Company No: 02775011 (England and Wales)

Contents

• Statement of Financial Position
• Notes to the Financial Statements

	Note	2022		2021
		£		£
Fixed assets
Tangible assets	3	392,094		163,419
		392,094		163,419
Current assets
Stocks		158,421		117,717
Debtors	4	188,858		167,039
Cash at bank and in hand		29,161		71,888
		376,440		356,644
Creditors: amounts falling due within one year	5	( 693,329)		( 346,213)
Net current (liabilities)/assets		(316,889)		10,431
Total assets less current liabilities		75,205		173,850
Creditors: amounts falling due after more than one year	6	( 57,060)		( 45,706)
Provision for liabilities		0		( 18,338)
Net assets		18,145		109,806
Capital and reserves
Called-up share capital	7	1,000		1,000
Profit and loss account		17,145		108,806
Total shareholder's funds		18,145		109,806

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 member has not required the Company to obtain an audit of its financial statements for the financial year in accordance with section 476;
• The director acknowledges their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements; and
• These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime and a copy of the Statement of Income and Retained Earnings has not been delivered.

The financial statements of Portreath Bakery Limited (registered number: 02775011) were approved and authorised for issue by the Director on 22 December 2023. They were signed on its behalf by:

Mrs M J Symonds Director

1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.

General information and basis of accounting

Portreath Bakery Limited (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales, registered number 02775011. The address of the Company's registered office is Chy Nyverow, Newham Road, Truro, Cornwall, United Kingdom, TR1 2DP, United Kingdom.

The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with Section 1A of Financial Reporting Standard 102 (FRS 102) ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ issued by the Financial Reporting Council.

The functional currency of Portreath Bakery Limited is considered to be pounds sterling because that is the currency of the primary economic environment in which the Company operates. The financial statements are rounded to the nearest £1 throughout.

Going concern

The director has assessed the Statement of Financial Position and likely future cash flows at the date of approving these financial statements. The Company is supported through loans from an associated company. The director has received assurances that the loan facilities will continue to be available for at least 12 months from the date of signing these financial statements and the associated Company will continue to support the company. After making enquiries, the director believes that any foreseeable debts can be met for at least 12 months from the date of signing these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Turnover

Turnover is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer. Turnover from the sale of goods is recognised when the goods are physically delivered to the customer. Where a contract has only been partially completed at the Statement of Financial Position date turnover represents the fair value of the service provided to date based on the stage of completion of the contract activity at the Statement of Financial Position date. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

Employee benefits

Defined contribution schemes
The Company operates a defined contribution scheme. The amount charged to the Statement of Income and Retained Earnings in respect of pension costs and other post-retirement benefits is the contributions payable in the financial year. Differences between contributions payable in the financial year and contributions actually paid are included as either accruals or prepayments in the Statement of Financial Position.

Finance costs

Finance costs are charged to the Statement of Income and Retained Earnings over the term of the debt using the effective interest method so the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Taxation

Current tax
Current tax is provided at amounts expected to be paid (or recoverable) using the tax rates and laws that have been enacted or substantively enacted at the Statement of Financial Position date.

Deferred tax
Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the Company's financial statements. Deferred tax is provided in full on timing differences which result in an obligation to pay more or less tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws. Deferred tax assets and liabilities are not discounted.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible fixed assets

Tangible fixed assets are stated at cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets, other than freehold property at rates calculated to write off the cost or valuation, less estimated residual value, of each asset over its expected useful life, as follows:

Land and buildings	not depreciated
Leasehold improvements	10 years straight line
Plant and machinery	15 % reducing balance
Computer equipment	4 years straight line

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

Leases

The Company as lessee
Assets held under finance leases, hire purchase contracts and other similar arrangements, which confer rights and obligations similar to those attached to owned assets, are capitalised as tangible fixed assets at the fair value of the leased asset (or, if lower, the present value of the minimum lease payments as determined at the inception of the lease) and are depreciated over the shorter of the lease terms and their useful lives. The capital elements of future lease obligations are recorded as liabilities, while the interest elements are charged to the Statement of Income and Retained Earnings over the period of the leases to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to the net realisable value. Cost includes materials, direct labour and an attributable proportion of manufacturing overheads based on normal levels of activity. Cost is calculated using the FIFO (first-in, first-out) method. Provision is made for obsolete, slow-moving or defective items where appropriate.

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

Trade and other debtors

Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts, except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts.

Cash and cash equivalents

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 creditors: amounts falling due within one year.

Trade and other creditors

Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost.

Financial instruments

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

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.

Financial assets and liabilities are only offset in the Balance Sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

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

Financial assets are derecognised when and only when the contractual rights to the cash flows from the financial asset expire or are settled, or the Company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

Basic financial 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.

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

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the Statement of Financial Position date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Ordinary share capital

The ordinary share capital of the Company is presented as equity.

2. Employees

	2022		2021
	Number		Number
Monthly average number of persons employed by the Company during the year, including the director	55		44

3. Tangible assets

	Land and buildings		Leasehold improve- ments		Plant and machinery		Computer equipment		Total
	£		£		£		£		£
Cost
At 01 January 2022	54,931		5,128		312,933		13,287		386,279
Additions	0		10,305		260,200		1,707		272,212
At 31 December 2022	54,931		15,433		573,133		14,994		658,491
Accumulated depreciation
At 01 January 2022	0		5,128		209,373		8,359		222,860
Charge for the financial year	0		1,370		40,193		1,974		43,537
At 31 December 2022	0		6,498		249,566		10,333		266,397
Net book value
At 31 December 2022	54,931		8,935		323,567		4,661		392,094
At 31 December 2021	54,931		0		103,560		4,928		163,419

4. Debtors

	2022		2021
	£		£
Trade debtors	110,006		87,381
Amounts owed by director	40,784		40,191
Prepayments	19,495		12,079
Other debtors	18,573		27,388
	188,858		167,039

5. Creditors: amounts falling due within one year

	2022		2021
	£		£
Bank loans (secured)	8,222		8,178
Trade creditors	112,089		93,619
Amounts owed to associates	459,368		215,410
Accruals	30,734		8,956
Taxation and social security	61,204		4,760
Obligations under finance leases and hire purchase contracts (secured)	18,889		12,538
Other creditors	2,823		2,752
	693,329		346,213

The bank loans are secured over the company's assets. The obligations under finance lease and hire purchase contracts are secured on the assets to which they relate.

6. Creditors: amounts falling due after more than one year

	2022		2021
	£		£
Bank loans (secured)	21,498		29,718
Obligations under finance leases and hire purchase contracts (secured)	35,562		15,988
	57,060		45,706

The bank loans are secured over the company's assets. The obligations under finance lease and hire purchase contracts are secured against the assets to which they relate.

7. Called-up share capital

	2022		2021
	£		£
Allotted, called-up and fully-paid
1,000 Ordinary shares of £ 1.00 each	1,000		1,000

8. Related party transactions

At the year end, the company owed £459,368 (2021 - £215,410 ) to an associated company. The account was interest free. The company also occupied premises owned by the associated company on a rent free basis.

At the year end, the company was owed £40,784 (2021 - £40,191) by Mrs M J Symonds, a director. The opening balance was the maximum amount owed during the year, and there was no interest charged on the account.