as providing employees with fulfilling career opportunities.

Utilities costs
Increasing volatility, uncertainty, cost pressures and general environmental awareness in the UK market has resulted in increased pressure on the company in recent times. To manage and help mitigate the risk associated with these pressures, the company is party to a number of Power Purchase Agreements (PPAs) for the provision of cost-effective clean energy from environmentally friendly energy sources.

Competition
The market in which the Company operates is highly competitive. As a result, the Company is subject to a high level of price sensitivities in its consumer-led market. Policies of constantly assessing our pricing strategy and ongoing market research are in place to mitigate such risks.

Liquidity risk
As a result of the positive cash flows from operating activities achieved in the year and expected in future periods, the Directors do not consider liquidity or cashflow risk to be an issue. The Company makes use of bank facilities in order to finance long term capital and refurbishment expenditure. The Directors also continually monitor cash flow forecasts in order to further manage liquidity risk.

Interest rate risk
Considering the debt profile of the Company, increases in interest rates presents a risk. The continued policy of regular rate monitoring and ongoing dialogue with our lenders are in place to help mitigate this risk.

Brexit
The areas where Brexit has impacted our business include the access and cost of both labour and food and we continue to work with our business partners to mitigate this.

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 of our control; hence, we are constantly assessing our plans in line with the current environment.


CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

SECTION 172(1) STATEMENT
The Directors of the Company, and those of all UK companies, must act in accordance with a set of general duties. These duties are set out in Section 172 of the Companies Act 2006 which are summarised as follows:

"A Director of a Company must act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its shareholders as a whole, and in doing so have regard (amongst other matters) to:

a. the likely consequences of any decisions in the long term;
b. the interests of the company's employees;
c. the need to foster the company's business relationships with suppliers, customers and others;
d. the impact of the company's operations on the community and the environment;
e. the desirability of the company maintaining a reputation for high standards of business conduct; and
f. the need to act fairly as between the shareholders of the company."

The following paragraphs summarise how the Directors fulfilled their duties:

Risk Management
As we develop as a business so does the risk environment in which we operate become more complex. It is therefore vital that we effectively identify, evaluate, manage and mitigate risks that the business may encounter. We continually evolve our approach to risk management. Details of the risks encountered by the business and the steps taken to mitigate these risks are detailed on page 3.

Our people
Our people are fundamental to the delivery and success of our operations. We aim to be a responsible employer in our approach to pay and benefits received by our employees. The health, safety and wellbeing of our people are also a major concern for the business and we try to ensure we manage and monitor these as closely as possible. For our business to succeed we need to manage our people's performance, develop and bring through talent while ensuring we operate as efficiently and as effectively as possible. For further details on our people see page 5.

Business Relationships
In order to grow and develop our business we need to grow and develop our business relationships with our suppliers and strategic partners. This includes working with these partners so that we can deliver for the customers and communities we serve.

Community and Environment
It is important to the business that we interact responsibly with the communities in which it operates and the wider environment. We try to ensure we are as involved as much as possible in the local activities and work closely with local bodies to ensure that the community is best served. We try where possible to minimise our impact on the environment.

High Standards of Business Conduct
It is important to the business that we apply high standards of conduct in all areas in which we operate. This principle is closely monitored by the board and wider management team making sure the business behaves in a responsible manner in all activities it undertakes.

Shareholders
As this is an owner managed business there is inherently an alignment between the goals of the management and the shareholders.

ON BEHALF OF THE BOARD:





C Newnes - Director


13 September 2024

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2023


The directors present their report with the financial statements of the company for the year ended 31 December 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of operating quick service restaurants.

GOING CONCERN
The Company continued to generate significant operating cash flows and continued to increase operations year-on-year. Despite this, the balance sheet as at 31 December 2023 shows a net current liability position of £6,292,942 (2022: £4,732,757) due to significant investments in its restaurants during the past number of years.

The Company continues to meet its day to day working capital requirements through operating cash flows and finances all significant refurbishments via bank finance. The Company is also able to draw on the support of the franchisor to assist with cashflow requirements as required.

Having considered all the relevant facts the Directors consider it is appropriate to prepare the financial statements on a going concern basis.

DIVIDENDS
Interim dividends of £456,836 (2022: £430,293) were paid during the year. The Directors do not recommend payment of a final dividend.

FUTURE DEVELOPMENTS
The Directors are confident that continued focus on the key management policies will strengthen the financial position of the company during the ensuing year.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

T M Newnes
C Newnes

ENGAGEMENT WITH EMPLOYEES
The company does not discriminate between employees or potential employees on grounds of colour, race, ethnic or national origin, sex, disability, age, marital status or religious beliefs. Full consideration is given to applications for employment from those with disabilities who are able to demonstrate that they have the necessary abilities.

The importance of staff training, equal opportunity, health and safety, environmental matters and the avoidance of sexual harassment is recognised at all levels and is monitored on a regular basis by committees chaired by a director or senior manager reporting directly to the Board.

The company gives full and fair consideration to applications for employment from those with disabilities. In the event of employees becoming disabled whilst in service of the company, every effort is made to continue their employment by transfer to alternative duties, if required and by provision of such retraining as is appropriate.


CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2023

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS
Suppliers
As part of a wider business network, we primarily utilise established supply chains who manage many of our suppliers on our behalf. We are proud supporters of British and Irish agriculture and work with over 23,000 British and Irish farmers who supply quality produce for our menu, as well as businesses who help us create more sustainable packaging. Through this extensive supply chain across the UK and Ireland, enables our suppliers contribute to our success.

We have long-term partnerships with many of our suppliers. Such long-term partnerships encourage collaboration and enable suppliers to make decisions for the long term, giving them the confidence to invest in their businesses. In order to meet our continued volume growth, suppliers need to invest in future capacity, which involves significant capital investment in equipment and infrastructure. Long-term commitment to supply our company in the UK, has enabled our suppliers to grow with us and drive positive change within their own businesses. The wider Supply Chain and Sustainability function that the company is part of has a broad remit, from ensuring our products and ingredients meet our high food safety, quality and traceability expectations from farm to front counter, to the transportation of goods from supplier to restaurant, procurement of all food and paper, as well as responsibility for our nutrition, sustainability, agriculture, packaging and recycling strategies across our supply base.

Customers
Our customers are at the heart of everything we do. We acknowledge the importance of keeping our customers engaged with our business. As part of a wider franchise network we are able to utilise established customer communication channels, as well as our own tailored channels, to effectively communicate with our customers.

The Local Community
The Company recognises its responsibility to the wider community in which its restaurants are based. We actively take part in community events and work with local representative bodies that help promote the areas in which the stores operate.

STREAMLINED ENERGY AND CARBON REPORTING
Summary
In line with the government's streamlined energy and carbon reporting requirements we are required to report our organisation's carbon emissions for the period 1st January 2023 to 31st December 2023. The year ended 31 December 2022 was the first year that the company has reported.

Our emissions are reported using the financial control boundary and the methodology used aligns with Defra's Environmental reporting guidelines (2019) and uses the UK government's greenhouse gas reporting conversion factors (2023) to quantify emissions. The total greenhouse gas emissions, reportable under SECR from 1st January 2023 - 31st December 2023, were 1,392 tonnes of carbon dioxide equivalent (tCO2e). These include emissions associated with electricity, natural gas and transport consumption. The number of sites contributing to this report has not changed from 2022 to 2023. The total greenhouse gas emissions increased by 17% compared to revised 2022 figures, because purchased electricity energy consumption (kWh) has increased by 8% and natural gas energy consumption (kWh) has increased by 41%, from 2022 to 2023.

Notable factors that could have contributed to the movement in emissions are as follows:
- Increase in productivity (8% increase in revenue) which translated to an increase in total energy consumption.
- Revision of methodology to align consumption to the franchisor's AI Track energy consumption figures for FY 2023.
- The carbon intensity of the grid electricity increased in 2023 for the first time in a few years, by 7%.
- The methodology for calculating electricity emissions was adjusted to reflect good practice for the inclusion of electrical transport and distribution of losses (T&D losses) under the SECR regulations.

As per SECR guidelines, our emission intensity is calculated as the ratio of annual emissions (tCO2e) to the turnover (in £million). For FY 2023, this resulted in an emission intensity of 27.10 tCO2e per £million, which represents a 8% increase compared to the previous year (25.15 tCO2e per £million).





CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2023

Greenhouse gas emissions

Greenhouse gas emissions by year (tCO2e) – location-based


Emissions source

2023
2022
(revised*

)

% Share
%
Change

Electricity 1,286 1,114 92% 15%
Natural Gas 88 62 6% 41%
Transportation - direct 16 17 1% (2% )
Transportation - indirect 2 2 0.1% (2% )
Total Emissions (tCO2e) 1,392 1,194 100% 17%
Turnover (£m) 52 48 - 8%
Intensity (tCO2e per £m) 26.77 24.88 - 8%

(Location-based reporting uses a national carbon emissions factor to calculate the emissions from the generation of electricity, reflecting the diverse source of electricity generation supplied to the national grid.)

*The emissions reported for electricity in 2022 has been revised to include Transmission and Distribution losses (T&D) UK Greenhouse Gas Conversion Factors (publishing.service.gov.uk)

Greenhouse gas emissions by scope (tonnes CO2e) - location-based

Emissions source Scope 1 Scope 2 Scope 3 Total

Electricity - 1,184 102 1,286
Natural Gas 88 - - 88
Transportation 16 - 2 18
Total Emissions (tCO2e) 104 1,184 104 1,392
Share of Total 6.4% 86.1% 7.5% 100%

Scope 1: Natural gas and purchased fuel (LPG). Scope 2: Electricity (generation). Scope 3: Losses from electricity distribution and transmission (T&D). This only includes emissions reportable under SECR and may not reflect the entire carbon footprint of the organisation.

Energy consumption

Energy consumption per fuel type (kWh)


Emissions source

2023
2022
(revised*

)

% Share
%
Change
Electricity 5,715,789 5,276,262 91% 8%
Natural Gas 480,006 341,490 8% 41%
Transportation - direct 67,611 68,047 1% (1% )
Transportation - indirect 6,786 6,830 0.1% (1% )
Total Emissions (tCO2e) 6,270,193 5,692,629 100% 10%

Greenhouse Gas (GHG) Reporting Methodology Statement

Reporting Period
Emissions are reported against accounting year covering the period 1st January to 31st December 2023.

Boundary, methodology and exclusions
An 'operational control' approach has been used to define the Greenhouse Gas emissions boundary.

This approach captures emissions associated with operations in the restaurants. This report covers UK operations only, as required by SECR for Non-Quoted Large Companies.

This information was collected and reported in line with the methodology set out in the UK Government's Environmental Reporting Guidelines, 2019.


CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2023

Emissions have been calculated using the latest conversion factors provided by the UK Government. No other material omissions from the mandatory reporting scope. For Refrigerant emissions, GWP conversion factors have been used (High-GWP Refrigerants | California Air Resources Board, Greenhouse Gas Inventory Guidance: Fugitive Emissions (epa.gov).

The company's 2022 electricity emissions have been revised. This update and the inclusion of Transport and Distribution factors for emissions calculation is to reflect good practice in UK reporting as detailed in the GHG Conversion Factors: Greenhouse gas reporting: conversion factors 2023 - GOV.UK (www.gov.uk). This revision also incorporates updated conversion factors.

Energy consumption (in kWh) for periods 1st January 2023 - 31st December 2023 have been used to calculate emissions for FY2023, ending in December 2023.

2023 consumption data from Franchisor's AI Track were used for the gas, electricity, purchased fuel and refrigerants figures. Gas and electricity consumption includes extrapolation carried out by Aligned Incentives.

Energy efficiency initiatives
The company has continued to seek and progress energy efficiency measures, within both the work processes and the use of work equipment. The franchisor is actively taking part in mandatory compliance schemes, such as the Energy Savings Opportunity Scheme, TCFD and considering the implementation of recommendations outlined in the ESOS audit reports.

The following approaches to energy efficiency are being undertaken by the franchisor and will be
expanded over the following years:
- Baselining resource use by bringing online increased effort to collate the data on a range of resources
- Implementation Strategy being developed and deployed to create significant energy and carbon
reduction
- Engagement Strategy with the Supply chain to reduce the associated emissions further
- Developing Metrics and Targets to reflect performance across our portfolio at the most granular level
and more in depth data tracking of the use of resources
- Governance including Board oversight, culture, training and incentives being developed.

DISCLOSURE IN THE STRATEGIC REPORT
The Company has chosen to make disclosures in relation to financial risk management and other matters considered to be of strategic importance which would otherwise be in the Directors report 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.

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2023


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, THP Limited, will be proposed for re-appointment.

ON BEHALF OF THE BOARD:





C Newnes - Director


13 September 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CGN RESTAURANTS LIMITED


Opinion
We have audited the financial statements of CGN Restaurants Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement 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 2023 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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CGN RESTAURANTS LIMITED


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 eight, 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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CGN RESTAURANTS LIMITED


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:

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 the directors
and other management, and from our commercial knowledge and experience of the sector in which the company operates;
- 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, taxation legislation and data protection, anti-bribery, employment, environmental, food hygiene and health and safety legislation;
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

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

To address the risk of fraud through management bias and override of controls, we:
- performed analytical procedures to identify any unusual or unexpected relationships;
- tested journal entries to identify unusual transactions;
- assessed whether judgements and assumptions made in determining the accounting estimates set out in note 3 were indicative of potential bias; and
- investigated the rationale behind significant or unusual transactions.

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 and any other relevant regulators as required.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, 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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CGN RESTAURANTS LIMITED


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 Green LLB FCA (Senior Statutory Auditor)
for and on behalf of THP Limited
Chartered Accountants
and Statutory Auditors
34-40 High Street
Wanstead
London
E11 2RJ

13 September 2024

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023 2022
Notes £    £   

TURNOVER 52,098,148 48,144,730

Cost of sales 18,720,343 16,986,080
GROSS PROFIT 33,377,805 31,158,650

Administrative expenses 33,763,019 31,878,596
OPERATING LOSS 5 (385,214 ) (719,946 )


Interest payable and similar expenses 6 300,573 152,254
LOSS BEFORE TAXATION (685,787 ) (872,200 )

Tax on loss 7 (84,889 ) (55,400 )
LOSS FOR THE FINANCIAL YEAR (600,898 ) (816,800 )

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

BALANCE SHEET
31 DECEMBER 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 9 5,933,381 6,375,143
Tangible assets 10 3,221,066 4,363,575
Investments 11 12,500 12,500
9,166,947 10,751,218

CURRENT ASSETS
Stocks 12 253,468 261,021
Debtors 13 355,373 755,478
Cash at bank 1,080,777 607,911
1,689,618 1,624,410
CREDITORS
Amounts falling due within one year 14 7,982,560 6,357,167
NET CURRENT LIABILITIES (6,292,942 ) (4,732,757 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

2,874,005

6,018,461

CREDITORS
Amounts falling due after more than
one year

15

(2,378,209

)

(4,355,548

)

PROVISIONS FOR LIABILITIES 18 (386,715 ) (496,098 )
NET ASSETS 109,081 1,166,815

CAPITAL AND RESERVES
Called up share capital 19 100 100
Retained earnings 20 108,981 1,166,715
SHAREHOLDERS' FUNDS 109,081 1,166,815

The financial statements were approved by the Board of Directors and authorised for issue on 13 September 2024 and were signed on its behalf by:





C Newnes - Director


CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 January 2022 100 2,413,808 2,413,908

Changes in equity
Dividends - (430,293 ) (430,293 )
Total comprehensive income - (816,800 ) (816,800 )
Balance at 31 December 2022 100 1,166,715 1,166,815

Changes in equity
Dividends - (456,836 ) (456,836 )
Total comprehensive income - (600,898 ) (600,898 )
Balance at 31 December 2023 100 108,981 109,081

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 22 3,321,984 2,349,173
Interest paid (300,573 ) (152,254 )
Tax paid 315,407 (473,335 )
Net cash from operating activities 3,336,818 1,723,584

Cash flows from investing activities
Purchase of intangible fixed assets (24,512 ) (30,000 )
Purchase of tangible fixed assets (294,168 ) (1,489,334 )
Purchase of fixed asset investments - (1,250 )
Net cash from investing activities (318,680 ) (1,520,584 )

Cash flows from financing activities
New loans in year - 1,377,000
Loan repayments in year (2,088,436 ) (2,006,000 )
Equity dividends paid (456,836 ) (430,293 )
Net cash from financing activities (2,545,272 ) (1,059,293 )

Increase/(decrease) in cash and cash equivalents 472,866 (856,293 )
Cash and cash equivalents at
beginning of year

23

607,911

1,464,204

Cash and cash equivalents at end
of year

23

1,080,777

607,911

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023


1. STATUTORY INFORMATION

CGN Restaurants 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. STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3. ACCOUNTING POLICIES

Basis of preparing the financial statements
The financial statements have been prepared under the historical cost convention.

Going Concern
The Company continued to generate significant operating cash flows and continued to increase operations year-on-year. Despite this, the balance sheet as at 31 December 2023 shows a net current liability position of £6,292,942 (2022: £4,732,757).

The Company continues to meet its day to day working capital requirements through operating cash flows and finances all significant refurbishments via bank finance. The Company is also able to draw on the support of the franchisor to assist with cashflow requirements as required.

Having considered all the relevant facts the Directors consider it is appropriate to prepare the financial statements on a going concern basis.

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


3. ACCOUNTING POLICIES - continued

Significant judgements and estimates
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

a) Critical judgements in applying the entity's accounting policies

There are no specific judgements, apart from those involving estimates as detailed below, that management has made in the process of applying the entity's accounting policies that have a significant effect on the amounts recognised in the financial statements.

b) Critical accounting estimates and assumptions

(i) Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful 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.

(ii) Useful economic live of intangible assets

Intangible assets are amortised over their useful economic lives and are assessed annually for indications of impairment.

iii) Treatment of significant capital projects

The allocation of store refurbishment expenditure between capital and revenue is an area that requires judgement on the part of management. Costs are allocated in line with the asset recognition contained within FRS102 and on the basis of all available evidence as to their nature. The management uses professional advisors to assist them with this process.

Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied, net of returns, discounts and value added taxes.

Sales of goods are recognised on sale to the customer, which is considered to be the point of sale and when the significant risks and rewards of the goods have been passed to the customer.

Franchise rights and franchise fees
Franchise rights and fees are amortised over the period of the franchise agreement.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery-Straight line over 7 years
Fixtures and fittings -Straight line over 5 years

Motor Vehicles

-

Straight line over 3 years

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


3. ACCOUNTING POLICIES - continued

Stocks
Stock is stated at the lower of cost and selling price less costs to complete and sell, after making due allowance for obsolete and slow moving items. Stocks are recognized as an expense in the period in which the related revenue is recognized.

Cost is determined on the first-in, first-out (FIFO) method. Cost includes the purchase price, including taxes and duties, transport and handling directly attributable to bringing the stock to its present location and condition.

Financial instruments
The company has chosen to adopt Sections 11 and 12 of FRS102 in respect of financial instruments.

Basic financial instruments are initially recognised at transaction value and subsequently carried at this value less any provision for impairment.

Cash and cash equivalents
Cash and cash equivalents in the balance sheet represent cash at bank and in hand.

Short-term debtors and creditors
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in profit or loss under operating expenses.

The carrying value of all short-term financial assets and liabilities are measured at amortised cost.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, 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 taxation
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.

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


3. ACCOUNTING POLICIES - continued

Pension costs and other employment costs
(i) Holiday pay

Holiday pay entitlements (where material) are recognised as an expense in the period in which the service is received.

(ii) Pension Scheme

The company operates a defined contribution pension scheme for its employees. The contributions are recognised as an expense when they are due. Amounts not paid are shown as a creditor on the balance sheet. The assets of the scheme are held separately from the company in independently administered funds.

Leasing commitments
The company's restaurant premises are leased from the franchisor under a non-cancellable lease with an expiry term of more than five years. The rental payments are calculated on a monthly basis and are substantially based on annual sales income generated.

The interest element of these obligations is charged to the Profit and Loss over the relevant period. The capital element of future payments is treated as a liability.

Borrowing costs
All borrowing costs are recognised in the Profit and Loss Account in the period in which they are incurred.

Provisions for liabilities
Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

Provisions are charged as an expense to the Profit and Loss Account in the year that the company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

4. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 14,181,622 12,905,562
Social security costs 618,837 592,543
Other pension costs 121,593 136,029
14,922,052 13,634,134

The average number of employees during the year was as follows:
2023 2022

Restaurant Team 1,174 1,152
Management 56 55
1,230 1,207

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


4. EMPLOYEES AND DIRECTORS - continued

2023 2022
£    £   
Directors' remuneration 112,740 49,635

5. OPERATING LOSS

The operating loss is stated after charging:

2023 2022
£    £   
Depreciation - owned assets 1,436,677 1,337,866
Franchise rights amortisation 455,774 453,647
Franchise fees amortisation 10,500 9,000
Auditors' remuneration 6,800 6,300

The Directors of the Company are also its "key management" for the purposes of disclosure under FRS 102.

6. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank interest 300,573 152,254

7. TAXATION

Analysis of the tax credit
The tax credit on the loss for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax 24,494 (315,407 )
Under/(over) provision in
prior year - 1,407
Total current tax 24,494 (314,000 )

Deferred tax (109,383 ) 258,600
Tax on loss (84,889 ) (55,400 )

UK corporation tax has been charged at 23.50% (2022 - 19%).

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


7. TAXATION - continued

Reconciliation of total tax credit 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:

2023 2022
£    £   
Loss before tax (685,787 ) (872,200 )
Loss multiplied by the standard rate of corporation tax in the UK
of 23.508% (2022 - 19%)

(161,215

)

(165,718

)

Effects of:
Expenses not deductible for tax purposes (4,064 ) (2,596 )
Capital allowances in excess of depreciation - (147,093 )
Depreciation in excess of capital allowances 191,839 -
Adjustments to tax charge in respect of previous periods (374 ) 1,407
Deferred tax (109,383 ) 258,600
Marginal relief (1,692 ) -
Total tax credit (84,889 ) (55,400 )

Deferred tax has been provided at 25% (2022: 25%).

8. DIVIDENDS
2023 2022
£    £   
Ordinary A shares of £1 each
Interim 342,627 215,146
Ordinary B shares of £1 each
Interim 114,209 215,147
456,836 430,293

9. INTANGIBLE FIXED ASSETS
Franchise Franchise
rights fees Totals
£    £    £   
COST
At 1 January 2023 9,072,937 210,000 9,282,937
Additions 24,512 - 24,512
At 31 December 2023 9,097,449 210,000 9,307,449
AMORTISATION
At 1 January 2023 2,850,796 56,998 2,907,794
Amortisation for year 455,774 10,500 466,274
At 31 December 2023 3,306,570 67,498 3,374,068
NET BOOK VALUE
At 31 December 2023 5,790,879 142,502 5,933,381
At 31 December 2022 6,222,141 153,002 6,375,143

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


10. TANGIBLE FIXED ASSETS
Plant,
machinery
and Motor
fixtures vehicles Totals
£    £    £   
COST
At 1 January 2023 11,010,488 10,549 11,021,037
Additions 294,168 - 294,168
At 31 December 2023 11,304,656 10,549 11,315,205
DEPRECIATION
At 1 January 2023 6,653,726 3,736 6,657,462
Charge for year 1,434,040 2,637 1,436,677
At 31 December 2023 8,087,766 6,373 8,094,139
NET BOOK VALUE
At 31 December 2023 3,216,890 4,176 3,221,066
At 31 December 2022 4,356,762 6,813 4,363,575

11. FIXED ASSET INVESTMENTS
Unlisted
investments
£   
COST
At 1 January 2023
and 31 December 2023 12,500
NET BOOK VALUE
At 31 December 2023 12,500
At 31 December 2022 12,500

12. STOCKS
2023 2022
£    £   
Stocks 253,468 261,021

13. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade debtors 142,245 241,667
Other debtors 5,625 3,021
Corporation tax recoverable - 315,407
Prepayments and accrued income 207,503 195,383
355,373 755,478

Balances owed at the year end from third party delivery partners have been classified as trade debtors.

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Bank loans and overdrafts (see note 16)
1,881,700

1,992,797
Trade creditors 2,799,810 1,575,884
Corporation tax 24,494 -
Social security and other taxes 1,330,050 1,016,620
Other creditors 269,031 25,175
Accrued expenses 1,677,475 1,746,691
7,982,560 6,357,167

15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
2023 2022
£    £   
Bank loans (see note 16) 2,378,209 4,355,548

16. LOANS

An analysis of the maturity of loans is given below:

2023 2022
£    £   
Amounts falling due within one year or on demand:
Bank loans - less than 1 year 1,881,700 1,992,797

Amounts falling due between one and two years:
Bank loans 1,437,192 1,992,796

Amounts falling due between two and five years:
Bank loans - 2-5 years 941,017 2,362,752

The bank loans are repayable over a total period of 7 years from inception at a floating rate of up to 2.15 % above base rate. No security has been given.

17. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
2023 2022
£    £   
Within one year 1,066,956 1,066,956
Between one and five years 4,267,824 4,267,824
In more than five years 8,684,744 9,766,519
14,019,524 15,101,299

The above amounts relate to annual commitments to pay a base rent for leased trading premises.

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


18. PROVISIONS FOR LIABILITIES
2023 2022
£    £   
Deferred tax
Accelerated capital allowances 386,715 496,098

Deferred
tax
£   
Balance at 1 January 2023 496,098
Provided during year (109,383 )
Balance at 31 December 2023 386,715

19. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
75 Ordinary A £1 75 75
25 Ordinary B £1 25 25
100 100

The A and B shares rank equally in all respects, except that they constitute different classes of share for dividend purposes.

20. RESERVES
Retained
earnings
£   

At 1 January 2023 1,166,715
Deficit for the year (600,898 )
Dividends (456,836 )
At 31 December 2023 108,981

21. ULTIMATE CONTROLLING PARTY

The ultimate controlling party is C Newnes.

22. RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
2023 2022
£    £   
Loss before taxation (685,787 ) (872,200 )
Depreciation charges 1,902,951 1,800,513
Finance costs 300,573 152,254
1,517,737 1,080,567
Decrease/(increase) in stocks 7,553 (110,090 )
Decrease/(increase) in trade and other debtors 84,698 (230,276 )
Increase in trade and other creditors 1,711,996 1,608,972
Cash generated from operations 3,321,984 2,349,173

CGN RESTAURANTS LIMITED (REGISTERED NUMBER: 07469872)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023


23. 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 2023
31.12.23 1.1.23
£    £   
Cash and cash equivalents 1,080,777 607,911
Year ended 31 December 2022
31.12.22 1.1.22
£    £   
Cash and cash equivalents 607,911 1,464,204


24. ANALYSIS OF CHANGES IN NET DEBT

At 1.1.23 Cash flow At 31.12.23
£    £    £   
Net cash
Cash at bank 607,911 472,866 1,080,777
607,911 472,866 1,080,777
Debt
Debts falling due within 1 year (1,992,797 ) 111,097 (1,881,700 )
Debts falling due after 1 year (4,355,548 ) 1,977,339 (2,378,209 )
(6,348,345 ) 2,088,436 (4,259,909 )
Total (5,740,434 ) 2,561,302 (3,179,132 )