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Keith Spicer Limited

Registered number: 00348565
Directors' report and
 financial statements
For the year ended 31 December 2023

 
KEITH SPICER LIMITED
 
 
COMPANY INFORMATION


Directors
K J Shah 
M Roberts 
S Shah 
C Borooah 
C J Owen                                                 
M Clay 




Registered number
00348565



Registered office
5 Cobham Road
Ferndown Industrial Estate

Wimborne

Dorset

BH21 7PN




Independent auditors
Mazars LLP
Chartered Accountants & Statutory Auditor

5th Floor Merck House

Seldown Lane

Poole

Dorset

BH15 1TW




Bankers
Wells Fargo Bank, N A
One Plantation Place

30 Fenchurch Street

London

EC3M 3BD





 
KEITH SPICER LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 3
Directors' Report
 
4 - 5
Independent Auditors' Report
 
6 - 9
Statement of Comprehensive Income
 
10
Statement of Financial Position
 
11
Statement of Changes in Equity
 
12
Statement of Cash Flows
 
13 - 14
Analysis of Net Debt
 
15
Notes to the Financial Statements
 
16 - 41


 
KEITH SPICER LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present the Stategic Report of Keith Spicer Limited (the 'company') for the year ended 31 December 2023.

Introduction

Keith Spicer Limited is one of UK’s prime blenders and packers of tea, under its Own Brands and Retailer Brands.  The company has a well invested production site in North Shields near the port of Tyne where raw material and blend components are imported. This site is BRC AA+ certified. Our commercial, R&D and procurement office continues in Ferndown, Dorset, from where commercial administration, sales and marketing are managed. The company blends and packs a full range of black, speciality and fruit & herb infusions in a wide variety of formats. 

Principal activities
 
The principal activity of the company continues to be that of tea importers, blenders, packers, and packaged tea exporters. The Directors do not envisage any change in this business in the near future. 
We provide our customers with both their own retailer brand and our branded teas and infusions. We are building our branded portfolio with Dorset Tea, Tea India, and Lancashire brands.

Business review and future developments
We are part of the Harris Freeman & Co Group in the USA, and Madhu Jayanti Ltd in India. The strength of our business comes from our wider group’s extensive knowledge, scale, and experience in the global tea market, and in packing of tea, fruits, and herbs. We also excel in beverage innovation through collaboration with our companies in different countries. 
Our strategic focus continues to remain on growth, overall cost efficiency, our brands and on innovation. We continue to play a key role in the retailer branded sector but apply strong discipline in our cost modeling and contracting processes ensuring that we only participate in sustainable contracts.
Our dedicated co-workers across our business continue to work hard and, as ever, we are grateful for their ongoing commitment.
Our corporate social responsibility within the UK and in countries where tea is grown, is embedded in our end-to-end processes. This extends to environmental stewardship and safe business practices. Sustainability projects focus on eliminating waste, reducing energy usage and packaging material. We are increasing the use of biodegradable material and renewable energy sources. All our brands are packed in biodegradable tea bag paper, with an increasing number of our retailer branded customers requesting this option for their own brands too. We are well placed to support CSR and sustainability projects. 
Our Harris Freeman Foundation is a non-profit organisation that provides philanthropic services or monetary donations to aid underdeveloped communities, victims of natural disasters, and supports other charity organizations. 

- 1 -

 
KEITH SPICER LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal risks and uncertainties
 
Tea, like other traded commodities, is impacted by market and currency fluctuations. We have developed processes for managing and mitigating these risks.   
Changes in the Retail Landscape -
The UK grocery market in general remains competitive. Our operational efficiency and varied capabilities and customer base, product and customer focused strategies, commercial discipline, together with the group’s scale help us to develop plans to perform in this competitive landscape. 
Product Safety Risks -
We pride ourselves on the quality, consistency, and safety of our products. Tea is a very safe product to consume and therefore of negligible risk.
Changes in Raw Material or Energy Costs -
Movements in our raw material costs or energy costs impact our financial results. Tea, like other traded commodities, is impacted by market and currency fluctuations. Price increases were necessary to mitigate the inflationary increase in commodity, supply chain and energy costs. 
Credit risk
In order to manage credit risk, where appropriate, the Directors set credit limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed on a regular basis in conjunction with the debt ageing and collection history.
Liquidity and cash flow risk
The Company operates a range of policies to ensure there is sufficient liquidity and cash to meet its liabilities as they fall due. Cash flow forecasts are undertaken to monitor the cash position and to determine the liquidity of the Company.
Currency risk
The Company has an exposure to the volatility of currency exchange rates, particularly US dollar, and this will remain an area of risk. The Directors continue to review on a regular basis and mitigate with foreign exchange options where appropriate.

- 2 -

 
KEITH SPICER LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial key performance indicators
 
Our financial results are as shown below:                          

2023
2022
Change
      £'000
      £'000
        %

Turnover

21,547

17,412

124
 
Gross profit

3,219

2,535

127
 
Operating profit

649

7

927
 
EBITDA

1,027

541

(53)
 
Turnover/employee

127

142

(11)
 

The Company’s defined benefit pension scheme is in deficit by £644k (2022: £211k). Full disclosure of relevant information is included in note 27.


This report was approved by the board and signed on its behalf by:


................................................
C J Owen
Director

Date: 24 May 2024

- 3 -

 
KEITH SPICER LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the audited financial statements for the year ended 31 December 2023.

Results and dividends

The loss for the year, after taxation, amounted to £61,255 (2022: loss of £38,583).

The directors do not recommend payment of a dividend in the current or prior year.

Directors

The directors who served during the year and to the date of this report were:

A Shah (resigned 24 October 2023)
K J Shah (appointed 24 October 2023)
M Roberts 
C Borooah 
C J Owen 
S J Knight (resigned 15 January 2024)
M Clay 
S Shah
 
Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report and the audited financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare audited financial statements for each financial year. Under that law the directors have elected to prepare the audited financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the audited 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 audited financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements 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 audited 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 to enable them to ensure that the audited financial statements comply with the Companies Act 2006They 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.

- 4 -

 
KEITH SPICER LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Going concern

In determining whether the Company’s financial statements can be prepared on a going concern basis, the directors considered the business activities, together with the factors likely to affect its future development, performance and position; these are set out in the Strategic Report.
The business forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Company should be able to operate within the level of its current cash resources and continued support of the parent company.
As at the date of this report, the directors have a reasonable expectation that the Company has adequate resources to continue in business from 12 months from the date of signing these financial statements. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Qualifying third party indemnity provisions

The directors benefit from a qualifying third party indemnity provision in the form permitted by the Section 234 of the Companies Act 2006 in respect of certain third party actions against directors. No claim or notice of claim in respect of these indemnities has been received in the period. The qualifying indemnity provision was in force throughout the financial period and up to the date of approval of the Directors' Report.

Matters covered in the Strategic Report

The mandatory disclosure in relation to the principal risks and uncertainties and the future developments of the company are considered by the directors to be of strategic importance. These have therefore been included in the Strategic Report.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end. 

Auditors

The auditorsMazars LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf by:
 



................................................
C J Owen
Director

Date: 24 May 2024

- 5 -

 
KEITH SPICER LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEITH SPICER LIMITED
 

Opinion

We have audited the financial statements of Keith Spicer Limited (the ‘Company’) for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies. 
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
- 6 -

 
KEITH SPICER LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEITH SPICER LIMITED
 

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 the 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.

Matters on which we are required to report by exception

In 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.

- 7 -

 
KEITH SPICER LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEITH SPICER LIMITED
 

Responsibilities of Directors

As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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 intend either to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation.

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.  

- 8 -

 
KEITH SPICER LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEITH SPICER LIMITED
 


We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation and the Companies Act 2006. 
 
In addition, we evaluated the directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of override of controls, and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition (which we pinpointed to the cut off assertion) and significant one-off or unusual transactions.

Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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

Use of the audit 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.




Stephen Mills (Senior statutory auditor)
  
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor 
5th Floor Merck House
Seldown Lane
Poole
Dorset
BH15 1TW

24 May 2024
- 9 -

 
KEITH SPICER LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
21,546,973
17,411,572

Cost of sales
  
(18,327,883)
(14,876,990)

Gross profit
  
3,219,090
2,534,582

Distribution costs
  
(686,426)
(672,966)

Administrative expenses
  
(1,982,495)
(1,939,678)

Other operating income
 5 
98,556
85,285

Operating profit
 6 
648,725
7,223

Interest receivable and similar income
 10 
12,726
2,329

Interest payable and similar expenses
 11 
(705,841)
(317,213)

Other finance (expenses)/ income
 12 
(16,865)
26,000

Loss before tax
  
(61,255)
(281,661)

Deferred tax
 13 
-
243,078

Current tax
 13 
-
-

Loss for the financial year
  
(61,255)
(38,583)

Other comprehensive income:
  

Items that will not be reclassified to profit or loss:
  

Remeasurement of net defined benefit liability
  
(434,000)
(1,492,000)

Movements of deferred tax relating to pension deficit
  
108,000
363,541

Total other comprehensive income
  
(326,000)
(1,128,459)

  

Total comprehensive expense for the year
  
(387,255)
(1,167,042)

The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations. 

The notes on pages 16 to 41 form part of these financial statements.

- 10 -

 
KEITH SPICER LIMITED
REGISTERED NUMBER: 00348565

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 14 
20,824
30,208

Tangible assets
 15 
4,408,263
4,731,911

Investments
 17 
4
4

Investment Property
 16 
963,728
963,728

  
5,392,819
5,725,851

Current assets
  

Stocks
 18 
4,505,448
6,044,835

Debtors: amounts falling due within one year
 19 
4,473,179
3,596,806

Cash at bank and in hand
 20 
838,378
426,616

  
9,817,005
10,068,257

Creditors: amounts falling due within one year
 21 
(2,955,482)
(4,785,517)

Net current assets
  
 
 
6,861,523
 
 
5,282,740

Total assets less current liabilities
  
12,254,342
11,008,591

Creditors: amounts falling due after more than one year
 22 
(12,800,000)
(11,599,994)

  

Pension liability
  
(644,000)
(211,000)

Net liabilities
  
(1,189,658)
(802,403)


Capital and reserves
  

Called up share capital 
 26 
3,042,000
3,042,000

Share premium account
  
529
529

Capital redemption reserve
  
13,000
13,000

Profit and loss account
  
(4,245,187)
(3,857,932)

Total equity
  
(1,189,658)
(802,403)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 May 2024.

................................................
C J Owen
Director

The notes on pages 16 to 41 form part of these financial statements.

- 11 -

 
KEITH SPICER LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£
£


At 1 January 2022
3,042,000
529
13,000
(2,690,890)
364,639


Comprehensive income for the year

Loss for the year

-
-
-
(38,583)
(38,583)

Actuarial losses on pension scheme
-
-
-
(1,128,459)
(1,128,459)


Other comprehensive income for the year
-
-
-
(1,128,459)
(1,128,459)


Total comprehensive income for the year
-
-
-
(1,167,042)
(1,167,042)



At 1 January 2023
3,042,000
529
13,000
(3,857,932)
(802,403)


Comprehensive income for the year

Loss for the year
-
-
-
(61,255)
(61,255)

Actuarial losses on pension scheme
-
-
-
(326,000)
(326,000)


Other comprehensive expense for the year
-
-
-
(326,000)
(326,000)


Total comprehensive expense for the year
-
-
-
(387,255)
(387,255)


At 31 December 2023
3,042,000
529
13,000
(4,245,187)
(1,189,658)


The notes on pages 16 to 41 form part of these financial statements.

- 12 -

 
KEITH SPICER LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Loss for the financial year
(61,255)
(38,583)

Adjustments for:

Amortisation of intangible assets
9,384
9,384

Depreciation of tangible assets
385,923
497,932

Loss on disposal of tangible assets
5,865
-

Interest paid
705,841
317,213

Interest received
(12,726)
(2,329)

Taxation credit
-
(243,078)

Decrease/(increase) in stocks
1,539,387
(1,306,052)

Increase in debtors
(1,266,584)
(689,824)

Decrease/(increase) in amounts owed by groups
498,211
(197,097)

Increase/(decrease) in creditors
423,867
(118,402)

(Decrease)/increase in amounts owed to groups
(2,253,902)
1,560,248

Decrease in pension liabilities
(1,000)
(38,000)

Net cash generated used in operating activities

(26,989)
(248,588)


Cash flows from investing activities

Purchase of tangible fixed assets
(68,140)
(130,133)

Interest received
12,726
2,329

Net cash used in investing activities

(55,414)
(127,804)
- 13 -

 
KEITH SPICER LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022

£
£



Cash flows from financing activities

Repayment of loans
(11,099,994)
(100,000)

New loans from group undertakings
12,300,000
-

Interest paid
(705,841)
(317,213)

Net cash generated/(used) in financing activities
494,165
(417,213)

Net increase/(decrease) in cash and cash equivalents
411,762
(793,605)

Cash and cash equivalents at beginning of year
426,616
1,220,221

Cash and cash equivalents at the end of year
838,378
426,616


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
838,378
426,616

838,378
426,616


The notes on pages 16 to 41 form part of these financial statements.

- 14 -

 
KEITH SPICER LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




Restated At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

426,616

411,762

838,378

Debt due after 1 year

(11,599,994)

(1,200,006)

(12,800,000)


(11,173,378)
(788,244)
(11,961,622)

The notes on pages 16 to 41 form part of these financial statements.

- 15 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Keith Spicer Limited (No. 00348565) is a private company limited by shares incorporated in England and Wales. Its registered office is 5 Cobham Road, Ferndown Industrial Estate, Wimborne, Dorset, BH21 7PN.
The principal activity of the Company continues to be that of tea importers, blenders, packers and packaged tea exporter. The directors do not envisage any change in the nature of this business for the foreseeable future. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The financial statements have been presented in Pounds Sterling as this is the currency of the primary economic environment in which the Company operates, and are rounded to the nearest pound.

The following principal accounting policies have been applied:

  
2.2

Group accounts

The financial statements present information about the Company as an individual undertaking and not about its group. The Company's subsidiaries were dormant during the year and not material for the purpose of giving a true and fair view. The Company has therefore taken advantage of the exemptions provided by section 402 of the Companies Act 2006 not to prepare group accounts.

- 16 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

These conditions are satisfied at the point of despatch to the customer and the goods are invoiced on this date.

  
2.4

Going concern

In determining whether the Company’s financial statements can be prepared on a going concern basis, the directors considered the business activities, together with the factors likely to affect its future development, performance and position; these are set out in the Strategic Report.
The business forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Company should be able to operate within the level of its current cash resources and continued support of the parent company.
As at the date of this report, the directors have a reasonable expectation that the Company has adequate resources to continue in business from 12 months from the date of signing these financial statements. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

 
2.5

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Other intangibles
-
10
years
Trademarks
-
10
years

Amortisation is included in ‘administrative expenses’ in the profit and loss account.

- 17 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.6

Tangible fixed assets

Tangible fixed assets are stated at historic cost less accumulated depreciation. Depreciation is not charged on freehold land. 
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
50 years straight line
Plant & machinery
-
3 - 10 years straight line
Motor vehicles
-
4 - 5 years straight line
Fixtures & fittings
-
3 - 20 years straight line
Assets in the course of construction
-
are not depreciated

Depreciation is charged to 'administrative expenses' in the Statement of comprehensive income.

 
2.7

Operating leases: the Company as lessor

Rental income from operating leases is credited to the Statement of Comprehensive Income on a straight line basis over the lease term.

 
2.8

Investment property

Investment property is carried at fair value determined annually by the directors and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.

 
2.9

Stocks and work in progress

Stocks and work in progress are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.

- 18 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Deferred taxation

Full provision is made for deferred tax assets and liabilities arising from all timing differences between the recognition of gains and losses in the financial statements and recognition in the tax computation.
A net deferred tax asset is recognised only if it can be regarded as more likely than not that there will be suitable taxable profits from which future reversal of underlying timing differences can be deducted.
Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse.

 
2.11

Foreign currencies

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the Balance Sheet date.
Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction. Exchange gains and losses are recognised in profit and loss.
 
- 19 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.12

Pensions

Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds. 
Defined benefit pension plan
The Company operates a defined benefit pension scheme and the pension charge is based on a full actuarial valuation dated 31 December 2023.
The liability recognised in the Balance Sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the Balance Sheet date less the fair value of plan assets at the Balance Sheet date (if any) out of which the obligations are to be settled.
The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.

- 20 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.13
Financial instruments

The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Profit and Loss Account.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the Balance Sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
Derivatives, including 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 income as appropriate. The Company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
 
  




- 21 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Certain reported amounts of assets and liabilities are subject to estimates and assumptions. Estimates and judgements by management are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Judgements and estimates are reviewed on an ongoing basis and actual results may differ from these estimates. The areas involving a higher degree of judgements or complexity or areas where assumptions and estimates are significant to the financial statements are as follows:
3.1 Critical judgements in applying the Company’s accounting policies
Deferred tax assets
Deferred tax assets are recognised for unused tax-loss carry forwards and unused tax credits to the extent that realisation of the related tax benefit is probable. The assessment of the probability with regard to the realisation of the tax benefit involves assumptions based on the history of the entity and budgeted data for the future.
3.2 Key sources of estimation uncertainty
Estimating useful life of key assets
The useful lives are estimated having regard to such factors as asset maintenance, rate of technical and commercial obsolescence, and asset usage. The useful lives of key assets are reviewed annually.
Investment property
The investment property valuation is reviewed annually by the directors. The property is stated at fair value with changes in the fair value being recognised in the Statement of Comprehensive Income.
Defined benefit liabilities
Certain assumptions are used relating to the calculation of the defined benefit liabilities. These assumptions comprise the expected return on plan assets as well as future salary increases and future pension increases which have been derived from estimates based on past experience. The expected return on the plan assets takes into consideration the investment policy relating to the assets and their projected returns.

- 22 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

The whole of the turnover is attributable to the principal activity of the entity.

Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
18,990,072
14,231,202

Rest of Europe
1,476,864
1,257,093

Rest of the world
1,080,037
1,923,277

21,546,973
17,411,572



5.


Other operating income

2023
2022
£
£

Other operating income
17,114
8,202

Net rents receivable
81,442
77,083

98,556
85,285



6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation of tangible fixed assets
385,923
497,932

Amortisation of intangible assets
9,384
9,384

Exchange differences
2,704
15,927

Defined contribution pension cost
371,749
357,271

- 23 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
42,625
40,596


8.

Employees

2023
2022
        £
        £
Wages and salaries

4,119,660

3,517,871
 
Social security costs

369,417

324,959
 
Cost of defined contribution scheme

371,749

357,271
 

4,860,826

4,200,101
 

The average monthly number of employees, including the directors, during the year was as follows:

2023
2022
No.
No.
Production

58

54
 
Distribution

10

8
 
Administration

57

54
 
Directors

2

7
 

127

123
 



- 24 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Directors' remuneration

2023
2022
£
£



Directors' emoluments
268,878
266,930

Company pension contributions to defined contribution pension schemes
48,941
15,953

317,819
282,883

There were 2 directors in the defined contribution pension scheme (2022: 2).
The highest paid director received remuneration of £163,086 (2022: £136,645).
The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £13,500 (2022: £8,163).
The emoluments disclosed above include £176,586 (2022: £138,075) of remuneration for directors which was recharged to a fellow subsidiary of the group for services provided.
Directors consider themselves to be the only key management personnel. 


10.


Interest receivable

2023
2022
£
£


Other interest receivable
12,726
2,329


11.


Interest payable and similar expenses

2023
2022
£
£


Loans from group undertakings
705,841
317,213


12.


Other finance (expenses)/income

2023
2022
£
£



Loss on sale of fixed assets
(5,865)
-

Net interest (expense)/income on net defined benefit liability/asset
(11,000)
26,000

(16,865)
26,000

- 25 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Taxation


2023
2022
£
£



Current tax on loss for the year
-
-


Total current tax
-
-

Deferred tax


Origination and reversal of timing differences
-
(236,163)

Adjustments in respect of prior periods
-
(339)

Effect of changes in tax rates
-
(6,576)

Total deferred tax
-
(243,078)


Taxation on loss
-
(243,078)

Factors affecting tax (credit)/charge for the year

The tax assessed for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 23.52% (2022: 19%). The differences are explained below:

2023
2022
£
£


Profit/(loss) before tax
(61,255)
(281,661)


Profit/(loss) multiplied by standard rate of corporation tax in the UK of 23.52% (2022: 19%)
(14,407)
(53,516)

Effects of:


Expenses not deductible for tax purposes
273
57

Remeasurement of deferred tax for changes in tax rates
173
-

Fixed asset differences
16,629
6,270

Other permanent differences
259
6

Movement in deferred tax not recognised
(2,927)
26,358

Adjustments to tax charge in respect of prior periods - deferred tax
-
(339)

Movements in deferred taxation
-
(221,914)

Total tax (credit)/charge for the year
-
(243,078)

- 26 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
13.Taxation (continued)


Factors that may affect future tax charges

The Company has taxable losses to carry forward against future taxable profits of approximately £9,975,558 (2022: £10,073,475).
No deferred tax asset has been recognised in relation to these losses due to the uncertain timing over the generation of taxable profits.
The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax has increased from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.


14.


Intangible assets




Other intangibles
Trademarks
Total

£
£
£



Cost


At 1 January 2023
48,832
45,000
93,832



At 31 December 2023

48,832
45,000
93,832



Amortisation


At 1 January 2023
33,624
30,000
63,624


Charge for the year
4,884
4,500
9,384



At 31 December 2023

38,508
34,500
73,008



Net book value



At 31 December 2023
10,324
10,500
20,824



At 31 December 2022
15,208
15,000
30,208



- 27 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Tangible fixed assets





Freehold property
Plant & machinery
Motor vehicles
Fixtures & fittings
Assets in the course of construction
Total

£
£
£
£
£
£



Cost or valuation


At 1 January 2023
4,193,490
9,470,282
16,825
439,173
12,752
14,132,522


Additions
-
-
-
-
68,140
68,140


Disposals
-
(23,420)
-
-
-
(23,420)


Transfers between classes
-
23,350
-
-
(23,350)
-



At 31 December 2023

4,193,490
9,470,212
16,825
439,173
57,542
14,177,242



Depreciation


At 1 January 2023
667,192
8,294,417
16,825
422,177
-
9,400,611


Charge for the year
77,292
304,523
-
4,108
-
385,923


Disposals
-
(17,555)
-
-
-
(17,555)



At 31 December 2023

744,484
8,581,385
16,825
426,285
-
9,768,979



Net book value



At 31 December 2023
3,449,006
888,827
-
12,888
57,542
4,408,263



At 31 December 2022
3,526,298
1,175,865
-
16,996
12,752
4,731,911

Included in land and buildings is freehold land of £680,240 (2022: £680,240) which is not depreciated.

- 28 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Investment property


Freehold investment property

£



Valuation


At 1 January 2023
963,728



At 31 December 2023
963,728

The directors obtained a valuation from third party research. The property is stated at fair value with changes in the fair value being recognised in the Statement of Comprehensive Income. The directors obtained a valuation from in house research.



If the investment properties had been accounted for under the historic cost accounting rules, the properties would have been measured as follows:

2023
2022
£
£


Historic cost
1,084,323
1,084,323

Accumulated depreciation and impairments
(189,651)
(172,387)

894,672
911,936

- 29 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Investments





Investments in subsidiary companies
Unlisted investments
Total

£
£
£



Cost or valuation


At 1 January 2023
4
100,000
100,004



At 31 December 2023

4
100,000
100,004



Impairment


At 1 January 2023
-
100,000
100,000



At 31 December 2023

-
100,000
100,000



Net book value



At 31 December 2023
4
-
4



At 31 December 2022
4
-
4

- 30 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Big T (Tea) Limited
5 Cobham Road, Ferndown Industrial Estate, Wimborne, Dorset, BH21 7PN
Ordinary
100%
St James's Teas Limited
5 Cobham Road, Ferndown Industrial Estate, Wimborne, Dorset, BH21 7PN
Ordinary
100%
Dorset Tea Limited
5 Cobham Road, Ferndown Industrial Estate, Wimborne, Dorset, BH21 7PN
Ordinary
100%
Tea India Ltd
5 Cobham Road, Ferndown Industrial Estate, Wimborne, Dorset, BH21 7PN
Ordinary
100%

Each of the above subsidiaries are dormant and have made no profit or loss in the year and have equity amounting to £1.

- 31 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Stocks

2023
2022
£
£

Raw materials and consumables
3,279,030
4,907,706

Work in progress
315,888
382,626

Finished goods and goods for resale
910,530
754,503

4,505,448
6,044,835


Stock is stated net of a provision of £147,993 (2022: £79,713).


19.


Debtors

As restated
2023
2022
£
£


Trade debtors
3,704,672
2,591,667

Amounts owed by group undertakings
80,108
578,319

Other debtors
275,155
276,160

Prepayments and accrued income
252,244
97,660

Deferred taxation (note 25)
161,000
53,000

4,473,179
3,596,806


The amounts owed by group undertakings are unsecured, interest free and payable on demand.
The 2022 comparative numbers have been restated to reclassify amounts relating to group undertakings from trade debtors.


20.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
838,378
426,616


- 32 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
1,428,477
1,171,316

Amounts owed to group undertakings
1,086,437
3,340,339

Other taxation and social security
113,791
124,812

Other creditors
10,730
12,000

Accruals and deferred income
316,047
137,050

2,955,482
4,785,517


The amounts owed to group undertakings are unsecured, interest free and repayable on demand.
The 2022 comparative numbers have been restated to reclassify amounts relating to group undertakings from trade creditors.


22.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Loans owed to group undertakings
12,800,000
11,599,994



23.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£


Amounts falling due 1-2 years

Loans owed to group undertakings
12,800,000
11,599,994

12,800,000
11,599,994


Loans of £12,800,000 (2022: £500,000) are unsecured, attract interest at 1.75% over SONIA and payable on demand on or after 31 December 2024.
Loans of £nil (2022: £11,099,994) are unsecured, attract interest at 1.25% over SONIA and payable on demand on or after 31 December 2024.

- 33 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.


Financial instruments

2023
2022
£
£

Financial liabilities


Financial liabilities measured at fair value through profit or loss
(1,878)
(9,557)




The Company has entered into certain forward exchange contracts which are unsettled at the year end. The fair value of these derivatives have been determined using valuation techniques based on market data.
At the year end the total foreign currency contracts relate to specific firm commitments to purchase $363,809 (2022: $1,848,037) to repay loans and interest over the next 3 years, and to obtain currency for purchases of tea over the next year.
Financial liabilities measured at fair value through profit or loss comprise forward exchange contracts.


All other financial assets and liabilities are measured at amortised cost.


25.


Deferred taxation




2023
2022


£

£






At beginning of year
53,000
(553,619)


Credited to profit or loss
-
243,078


Credited to other comprehensive income
108,000
363,541



At end of year
161,000
53,000

The deferred tax asset is made up as follows:

2023
2022
£
£


Pension asset
161,000
53,000

161,000
53,000

- 34 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

26.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



20,420 (2022: 20,420) Ordinary shares of £100 each
2,042,000
2,042,000
10,000 (2022: 10,000) Preference shares of £100 each
1,000,000
1,000,000

3,042,000

3,042,000

Share premium 
The reserve is the premium paid by shareholders over the notional value of the share purchases in the Company. 
Capital redemption reserve 
This reserve reflects amount paid by the Company to redeem shares. 
Profit and loss account 
This reserve reflects the accumulated results for the Company to 31 December 2023. 


- 35 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

27.


Pension commitments

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £371,749 (2022: £357,271). At the year end amounts payable to the scheme totalled £nil (2022: £nil).

Keith Spicer also operate a defined benefit pension scheme. The Scheme's assets are held in a separate trustee-administered fund to meet long-term pension liabilities to past and present employees. The trustees of the Scheme are required to act in the best interest of the Scheme's beneficiaries. The appointment of members of the trustee board is determined by the trust documentation. 

The liabilities of the Scheme are measured by discounting the best estimate of future cash flows to be paid out of the Scheme using the projected unit method. This amount is reflected in the surplus/(deficit) in the Balance Sheet. The projected unit method is an accrued benefits valuation method in which the Scheme's liabilities make allowance for projected earnings.
The liabilities set out in this note have been calculated based on the most recent full actuarial valuation at 1 October 2016, updated to 31 December 2023. The results of the calculations and the assumptions adopted are shown below.
Accrual of benefit within the Scheme ceased from 14 April 2014.



Reconciliation of present value of plan liabilities:


2023
2022
£
£


At the beginning of the year
(7,225,000)
(11,215,000)

Interest cost
(354,000)
(208,000)

Actuarial gains
(363,000)
4,136,000

Benefits paid
312,000
322,000

Experience losses on liabilities
(13,000)
(248,000)

Amended mortality assumptions losses on liabilities
151,000
(12,000)

At the end of the year
(7,492,000)
(7,225,000)

- 36 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
27.Pension commitments (continued)



Reconciliation of present value of plan assets:


2023
2022
£
£


At the beginning of the year
7,014,000
12,458,000

Interest income
343,000
234,000

Actuarial losses
(209,000)
(5,368,000)

Contributions
12,000
12,000

Benefits paid
(312,000)
(322,000)

At the end of the year
6,848,000
7,014,000


Composition of plan assets:



2023
2022
£
£


Fair value of plan assets
6,848,000
7,014,000

Present value of plan liabilities
(7,492,000)
(7,225,000)

Net pension scheme liability
(644,000)
(211,000)


The amounts recognised in profit or loss are as follows:

2023
2022
£
£


Net interest income on net defined benefit asset/(liability)
11,000
(26,000)

Total
11,000
(26,000)


Actual return on scheme assets
134,000
(5,134,000)

134,000
(5,134,000)

- 37 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
27.Pension commitments (continued)


Composition of plan assets were as follows:

2023
2022
£
£


Equities
936,000
1,177,000

Property
438,000
491,000

LDI
2,264,000
2,114,000

Bonds
878,000
1,142,000

Gilts
588,000
237,000

Other
58,000
-

Cash
43,000
170,000

Annuities
1,643,000
1,683,000

6,848,000
7,014,000

2023
2022
£
£

Analysis of actuarial (loss)/gain recognised in Other Comprehensive Income


Actual return less interest income included in net interest income
(209,000)
(5,368,000)

Experience gains and losses arising on the scheme liabilities
(13,000)
(248,000)

Changes in assumptions underlying the present value of the scheme liabilities
(212,000)
4,124,000

(434,000)
(1,492,000)

- 38 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
27.Pension commitments (continued)


Principal actuarial assumptions at the reporting date (expressed as weighted averages):

2023
2022
%
%
Discount rate at 31 December


4.60

5.00
 
Inflation (RPI)


3.10

3.40
 
Inflation (CPI)


2.60

3.00
 
Pension increases



 
- CPI min 3% pa max 5% pa


3.50

3.50
 
- RPI max 2.5% pa


2.00

2.30
 
Expected return on assets


6.30

5.00
 
Mortality rates



 
- Base table


S3PXA

S3PXA
 
- Allowance for future improvements


CMI 2022 [1%]

CMI 2021 [1%]
 





- 39 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

28.

Related party transactions

During the year ended 31 December 2023 the Company had the following loans with group entities:

Opening balance 2023
Capital advanced 2023
Capital repaid
2023
Closing balance 2023
        £
        £
        £
        £
Harris Freeman Asia loan

500,000

12,300,000

-
 
12,800,000
 
Harris Freeman & Co Inc

11,099,994

-

(11,099,994)
 
-
 

11,599,994

12,300,000

(11,099,994)
 
12,800,000
 

Opening balance 2022
Capital advanced 2022
Capital repaid
2022
Closing balance 2022
        £
        £
        £
        £
Harris Freeman Asia loan

600,000

-

(100,000)
 
500,000
 
Harris Freeman & Co Inc

11,099,994

-

-
 
11,099,994
 

11,699,994

-

(100,000)
 
11,599,994
 

During the year ended 31 December 2023, goods were purchased from companies within the Group and under common control with Keith Spicer Limited totalling £2,417,791 (2022: £3,646,081) and sold £180,714 (2022: £1,307,312).
During the year the Company's key management personnel were remunerated a total of £938,489 (2022: £669,560).
At  the year end, in addition to the loan balances summarised above, £80,108 (2022: £578,319) was due from and £1,086,437 (2022: £3,340,339) due to companies within the Group under common control.
There are charges from a Company under common control for back office support functions of £87,297 (2022: £83,151).


29.


Commitments under operating leases as a lessor

At 31 December 2023 the Company had future receipts due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
75,207
75,207

Later than 1 year and not later than 5 years
-
75,207

Total
75,207
150,414

- 40 -

 
KEITH SPICER LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

30.


Post balance sheet events

There have been no significant events affecting the Company since the year end. 


31.


Parent company and controlling party

The immediate parent company is Harris Freeman Asia Limited, a company registered in the British Virgin Islands. The ultimate parent undertaking and controlling party is Harris Freeman & Co. Inc, registered in the United States of America. Group accounts are prepared and are not available to the public.

- 41 -