The directors present the strategic report for the year ended 31 December 2024.

The Directors are pleased with the ongoing growth of the business during 2024, with new customers and new product areas coming on board. Material inflation and a very competitive labour market are the main problems facing the business. The aim remains to address these issues by focussing on cost control, building on the successful growth of the business and investing in its employee offering.

In terms of managing risk, the business constantly reviews its sales profile. The Directors are strategically addressing the impact of the seasonal nature which the Christmas period brings by targeting a greater balance of year-round business. The fact that it operates strongly in supermarket retail and food service provides a good blend of business and the Directors are mindful of the need to maintain the most appropriate mix across its operations. Investment in its Main Bakery facility will lead to streamlining of its processes and allow a smoother flow of production throughout the year in order to satisfy the seasonal demand.

Through a variety of measures, the business has built on its reputation as a local employer of choice.

Cash generated from its operations continues to be re-invested both for future growth, continued diversification and improvement in productivity. Notably the company has invested in its plant to meet the demands of its growing sales base.

The ongoing strategic development of its We Love Cake brand is ahead of schedule. The brand is now listed in 5 of the main UK supermarkets. Through ongoing innovation plans are in place to continue the Brands penetration into wider product areas.

The business continues to work with its stakeholders in a very transparent manner to ensure excellent customer service at the right price.

The key performance indicators used to monitor the business are as follows:

Bells of Lazonby continues to place the highest emphasis on Innovation at the heart of their operations along with quality, service, the flexibility of production techniques and speedy decision-making which is a hallmark of family businesses.

The company pursues strong policies and practices towards its environmental sustainability responsibilities. Further to recent investments in Solar Panels, the business has made further investments in converting oil-powered machinery to electric powered, contracting renewable-only electricity and investing in heat recovery from equipment to be used to warm water required for washing facilities. Its commitment to supporting its local community continues.

The business is pleased to have secured ownership of the field adjacent to the site, and to have secured the necessary planning permissions to provide further space and opportunity for the development of the business long into the future.

Bells of Lazonby is a family-owned local business operating on a national and international scale.

As such the Board ensures the business keeps its local identity and family roots whilst operating to the standard demanded for a global food manufacturer. To this end the company exercises the highest standards of Corporate Governance.

The business continues to successfully grow through strong relationships with its external stakeholders (customers, suppliers) whilst aspiring to be an employer of first choice in its local community.

Our customers

Exemplary service levels and product quality drives the business. In a period of high-cost uncertainty, it is the companies value for money proposition which drives the business to both increase its turnover with existing customers and attract new business opportunities.

Communication with our customers is not just though our sales team but is ingrained at every level of a Business-to-Business relations. One to one departmental relationship is nurtured across all our customer base. This benchmark of engagement is key to our success.

The business processes continue to achieve the highest standards when reviewed by unannounced Customer audits as well as maintaining its Class AA* BRC status.

Our Suppliers

In markets that demand high degree of technical food safety knowledge it is essential our industry respected technical team remains at the forefront of collaborative information sharing with our supply base. Furthermore, with complex international logistic forces being closer to our supplier is more key than ever. To that end the company continues to improve its planning and transparency of requirements with suppliers. As the business grows the Company is committed to resourcing to improve both its purchasing and logistic operations to ensure regular dedicated points of contact.

Our Colleagues

Communication is key to a large organisation. All employees are briefed monthly of the company’s progress and key visits. It is pleasing to report of continual customer feedback from site visits of the high level of staff motivation and engagement.

On a regular basis the directors provide staff briefings to the entire workforce, providing updates on business performance and priorities. This enables a team spirit and assurance of the secureness of the business to be fostered within the workforce.

On an individual basis employees can access mental and physical wellbeing support.

Our Shareholders

The business is 100% owned by the Bells family and the recently aligned structure bringing on board the third generation of family members. The owners sit with the Operating Directors of the business on a quarterly basis. A system of 12 month rolling forecasts are discussed each quarter to review growth, profitability, investments and cashflow. This process engages the shareholders and enables understanding of how the business is currently performing and so provide confidence of the company’s ongoing direction.

Our communities and society

The Companies Social Responsibility strategy is to engage with the rural community of Lazonby and surrounding areas. For example, close ties with the local school. As a growing manufacturing site, it is essential the company continues its good neighbourhood relations on matters such as noise pollution, Car parking, local cleanliness, and traffic management.

In addition charities are supported throughout Cumbria and from time-to-time support is also given to Client-driven charities. Our CSR strategy also includes a commitment to reducing our impact on the Environment.

On behalf of the board

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

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

The directors present their annual report and financial statements for the year ended 31 December 2024.

The principal activity of the company and group continued to be that of wholesale bakers of cakes and confectionery in traditional and free from categories to national supermarkets, food service and export customers. The company acted as holding company.

The results for the year are set out on page 11.

Ordinary dividends were paid amounting to £13,500. The directors do not recommend payment of a further dividend.

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

The company is committed to the continued investment in equipment and technology during the forthcoming year.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The group's policy is to consult and discuss with employees, through a variety of forums and at meetings, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

The auditor, MHA, previously traded through the legal entity MacIntyre Hudson LLP. In response to regulatory changes, MacIntyre Hudson LLP ceased to hold an audit registration with the engagement transitioning to MHA Audit Services LLP.

MHA will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

In the year we took the following energy efficiency actions. There has been a significant increase in activity at the factory 2024 vs 2023. Significant investments continue to be made to enable the business to be more environmentally sustainable.

This has lead to a significant reduction in the factory’s carbon footprint per tonne of production in 2024.

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2024 UK Government’s Conversion Factors for Company Reporting

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per tonnes produced, the recommended ratio for the sector.

Continuous Energy Improvements Projects conducted during Y2024 were:

1. The conversion of a prover to electric powered rather than oil.

2. This enabled the removal of the highest remaining user of kerosene - the steam boiler.

3. Moving all of our bought-in electricity contract to 100% renewable energy.

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

We have audited the financial statements of Bells Of Lazonby Holdings 2020 Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2024 and of the group's profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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

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

• the parent company financial statements are not in agreement with the accounting records and returns; or

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

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

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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:

• enquiring of management and those charged with governance of any actual and potential litigation and claims;

• reviewing the financial statement disclosures and testing of supporting documentation to assess compliance with the relevant laws and regulations;

• assessing whether the judgements made in making accounting estimates are indicative of any potential bias;

• auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business; and

• auditing the risk of fraud in revenue, including through the testing of the cut off of income at the year end and sales transaction testing to ensure revenue is complete in the financial statements and recognised in the correct accounting period.

Because of the industry in which the company operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and safety, food standards regulations, compliance with BRC certifications, employment law, and compliance with the Companies Act.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £25,939 (2023 - £28,662 profit).

Bells Of Lazonby Holdings 2020 Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Edenholme Bakery, Lazonby, Penrith, CA10 1BG.

The group consists of Bells Of Lazonby Holdings 2020 Limited and all of its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006. These are the first set of company and consolidated accounts produced for the group.

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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company Bells Of Lazonby Holdings 2020 Limited together with all entities controlled by the parent company (its subsidiaries). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Bells of Lazonby (Holdings) Limited and Bells of Lazonby Limited have been included in the group financial statements using the purchase method of accounting. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.

The group meets its funding requirements by means of working capital and cash balances. The directors have reviewed the impact of the cost of living crisis and are satisfied that the business has the financial strength to work through the current crisis. The business has a strong balance sheet and a healthy cash reserve. Various scenarios of turnover by customer have been modelled and new opportunities assessed supported by regular customer contact and feedback. Detailed cashflow forecasts have been worked through for a wide range of eventualities. On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis.

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

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 15 years as, in the opinion of the directors, this represents the period over which the goodwill is expected to give rise to economic benefits.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Equity investments are not publicly traded and their fair value cannot be measured reliably. Such assets are therefore recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including creditors, loans and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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

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

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

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.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

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

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

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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

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

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

Investment property held in the financial statements are held at fair value. The directors have used their judgement to determine this fair value using a recent valuation and by reference to the market value of similar properties in the local area. The directors made an annual assessment of the fair value and do not consider there to be a material change in value to that presented in the financial statements.

Typically there is a general bad debt provision at year end based upon the knowledge that they have accumulated over the trading relationship with each individual customer. The directors then take into account any other external information that comes to their attention such as customers going into liquidation. The directors then estimate the impairment provision required to be made in the financial statements

The directors review the stock listing on a monthly basis and analysed the balance on any slow moving products that are due for expiry. The days to expiry is calculated and compared against the typical days to sell. If it looks likely that the product will expire before it is sold, the directors then estimate the impairment provision required to be made in the financial statements.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 4).

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:

Included within freehold land & and buildings is non depreciable land of £435,250 (2023: £Nil)

Details of the company's subsidiaries at 31 December 2024 are as follows:

Included within other borrowings is £905,000 (2023: £1,165,000) which relates to two pension scheme loans, £525,000 (2023: £825,000) which relates to a CBIL bank loan and £7,172,015 (2023: £7,077,231) which relates to loans from shareholders.

The first pension scheme loan is secured by fixed charges over the following properties which are owned by another group entity:

• 12 Middlegate, Penrith, Cumbria, CA11 7PG

• Edenholme Bakery Office Building, Lazonby, Penrith, Cumbria, CA10 1BX

The second pension scheme loan is secured by fixed charges over the following properties which are owned by another group entity:

• Passenger Station / Business Centre, Lazonby, Penrith, Cumbria, CA10 1BX

• Gluten Free Bakery, Lazonby, Penrith, Cumbria, CA10 1BX

The CBIL bank loan is secured by a debenture granted by the company in favour of Barclays Bank Plc.

Shareholder loans are secured by a debenture creating a fixed and floating charge over freehold, leasehold and commonhold property of the company. They are due to be paid in quarterly instalments over a 10 year period with the final payment being due on 31 December 2030. The interest rate on these loans is 4% over the Bank of England rate per annum, except where waived by the directors in accordance with the agreement.

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

The directors do not expect a material movement in deferred tax within the next 12 months.

Deferred income is included in the financial statements as follows:

The government grants relate to capital grants which are being recognised under the accruals model. The grants are amortised in line with the useful economic life of the related assets.

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

The other reserve represents a merger relief reserve arising from the restructure that occurred within the prior year.

Cumulative profit and loss net of distribution to owners.

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

The operating leases represent leases to third parties.

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

Amounts contracted for but not provided in the financial statements:

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

The following amounts were outstanding at the reporting end date: