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

The directors believe they have acted in a way they consider, in good faith, to promote the success of the company for the benefit of its members as a whole (having regard to stakeholders and matters set out in s172(1) (a-f) of the Companies Act).

The success of the company is the driving factor behind the decisions made by the directors. Decision making processes are structured to enable the directors to evaluate the merit of proposed business activities and the likely consequences of its decisions over the short, medium and long term.

Our employees

Our people are key to our success. That is why we work hard to create jobs and opportunities for all our people, regardless of gender, age or life stage. Understanding how our people feel about McDonald's is vital. It helps us ensure that we are giving them the right support to achieve their potential and to serve our customers well. We undertake quarterly surveys with restaurant crew and managers to drive the conversation about how they feel at work. We also conduct regular “Love to Listen” surveys to check how satisfied our employees are with their jobs.

Our customers

Our customers are the reason for our existence, and we therefore strive to provide high quality food and superior service, in a clean, welcoming environment, at a great value.

Our suppliers

Long-term commitments with our suppliers has enabled them to grow with us and drive positive change within their own businesses. The company recognises that relationships with suppliers are important to its long-term success and is briefed on supply feedback and issues on a regular basis.

Communities and environment

The directors carefully consider the impact of the business on communities and the environments in which the company operates. We support charitable organisations such as Ronald McDonald House Charities. We collect litter dropped in the local area around our restaurants. Recycling units are installed around our restaurants and our paper cups are sent to specialist recycling centres in the UK. Our paper straws are 100% recyclable. Our cooking oil is recycled to convert it to biodiesel. We are aware of our responsibility in this area, and 2025 will see the introduction of more initiatives to help make local communities and the environment a better place.

Business conduct

In all our activities the directors require that our employees and suppliers conduct business with the highest ethical and professional standards by adhering to our Standards of Business Conduct set by McDonald's Corporation.

Business Review

The directors aim to present a review of the development and performance of the company during the year and its position at the year-end. This review is consistent with the size and nature of the company and is written in the context of risks and uncertainties it faces.

The principal activity of the company during the year was as a McDonald's franchise, the company operated fifteen restaurants during this financial year, a further store was acquired in this year, no changes have taken place in the use of the premises.

We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these including turnover, gross profit and operating profit.

Sales through digital channels, including McDelivery, mobile apps and self-order kiosks have increased during the year with customers increasingly looking for greater speed and choice when ordering food. McDonald's are constantly elevating the digital experience with varying promotions offered via the mobile app in 2024 and the company continues to push digital and delivery offerings.

The profit for the year before taxation amounted to £1,400,397 (2023 £1,858,274), a decrease of £457,877.

Turnover comprises sales from company franchised restaurants. During the year total company turnover increased by £453,585 to £71,488,063.

Gross profit as a percentage of sales is 67.25%. This has been maintained by continually reviewing prices to reduce the impact of food cost inflation, whilst still offering great value and quality. The lower than expected supply chain inflation across 2024 resulted in an improved gross profit margin.

The directors believe that the trading environment in which the company operates will continue to be challenging but remain optimistic regarding future trading and are committed to increasing both future turnover and profitability and to continuing the company's reinvestment program.

Given the straightforward nature of the business, the directors are of the opinion that further analysis using key performance indicators is not necessary for an understanding of the development, performance or position of the company.

It is the strategy of the company to refurbish restaurants periodically to keep them fresh and inviting to our customers. The company continued to benefit from its investment in the national McDonald's store refurbishment projects and continues to update and improve its restaurants. The re-imaging strategy continued to have a positive impact on sales growth which is in line with the directors' expectations and objectives. The "Convenience of the Future" upgrade programme was carried out at one store during the year.

We continued to enjoy the benefits of an industry leading supply chain and the significant scale of McDonald's. This has enabled the company to navigate 2024 successfully.

The management of the company and the nature of its trading strategy are subject to a number of risks. The company operates a thorough risk assessment and management process which involves a formal review of all the risks identified and introducing processes to monitor and mitigate each risk, where possible.

The company operates in a highly competitive market with high levels of price sensitivity. Consumer behaviour can impact the company's turnover and profitability. The company mitigates this risk by adopting a policy of constantly assessing its pricing strategy with ongoing market research. Demand has increased during the year.

The company remains exposed to periods of general inflation and food cost inflation together with the variability of commodity prices, which impact on the company's profitability. The company continually assesses any risks identified with the aim of mitigating the threats these may have on the company's operations and profitability. The company's supply chain is closely maintained by McDonald's, who are therefore able to negotiate effectively on behalf of franchisees to ensure better purchasing terms. This helps as much as possible to protect the company from risks associated with fluctuating food costs. The company has been impacted by factors beyond its control, with inflation rising sharply.

The company is also inherently exposed to pressures within the labour market and to wage cost inflation. Recent changes to the national minimum wage and national living wage have contributed towards the increase in wage costs. However, given the success of the company, we will continue to invest in our people. The company mitigates this risk by a policy of adopting remuneration and benefits packages designed to be competitive within the market as well as ensuring full compliance with labour market regulations, with employment policies to allow fulfilling career opportunities for all employees.

The company's operations demand a high level of compliance within a wide range of regulatory requirements including hygiene, licensing and employment law. These areas are closely monitored by McDonalds to ensure the company is compliant.

The fast-food market is extremely competitive, with a high number of competitors competing in the sector. To remain a market leader, McDonald's have dedicated teams who focus on ensuring the brand remains a leading brand in the market.

The company's principal financial instruments comprise bank balances and trade creditors. The main purpose of these instruments is to provide funds for the company's operations. Their existence exposes the company to several financial risks which have been considered and are managed as follows:

Liquidity risk: Liquidity risk is the risk that the company will have insufficient resources to meet its financial liabilities as they fall due. The company's strategy to managing liquidity risk is to ensure that the company has sufficient funds to meet all its potential liabilities as they fall due. In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility using overdraft facilities at floating rates of interest if necessary. In respect of trade creditors the liquidity risk is managed by ensuring sufficient funds are available to meet amounts due for payment.

Operational risk: Operational risk is the risk of a direct or indirect loss resulting from the inadequacies or failures of processes or controls due to technology, staff, organisation or external factors. To monitor and control operational risk the company maintains a system of comprehensive policies and a control framework which is designed to provide a sound and well-controlled operational environment.

Interest rate risk: Interest rate risk is the risk that financial performance of the company will be adversely affected by adverse fluctuations on interest rates being charged to the company on its financial instruments, most noticeably its bank overdraft facility. The interest rate risk is managed by the on-going monitoring and assessment of its borrowings and the interest rate charged.

Price risk: Price risk is the risk that the financial performance of the company will be adversely affected by pricing charges. Due to the nature of the financial instruments used by the company, there is no exposure to price risk. The company sets its own prices within allowable variations. Cash flow and liquidity exposure is therefore directly related to prices and turnover.

Other areas of risk include include health and safety and food hygiene. The company's operations are constantly reviewed by McDonald's to ensure a high level of compliance.

On behalf of the board

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

The results for the year are set out on page 14.

Ordinary dividends were paid amounting to £741,000. 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's principal financial instruments comprise bank balances and trade creditors. The main purpose of these instruments is to raise funds for the company's operations. Their existence exposes the company to several financial risks which are detailed in the Strategic Report under financial risk management and policies.

The company does not carry out any independent or specific research and development. However, McDonald's Restaurants Limited and its associated companies carry out research and development on behalf of all franchisees. The company makes a contribution towards this through its existing payments to McDonald's Restaurants Limited.

The company operates an equal opportunities policy with regard to recruitment and seeks to offer suitable work and training wherever practicable to persons with disabilities. The policy of the company is to ensure that disabled applicants for employment are given full and fair consideration having regard for their particular aptitudes and abilities. Existing disabled employees are given equal access to training, career development and promotion opportunities within the company. In the event of employees becoming disabled whilst in the employment of the company, all reasonable means are explored to achieve retention in employment in the same or an alternative capacity.

Our employees are fundamental to the delivery of our plan. We aim to be a responsible employer in our approach to pay and benefits our employees receive. The health, safety and wellbeing of our employees is one of our primary considerations.

The company aims to promote a working environment free from unlawful harassment, victimisation, bullying and discrimination. The company regards all its employees as members of a team where opinions are valued, and everyone is regarded as equal in status and treated with fairness and respect.

The way the company recruits, and works is intended to ensure that employees are selected, promoted and treated according to their ability and that everyone has an equal opportunity to receive training and development.

The company communicates regularly with all employees on matters relating to its performance. Employees are encouraged to contribute to the decision-making process through regular staff meetings held by the management of the company to discuss matters of concern.

An open management policy is operated whereby all members of staff (including part-time and casual staff) are briefed regularly and kept informed on matters affecting the company by means of regular store meetings and communications, together with personal appraisals and feedback sessions.

Details of business relationships have been covered in the 172(1) statement in the strategic report.

The directors are committed to increasing both the turnover and profitability of the company. The company will continue its policy of refurbishing its stores in line with the McDonald's national re-imaging strategy. The company will continue to push delivery and digital offerings.

The directors are confident the company will continue to grow due to the strength of the brand and success of delivery and digital services. The company will continue with the management policies which have resulted in profitability in this trading period.

The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.

Methodologies for energy and emissions calculations

Cara Restaurants Limited greenhouse gas emissions, reportable under SECR from 1st January 2024 to 31st

December 2024, were 2,263 tonnes of carbon dioxide equivalent (tCO2e). These include emissions

associated with electricity, natural gas, transport consumption and refrigerant leaks. The number of

sites contributing to this report has increased from 14 in 2023 to 15 in 2024. Cara Restaurants Limited

total greenhouse gas emissions increased by 9.2% compared to 2023’s figures, because purchased

electricity energy consumption (kWh) has increased by 4.4% and natural gas energy consumption

(kWh) has increased by 2.1%, from 2023 to 2024.

Notable factors that could have contributed to the movement in emissions are as follows:

• A change in the methodology for missing data estimation will have affected the emissions

associated with electricity, natural gas and purchased fuel. In FY23, extrapolation was

conducted by Aligned Incentives, whereas in FY24, extrapolation was conducted by Mitie.

• The number of sites reporting on their emissions changed from 2023 to 2024.

• A change in the market-based methodology led to an increase in electricity emissions

under the market-based methodology. In FY23, all electricity consumption was considered

renewable, whereas in FY24, only meters where electricity is supplied by Npower are

considered renewable. This has been confirmed by the Mitie Energy Team, who procure

electricity for McDonald’s sites supplied by Npower. It is not known whether the other

meters/sites use renewable electricity.

• Improved refrigerant leak data capture from suppliers compared to the prior year, which

has been confirmed by McDonald's, has led to an increase in emissions associated with

refrigerants.

As per SECR guidelines, Cara Restaurants Limited emission intensity is calculated as the ratio of annual

emissions (tCO2e) to the turnover (in £’000). For FY 2024, this resulted in an emission intensity of

0.031 tCO2e per £’000, which represents a 7.6% increase compared to the previous year (0.029

tCO2e per £’000).

Boundary, methodology and exclusions

An operational control approach has been used to define the Greenhouse Gas emissions

boundary.

This approach captures emissions associated with the operation of all buildings, such as warehouses,

offices and manufacturing sites, plus company-owned and leased transport. 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.

Emissions have been calculated using the latest conversion factors provided by the UK Government.

For Refrigerant emissions, GWP conversion factors have been used (High-GWP Refrigerants

California Air Resources Board, Greenhouse Gas Inventory Guidance: Fugitive Emissions (epa.gov).

There are no material omissions from the mandatory reporting scope.

Regarding market-based reporting, all electricity supplied by NPower is confirmed to be covered by

Renewable Energy Guarantees of Origin (REGOs). All RoadChef MSA sites and ASDA sites (up until

31 March 2024) are also covered by REGOs (confirmed by the supplier). Due to a lack of

information, the remaining electricity supply is assumed to be non-renewable.

Energy consumption (in kWh) for the period 1st January 2024 – 31st December 2024 have been used

to calculate emissions for Cara Restaurants Limited FY 2024.

Energy efficiency initiatives

The director's have continued to seek and implement energy efficiency measures within both the

work processes and the use of work equipment. McDonald’s Restaurants Limited is actively

participating in mandatory compliance schemes, such as the Energy Savings Opportunity Scheme,

TCFD, and is considering implementing the recommendations outlined in the ESOS audit reports.

The following are examples of energy efficiency initiatives that are being implemented at

McDonald's Restaurants Limited and its franchisees’ restaurants after recommendations from

site energy audits conducted by the Mitie Energy Optimisation Team:

- Reductions to the time schedule for internal lighting, external lighting (signage, car parking

lighting, etc.), Air Handling Unit (AHU) conditioning, kitchen extract system, etc.

- Improvements to the Car Park lighting schedule.

- Decreased temperature set points in dining and kitchen areas, e.g. overdoor heater setpoint

reduced from 28 degrees Celsius to 22 degrees Celsius.

- Increased temperature deadbands in dining and kitchen areas, especially to AHUs.

- Local control settings change from ‘Always On’ to ‘Normal.

- Heating set point temperature reduction.

- BMS time adjusted to sync with actual time

McDonald's goal is to achieve net zero emissions in all UK restaurants by 2030. This significant decarbonisation of the emissions from our restaurants will be in line with the SBTi net zero criteria and a 1.5C climate scenario pathway. This is an interim target towards becoming net zero across our entire business by 2040. We will achieve this by reducing our emissions through how we power our restaurants, as well as how we reduce and recycle our waste.

Our overall strategy is to pursue a program of energy efficiency combined with carbon mitigation measures such as the utilisation of renewable electricity and transitioning to LED lighting throughout all restaurants.

This will be bolstered with programs to reduce and decarbonise heat across our estate. We are committed to being more energy efficient through deploying better internal operating practices and by investing in technology which saves energy.

The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations.

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

In preparing these financial statements, the directors are required to:

• 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 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.

The company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 set out in the company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008,

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

We have audited the financial statements of Cara Restaurants Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the 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 company's affairs as at 31 December 2024 and of its 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's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• 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 our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

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

• 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.

As explained more fully in the directors' responsibilities statement set out on page 8, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor's responsibilities for the audit of the financial statements

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

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

We obtained an understanding of the legal and regulatory frameworks applicable to the company and the industry in which it operates. We determined that the following laws and regulations were most significant:

Companies Act 2006/FRS 102, Employment Law, Waste and Health and Safety. We enquired of management to obtain an understanding of how the company is complying with those legal and regulatory frameworks and whether they had any knowledge of actual or suspected fraud. We corroborated the results of our enquiries through our discussions with the directors and management. We did not identify any matters relating to non-compliance with laws and regulations or matters in relation to fraud;

- We obtained an understanding of how the company is complying with those legal and regulatory frameworks by making inquiries of management and those responsible for legal and compliance procedures.

- In assessing the potential risks of material misstatement, we obtained an understanding of the company's operations, including its objectives and strategies to understand the expected financial statement disclosures and business risks that may result in risks of material misstatement.

- In assessing the appropriateness of the collective competence and capabilities of the engagement team, the engagement partner considered the engagement team's:

> understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation.

> the specialist skills required and

> knowledge of the industry in which the client operates.

- We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement included:

> assessing the design effectiveness of controls management has in place to prevent and detect fraud;

> challenging assumptions and judgements made by management in its significant accounting estimates;

> identifying and testing journal entries, in particular manual journal entries made at year end for financial statement preparation; and

> assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement item.

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiiencies in internal control that we identify during our audit.

.

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

The income statement has been prepared on the basis that all operations are continuing operations.

Cara Restaurants Limited is a private company limited by shares incorporated in England and Wales. The registered office is McDonalds Markham Moor, A1/A57 Interchange, Retford, DN22 0QU.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements represent information about the company as an individual undertaking. It is not a member of a group.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

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.

Revenue from the sale of goods is recognised at the point of sale to the customer.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses 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 20 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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 credited or charged to profit or loss.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

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

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

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

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

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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 company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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

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

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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

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

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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax 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 income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has 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 leases asset are consumed.

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted cost of the future holiday entitlement at the balance sheet date.

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

Franchise rights and intangible assets - Franchise rights acquired on each business combination are capitalised, classified as an asset on the statement of financial position and amortised on a straight line basis over its useful life.

The company establishes an estimate of the useful life of franchise rights and intangible assets arising on business combinations. This estimate is based on the term of the franchise of each operating restaurant.

Fixtures and fittings - The company's accounting policy for fixtures and fittings is set out in the note 2.6. Estimated useful lives of fixtures and fittings are based on management's judgement and historical experience with similar assets.

The average monthly number of persons (including directors) employed by the 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 2 (2023 - 2).

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:

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

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

The company is controlled by Mr and Mrs W J Wright who own all the issued shares.