The DIrectors present the strategic report for the year ended 31 March 2023.
As Kennelpak approaches its 50th anniversary, it is uniquely positioned within the UK pet care sector to be the trusted pet specialist for pets, their parents and its partners, offering a pet care ecosystem that monetises its portfolio of own and distributor brands, bringing together a range of products, services, expertise and strategic partnerships across its wholesale and retail divisions.
Kennelpak is a specialist wholesaler, brand owner & distributor providing a turnkey solution for manufacturers and customers alike. With an established nationwide customer base, including all pet wholesalers, the division has access to all specialist retail channels which, coupled with Kennelpak’s unique solution for secondary and residual product handling, makes the group the go to partner for manufacturers, brand owners and retailers.
The retail division, Pets and Friends, consists of 19 stores and 16 grooming salons including the recently opened concession within Brigg Garden Centre and an enhanced ecommerce and subscription platform enabling a truly omnichannel customer proposition. Its vision is to build on the expertise and passion of its colleagues to create a community of happy, healthy pets and responsible pet parents, becoming the number one choice for pet parents, providing all they need in one place, offering expert advice and support, giving them ultimate peace of mind.
Following the appointment of a new CEO in June 2021, the group has invested in:
its people
delivery of various initiatives that strive to fulfil the promises set out in it's ESG charter
the Pets and Friends’ ecommerce platform and operation
a new salon format, Pets Parlour, the first opening in Bletchley in April 2022
a new store format and various services within its retail division that delivers the Pets and Friends’ vision
new product development and expansion of its distributor portfolio
Kennelpak is well placed to maximise the opportunity in pet ownership and the continuing trend in the humanisation of pets, offering significant headroom for growth.
The principal risks and uncertainties faced by the business and their mitigating activities are as follows:
Growing inflation and interest rates will put pressure on cost prices; we believe that our market position and financial position will allow us to manage these challenges.
The Directors anticipate the business environment will remain competitive and price sensitive. The business has recently launched Tiny Paws Puppy & Kitten Club in addition to it's loyalty programme, personalised pet nutrition consultations, Pet Chat and its online subscriptions platform deliver enhanced customer engagement and subsequent loyalty.
Exchange rate volatility is mitigated through the forward buying of currency.
Credit risk is mitigated through the close management of debtors, the use of credit limits and the monitoring of credit bureau reports.
Liquidity risk is mitigated by ongoing cash flow forecasting and review with the Board to ensure that appropriate facilities are available to be utilised as required.
The key performance indicator of the Group is considered by the Directors to be EBITDA. The EBITDA for the year ended 31 March 2023 is £474,364 (2022: £1,282,875). The decline in EBITDA is due to investment in the growth strategy. EBITDA is calculated by taking the operating profit, adding back the amortisation, depreciation and exceptional items. The full reconciliation is provided in Note 8.
The Directors' assessment of performance is analysed below:
Environmental, Social and Governance
There is an Environmental, Social and Governance charter that defines Kennelpak’s objectives in ensuring a better future for its colleagues, pet communities and the planet. It has been created with extensive input from colleagues across the business in collaborative forums and the delivery of the promises set out in its charter is governed by a colleague wide ESG Steering Group. The objectives are both short and long term and includes colleague wellbeing and personal development; using waste beneficially; management of its carbon footprint; and supporting pet health and wellbeing within multiple pet communities through various initiatives.
The Group has policies that raise awareness of modern slavery, ethical trading and human rights. The policies set out standards concerning safe and fair working conditions for colleagues, responsible management of social and environmental issues and standards in the international supply chain. The Group continues to work with its supply chain to ensure there is a zero-tolerance policy to slavery, we carry out audits on key partners to monitor this.
The Group has policies that promote equality and diversity in the workplace as well as prohibiting discrimination in any form. One of the Group’s core values is respect for others which displays an active commitment to diversity and inclusion across the organisation. We conduct a gender pay review and we are making progress to close the gap.
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other colleagues.
Employee/Colleague Involvement
The Group carries out an annual engagement survey. The output of this is reviewed in detail with focus groups to address any areas of concern or opportunities for improvement.
There are robust channels of communication with colleagues across the Group through huddles; town halls; the fortnightly publication of The Repawter, the Group’s internal newspaper; a quarterly colleague panel; and monthly people surgeries, all of which seek to achieve a common awareness on the part of all colleagues of the financial and economic factors affecting the group's performance in addition to celebrating success and delivering the business strategy.
The group has a number of fundamental principles that it believes are the foundation of sound and fair business practice, one of which is a zero tolerance on bribery and corruption.
Health and Safety
The Group considers this an important consideration. There is a Health and Safety report that is reviewed at the monthly Board meeting. There are representatives from across the business that are tasked with delivering the 2-year plan to ensure our ongoing compliance including regular training.
Future Developments
The Directors anticipate the business environment will remain competitive within retail and online, however they believe the Group is in a good financial position to respond to any changes in market conditions.
The Group will continue to look for further opportunities for growth in all areas of the business through:
Growth of the Pets & Friends' subscription customer base and membership of its Tiny Paws Puppy and Kitten club
Additional stores and grooming salons in strategic locations
Investment in a new multichannel loyalty programme that will deliver a single view of the Pets and Friends' customer
Enhancements to the Pets and Friends' service offering and upgrading of existing stores
The ongoing recruitment and training of all store and salon colleagues as trusted pet specialists
Investment in colleague capability across the group
Growth in the distributor brand portfolio
Investment in the group’s own brand portfolio
Investment in operational infrastructure to deliver efficiency improvements and ongoing cost savings
Going Concern
The Directors have reviewed the detailed financial projections, including both profit and loss forecasts as well as cash-flow forecasts and considered all reasonably foreseeable potential scenarios and uncertainties, they have satisfied themselves that the group will continue in operational existence for a period of at least 12 months from the signing of these financial statements and have therefore prepared the financial statement on a going concern basis and that no material uncertainty exists.
On behalf of the board
The Directors present their annual report and financial statements for the year ended 31 March 2023.
The results for the year are set out on page 10.
No ordinary dividends were paid. 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 auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of Kennelpak Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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).
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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we 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. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
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 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.
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.
The notes on pages 17 to 34 form part of these financial statements.
The notes on pages 17 to 34 form part of these financial statements.
The notes on pages 17 to 34 form part of these financial statements.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £5,000 (2022 - £5,000 loss).
The notes on pages 17 to 34 form part of these financial statements.
The notes on pages 17 to 34 form part of these financial statements.
Kennelpak Holdings Ltd (“the company”) is a private limited company limited by shares and domiciled and incorporated in England and Wales. The registered office is Palmer Drive, Stapleford, Nottingham, United Kingdom, NG9 7BW.
The group consists of Kennelpak Holdings Ltd and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
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 consolidated group financial statements consist of the financial statements of the parent company Kennelpak Holdings Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Kennelpak Limited has been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows of Kennelpak Limited for the period from its acquisition on 7 July 2017. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.
The group profit and loss account and statement of cash flows also include the results and cash flows of Kennelpak Group Ltd for the period from its incorporation on 7 June 2017.
The Directors have reviewed detailed financial projections, including both profit and loss forecasts as well as cash-flow forecasts and considered all reasonably foreseeable potential scenarios and uncertainties in respect of the Group. As a result, the Directors have satisfied themselves that the Group will continue in operational existence for a period of at least 12 months from the signing of these financial statements and have therefore prepared the financial statement on a going concern basis and that no material uncertainty exists.
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.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer on dispatch of the goods.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost less impairment.
Financial assets are assessed for indicators of impairment at each reporting end date. 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 group transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans and loan notes 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.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, 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 if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense. 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.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill at the reporting end date was £2,276,749. No impairment loss was recognised during the year.
At each reporting date, management makes an assessment of the value of freehold land and buildings. These estimates take into account previous professional valuations and an estimate of any changes, which involves an element of estimation. At the 31 March 2023 the valuation made by the Directors was £3,235,000.
The Directors assess the cost of dilapidations each year end based upon the state of the leasehold properties at each year end. This assessment includes an estimate of the state of remedial works required and the associated costs that would be incurred at the expected date of exiting the respective premises. These estimates take into account the most recent professional review of dilapidations together with a review of any significant changes since. Details of the dilapidation provision are shown in note 23.
The amortisation of intangible assets is included within administration expenses.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The group's EBITDA and reconciliation to loss before taxation is as follows:
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Included in other fixed assets is short leasehold improvements with a net book value of £602,372 (2022: £716,021).
Freehold buildings were revalued during the year based on a directors valuation and no changes have arisen from the directors' valuation of £3,235,000 during the previous year.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
At 31 March 2021 the company owned 100% of the entire share capital of Kennelpak Group Ltd, a company registered in England and whose primary purpose is that of a investment company.
The following is the subsidiary undertaking of Kennelpak Group Ltd at 31 March 2021:
The registered office of both Kennelpak Group Ltd and Kennelpak Limited is Palmer Drive, Stapleford, Nottingham, England, NG9 7BW.
The Debenture loans comprise £2,500,000 (2022: £2,500,000) 8% A1 loan notes repayable in July 2024, £6,754,675 (2022: £6,754,675) 8% A2 loan notes repayable in July 2024, and £1,022,233 (2022: £1,022,233) 8% loan notes repayable in July 2024 all of which are secured by a fixed and floating charge over the property and undertakings of the group.
Kennelpak Limited has entered into a Receivables finance facility, an Inventory facility and a Real property loan agreement. These are secured on book debts totalling £2,836,854, stock of £2,153,113 and the freehold properties of the company. Interest/discount rates are charged at 2.5%, 3.5% and 4.5% above the Bank of England's base rate on these facilities respectively. The liabilities due at the year end are £1,679,769 (2022: £1,735,305), £1,096,521 (2022: £524,479) and £1,058,247 (2022: £1,255,492) respectively and are wholly repayable within five years. Kennelpak Limited retains the risks and rewards of ownership of the related assets.
The finance company holds a fixed and floating charge under a Composite Debenture over the assets of the group.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is five years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The A shares are entitled to dividends pari passu with the holders of the B and the C class of shares. Each holder of the A shares has one vote for each A share held, save that the holders of the B2 ordinary shares have, in aggregate, 5 per cent of the total voting rights capable of being passed and the holders of the B3 ordinary shares have 10.5 per cent of the total voting rights capable of being passed.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The ultimate controlling party is Endless Iv (Gp) Lp.