Brood Limited - Period Ending 2022-12-31

Brood Limited

Contents

Company Information	1
Balance Sheet	2
Notes to the Unaudited Financial Statements	3 to 9

Brood Limited

Company Information

Director

C A Davis

Company secretary

C A Davis

Registered office

Lower Berrow Farm Ham Green Redditch Worcestershire B97 5TT

Accountants

Hazlewoods LLP Staverton Court Staverton Cheltenham GL51 0UX

Brood Limited

(Registration number: 08326771)
Balance Sheet as at 31 December 2022

	Note	2022 £	2021 £
Fixed assets
Tangible assets	4	1,479,519	1,475,601
Current assets
Stocks		105,319	207,366
Debtors	5	309,456	284,545
Cash at bank and in hand		44,771	43,253
		459,546	535,164
Creditors: Amounts falling due within one year	6	(3,999,721)	(3,616,282)
Net current liabilities		(3,540,175)	(3,081,118)
Total assets less current liabilities		(2,060,656)	(1,605,517)
Creditors: Amounts falling due after more than one year	6	(118,701)	(192,857)
Net liabilities		(2,179,357)	(1,798,374)
Capital and reserves
Called up share capital		100	100
Profit and loss account		(2,179,457)	(1,798,474)
Shareholders' deficit		(2,179,357)	(1,798,374)

For the financial year ending 31 December 2022 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Director's responsibilities:

•	The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and
•	The director acknowledges her responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the director on 31 October 2023
 

C A Davis
Company secretary and director

Brood Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Lower Berrow Farm
Ham Green
Redditch
Worcestershire
B97 5TT

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Going concern

These financial statements show a net deficit on net assets. The company is therefore dependant upon the continued financial support of the director's loan to the company. These financial statements are prepared on a going concern basis which assumes the director will continue to provide financial support.

Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
 

Judgements

No significant judgements have been made by management in preparing these financial statements.

Key sources of estimation uncertainty

No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Brood Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Buildings	20 years straight line
Plant and machinery	12.5% reducing balance
Motor vehicles	20% reducing balance

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Brood Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

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

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Brood Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

Financial instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

3

Staff numbers

The average number of persons employed by the company (including the director) during the year, was 3 (2021 - 3).

Brood Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

4

Tangible assets

	Buildings £	Plant and machinery  £	Motor vehicles  £	Total £
Cost
At 1 January 2022	309,773	1,709,794	16,750	2,036,317
Additions	19,647	344,965	47,775	412,387
Disposals	-	(290,463)	-	(290,463)
At 31 December 2022	329,420	1,764,296	64,525	2,158,241
Depreciation
At 1 January 2022	41,518	511,870	7,328	560,716
Charge for the year	16,162	134,414	5,187	155,763
Eliminated on disposal	-	(37,757)	-	(37,757)
At 31 December 2022	57,680	608,527	12,515	678,722
Carrying amount
At 31 December 2022	271,740	1,155,769	52,010	1,479,519
At 31 December 2021	268,255	1,197,924	9,422	1,475,601

5

Debtors

	Note	2022  £	2021  £
Trade debtors		121	50,000
Amounts owed by related parties	9	235,422	89,999
Other debtors		62,903	135,691
Prepayments		11,010	8,855
		309,456	284,545

Brood Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

6

Creditors

	Note	2022  £	2021  £
Due within one year
Loans and borrowings	7	47,253	68,806
Trade creditors		21,206	48,708
Amounts due to related parties	9	3,965,308	3,520,713
Other creditors		103	2,199
Accrued expenses		4,180	3,800
Payments on account		(38,329)	(27,944)
		3,999,721	3,616,282
Due after one year
Loans and borrowings	7	118,701	192,857

7

Loans and borrowings

	2022 £	2021 £
Current loans and borrowings
HP and finance lease liabilities	47,253	68,806

	2022 £	2021 £
Non-current loans and borrowings
HP and finance lease liabilities	118,701	192,857

8

Share capital

Allotted, called up and fully paid shares

	2022		2021
	No.	£	No.	£
Ordinary shares of £1 each	100	100	100	100

Brood Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

9

Related party transactions

At the balance sheet date the amount due to the director amounted to £3,965,308 (2021 - £3,520,713).

At the balance sheet date the amount due from related parties amounted to £235,422 (2021 - £89,999).