The directors present the strategic report for the year ended 31 December 2025.

The Directors are encouraged by the business’s continued expansion throughout 2025, driven by the addition of new customers and the development of new product lines. This growth in sales has supported an increase in profit before taxation, reaching £2.9m.

Ongoing pressures from supply chain cost inflation and challenges within the labour market remained key areas of focus during the year. In response, the business implemented measures to manage these risks effectively. In the latter part of 2025, attention shifted towards developing a strategic plan, centered on improving efficiency and delivering sustainable cost savings.

Overall, the business reports a profit before taxation of £2.9m for the year ending 2025, achieved on sales of £47.4m. This represents a return on sales of 6.3%, delivered despite continued adverse global economic conditions. Directors are pleased with the continued growth of the business during 2025 with expanding the team, new customers and new product areas coming on board.

To effectively manage risk, the Directors are proactively addressing the challenges associated with seasonal demand by implementing strategies that support more consistent, year-round performance.

These measures include strengthening partner arrangements and maintaining a balanced operational structure, helping to mitigate potential pressures on working capital and ensure overall efficiency is sustained.

The business has further strengthened its reputation as an employer of choice within the local community, continuing to invest in employee development and enhancing its on-site working environment.

Operating cash flow is being reinvested in a disciplined manner to expand capacity and reinforce the company’s position as a provider of high-quality products and service excellence.

The We Love Cake brand continues to perform strongly, supported by targeted positioning with major retailers and a focus on expanding brand presence through seasonal innovation.

The company remains committed to its core values, operating transparently to deliver reliable service, competitive pricing, and consistent fulfilment, while maintaining strong and enduring customer relationships.

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

The business continues to place innovation at the core of its operations, alongside a strong commitment to quality, service excellence, flexible production capabilities, and the agility in decision-making that characterises Bells of Lazonby.

The company remains dedicated to its environmental responsibilities, actively implementing policies and practices to support sustainability, with the objective of achieving carbon neutrality in 2026.

With the acquisition of the adjacent land next to its existing site and obtaining the required planning approvals. Strategic preparations are now underway, with development expected to commence in 2026/2027.

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 company's 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 through 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 present their annual report and financial statements for the year ended 31 December 2025.

The principal activities during the year were wholesale bakers of cakes and confectionery in traditional and free from categories to national supermarkets, food service and export customers.

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £811,750. The directors do not recommend payment of a final 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 company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The company'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 company's performance.

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

As the company is a subsidiary in a large group, its emissions, energy consumption and energy efficiency activities are included within the report included in the accounts of the parent entity, Bells of Lazonby Holdings 2020 Limited.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company'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 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.

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

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

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

• 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; and

• 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.

We have audited the financial statements of Bells Of Lazonby Limited (the 'company') for the year ended 31 December 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including material 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 2025 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 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 ethical responsibilities in accordance with those 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 the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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, 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, 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.

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 occurred in the financial statements and recognised in the correct accounting period.

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.

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

Bells of Lazonby Limited is a private company limited by shares and is registered and incorporated in England and Wales. The registered office is Edenholme Bakery, Lazonby, Penrith, Cumbria, CA10 1BG.

The company's principal activities and nature of its operations are disclosed in the Directors’ Report.

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, including the provision of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, and under the historical cost convention.

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

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

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Bells of Lazonby Holdings 2020 Limited. These consolidated financial statements are available from its registered office, Edenholme Bakery, Lazonby, Penrith, Cumbria, CA10 1BG.

The company meets its funding requirements by means of intercompany loans and borrowings. Thetrue 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.

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

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

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:

Freehold land and assets in the course of construction are not depreciated.

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.

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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell, which is equivalent to the net realisable value. Cost is determined using the weighted average cost basis and for finished goods and work in progress, includes direct labour costs and overheads appropriate to the stage of manufacture.

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

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

Financial assets and liabilities are recognised when the company becomes party to the contractual provisions of the instrument.

Basic financial assets, which include trade and other 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.

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 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.

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 trade and other creditors, and amounts owed to group undertakings are initially recognised at transaction price.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate 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, and only when, the company’s contractual obligations are discharged, cancelled, or they expire.

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

Deferred tax 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 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.

For defined contribution schemes the amount charged to profit or loss is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments.

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.

When the company acts as a lessor, a lease is classified as a finance lease whenever it transfers substantially all the risks and rewards of ownership of the underlying asset to the lessee, either at the end of the lease term or for the major part of the economic life of the asset. All other leases are classified as operating leases. If an arrangement contains both lease and non-lease components, the company allocates the consideration in the contract to the two elements.

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.

Government grants in respect of capital expenditure are credited to a deferred income account and are released to the profit and loss account by equal instalments over the expected useful lives of the relevant assets.

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.

Research and development

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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

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

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.

The company includes a bad debt provision at the year end based upon management's expectations for recovery of overdue debts based on trading relationships with each individual customer. The directors make an assessment of all information available to them to arrive at the final provision made in the financial statements, which ultimately involves a degree of uncertainty.

The directors review the stock listing on a monthly basis and analyse any slow moving products that may be obsolete. The period of 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 an impairment provision required and reflect this balance in the financial statements. Calculations of such provisions involve judgements being made which can include forecast customer demand and inventory loss trends.

At the balance sheet date, management reviews finished goods and goods for resale stock held at the period end by reference to its anticipated selling price and stage of completion within the sales process.

Production costs incurred during manufacture are accumulated and subsequently removed from inventory through monthly stock journals. Goods remaining in stock are then recognised at a percentage of anticipated selling price for manufactured stock and goods picked and awaiting dispatch.

Based upon the above information, management estimates the recoverable value of stock at the period end and recognises stock accordingly within amounts recoverable on contracts.

The actual proceeds realised on the subsequent sale of stock may differ from the estimates made at the balance sheet date.

Research and development expenditure of £Nil (2024: £588,023) was incurred during the year.

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 (2024 - 2).

The total tax charge for the year included in the income statement can be reconciled to the profit before tax multiplied by the standard rate of tax as follows:

During the year, £1,961,767 (2024: £1,358,816) was reclassified from inventories to amounts recoverable on contracts following a reassessment of the accounting treatment under FRS 102 Section 23. The reclassification affects presentation within current assets only and has no impact on profit, net assets or total current assets.

Bells of Lazonby Limited factors most sales invoices effectively with recourse, up to the insured credit limit, as per the group facility agreement with Barclays Bank. However as the credit insurance is provided by a third party, the company retains the risk associated with default (under the terms with Barclays Bank), and therefore these balances remain within trade debtors. At the balance sheet, the company had factored trade debtors within insured credit limits totalling £3,659,431 (2024: £Nil). These are included within trade debtors above, along with a corresponding balance in other borrowings.

During the year, £1,961,767 (2024: £1,358,816) was reclassified from inventories to amounts recoverable on contracts following a reassessment of the accounting treatment under FRS 102 Section 23. The reclassification affects presentation within current assets only and has no impact on profit, net assets or total current assets.

Other borrowings includes £3,659,431 (2024: £Nil) of liabilities under the debt factoring arrangement as detailed in note 15. These amounts are secured on the debtors to which they relate.

Included within other borrowings is £645,000 (2024: £905,000) which relates to two pension scheme loans, £225,000 (2024: £525,000) which relates to a CBIL bank loan, £1,500,000 (2024: £Nil) which relates to a trade bank loan and £3,659,431 (2024: £Nil) which relates to a debt factoring arrangement.

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 & trade bank loan are secured by a debenture granted by the company in favour of Barclays Bank Plc.

The debt factoring arrangement are secured on the debtors to which they relate.

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

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

The government grants relate to capital grants which are being recognised under the accruals model. The grant is amortised in line with the useful economic life of the related asset. During the year amortisation of £23,232 (2024: £23,232) was credited to the income statement.

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.

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

The operating leases represent leases to third parties.

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

Amounts contracted for but not provided in the financial statements:

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

The directors consider the ultimate parent undertaking to be Bells of Lazonby Holdings 2020 Limited, a company incorporated in England and Wales. The largest and only group of which the company is a member and for which group accounts are drawn up is that headed by Bells of Lazonby Holdings 2020 Limited.

Copies of group accounts of Bells of Lazonby Holdings 2020 Limited, have been delivered to, and are available from, The Registrar of Companies, Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.

The company is under the ultimate control of the Directors of Bells of Lazonby Holdings 2020 Limited, who controlled, together with members of their close families, the whole of the company’s issued ordinary share capital throughout the whole of the current and previous year.