Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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KEPAK KIRKHAM LIMITED
CONTENTS
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KEPAK KIRKHAM LIMITED
COMPANY INFORMATION
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KEPAK KIRKHAM LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company is engaged in contract manufacturing. The Company's turnover was £103,258,507 (2022 - £108,755,888). Net assets at 31 December 2023 amounted to £20,717,919 (2022 - £17,699,655).
Economic Risk
The Company’s trading is significantly influenced by (i) the availability and pricing of high quality beef and lamb stocks, (ii) the risk of increased interest rates and/or inflation having an adverse impact on served markets, (iii) the risk of unrealistic increases in wages or infrastructural cost impacting adversely on competitiveness of the Company and its principal customers and (iv) the risk of adverse exchange movements. The Company actively manages its purchasing activity by innovative product sourcing to ensure an adequate supply of stocks to meet market requirements. These risks are also managed by strict control of costs. Foreign exchange exposure is actively managed using both forward foreign exchange contracts and currency contracts. Competition Risk The Company has traditionally been at risk from competitors, using tactics such as predatory pricing, looking to damage key customer relationships. The Directors of the Company manage competition risk through paying close attention to customer service levels and by distinguishing the Company from our competitors through innovation of both products and services. Environmental Risk The Company is continually at risk from the various animal and human health scares that are linked to food. In recent years, this has included foot and mouth disease, avian flu and bovine spongiform encephalopathy. The Company has developed product quality and traceability systems to minimise the potential risks from all known sources. Financial Risk The Company has budgetary and financial reporting procedures, supported by appropriate key performance indicators, to manage credit, liquidity and other financial risk. Financial Instruments The Company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are largely conducted in sterling, with the only foreign currency transactions being covered by suitable currency contracts to minimise exposure to exchange rate volatility. The Company does not enter into any formally designated hedging arrangements.
Management use a range of performance measures to monitor and manage the business. The performance measures are as set out below:
Movement in Turnover 2023 vs. 2022 (5.1%) 2022 vs. 2021 14.6% 2021 vs. 2020 (2.0%) Movement in Operating Profit 2023 vs. 2022 (4.3%) 2022 vs. 2021 13.7% 2021 vs. 2020 (2.0%)
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KEPAK KIRKHAM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors of the Company must act in a way they consider, in good faith, would most likely promote the success of the Company for the benefits of its members as a whole, and in doing so have regard (amongst other matters) to:
• The likely consequence of any decision in the long term • The interest of the Company’s employees • The need to foster the Company’s business relationships with suppliers, customer and others • The impact of the Company’s operations on the community and the environment • The desirability of the Company maintaining a reputation for high standards of business conduct • The need to act fairly as between members of the Company The Board considers that it has complied in all material respects with their duties under Section 172 (1) of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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KEPAK KIRKHAM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their report and the financial statements for the year ended 31 December 2023.
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments 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;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £3,018,264 (2022 - £1,809,647).
No dividends (2022 - €Nil) or transfers to reserves are recommended by the Directors.
The Directors who served during the year were:
The Company will seek to minimise adverse impacts on the environment from its activities, whilst continuing to address health, safety and economic issues. The Company has complied with all applicable legislation and regulations.
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KEPAK KIRKHAM LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
It is the intention of the Directors to continue to develop the activities of the Company.
The Company is committed to a programme of research and development activities which is expected to result in the development of new production and packaging techniques.
The Company places considerable value on the involvement of its employees and has continued its previous practice of keeping them informed on matters affecting them as employees and on the various factors affecting the performance of the Company. This is achieved through formal and informal meetings. In addition, some employees receive an annual bonus related to the overall profitability of the Company.
The Company and its Directors ensure the exceptional customer satisfaction is at the core of the business and it is recognised that, in order to perform successfully, engagement with employees and support where relevant is required as the employees represent the frontline of the delivery of the service.
The Company culture is imperative to uphold and this is done so via the Directors and senior management team who are in direct contact with the employees on a regular basis to ensure all objectives are aligned and a good working environment exists within the Company. The Directors, via senior leadership, ensure the setting and maintaining of core company values, and ensure ethical business behaviours. The Company culture also includes a focus on building and maintaining relationships with key suppliers and customers, whose support is paramount to the ongoing success of the business. Key suppliers are kept up to date with business developments and offered opportunities as they arise for continued and growing business. Key customers have built a strong relationship with increased business and a common trust on the level of service provided.
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KEPAK KIRKHAM LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
STREAMLINED ENERGY AND CARBON REPORTING (SECR) DISCLOSURE
The SECR disclosure presents our carbon footprint within the United Kingdom across Scope 1, 2 and to some extent Scope 3 emissions. It contains an appropriate intensity metric, the total energy use of electricity, gas and transport fuel and a summary of energy efficiency actions taken during the relevant financial year.
The Company continues to achieve direct savings in energy and associated carbon emissions, through operational and technological improvements, including;
∙Achieved science-based targets for 2023
∙Held dashboard meetings every second Wednesday. Wattics system - Electricity usage monitoring system with 86 sub-metres across the site and is used to calculate efficiency.
∙All lighting in office/changing rooms replaced with LED - all site is equipped with LED
∙Line upgrades replacing obsolete machines, replaced with more energy efficient machine, will continue in 2024.
SECR disclosure has been prepared in line with the Company's annual accounts made up to 31 December 2023. Using operational control approach, GHG Emissions reporting are in line with the Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard. Relevant data is prepared on a monthly basis by our external energy management supplier. The validity, accuracy and completeness of the data was checked and used to calculate the GHG emissions for the Group.
Emissions are calculated as activity data multiplied by emission factors (DEFRA, 2023 for all emissions factors and conversion factors, source: https://www.gov.uk/government/publications/greenhouse-gas reporting-conversion-factors-2023); kWh consumption is calculated as activity data multiplied by conversion factors (Federal Register EPA for natural gas and gasoline (petrol) (https://www.ecfr.gov/cgibin/text idx?SID=ae265d7d6f98ec86fcd8640b9793a3f6&mc=true&node=pt40.23.98&rgn=div5#ap40.23.98_138.1), EPA GHG Emission Factors Hub for natural gas and gasoline (petrol) (https://www.epa.gov/climateleadership /center -corporate-climate leadership-ghg-emission-factors-)
and U.S. Energy Information Administration for diesel (https://www.eia.gov/totalenergy /data/monthly /pdf/sec12_2.pdf ).
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KEPAK KIRKHAM LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Where applicable consumption was converted to kWh using conversion factors linked above, while emissions were calculated with the DEFRA emission factors. Transport data was calculated from litres and mileage to kWh and GHG emissions using the method above. In case exact vehicle size was not known average vehicle size-unknown fuel’s conversion factors were used to calculate emissions, according to the DEFRA, 2023 for all emissions factors set.
Based on the nature of the business, as well as following the recommendations of the SECR legislation, the Company chose the following intensity metric: Tonnes of total production. This metric shows the development of the Company's energy efficiency in line with the production and shows great transparency expressing the business’s annual emissions. Due to rounding there might be a minor difference compared to the actual GHG emissions (no more than 1%).
The auditors, Forvis Mazars Chartered Accountants and Statutory Auditors, will 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.
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KEPAK KIRKHAM LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEPAK KIRKHAM LIMITED
We have audited the financial statements of Kepak Kirkham 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 the related notes, 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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.
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KEPAK KIRKHAM LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEPAK KIRKHAM LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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KEPAK KIRKHAM LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEPAK KIRKHAM LIMITED (CONTINUED)
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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the Company and its industry, we identified that the principal risks of non-compliance with laws and regulations related to the UK tax legislation, pensions legislation, employment regulation and health and safety regulation, anti-bribery, corruption and fraud, money laundering, non-compliance with implementation of government support schemes relating to COVID-19, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, such as the Companies Act 2006. 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 judgments and assumptions in significant accounting estimates and significant one-off or unusual transactions. Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to: • Discussing with the Directors and management their policies and procedures regarding compliance with laws and regulations; • Communicating identified laws and regulations throughout our 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. 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 Auditors' Report.
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KEPAK KIRKHAM LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEPAK KIRKHAM LIMITED (CONTINUED)
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 Auditors' 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.
for and on behalf of
Chartered Accountants and Statutory Audit Firm
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KEPAK KIRKHAM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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KEPAK KIRKHAM LIMITED
REGISTERED NUMBER: 05101877
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 30 form part of these financial statements.
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KEPAK KIRKHAM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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KEPAK KIRKHAM LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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KEPAK KIRKHAM LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company is limited by shares and incorporated in the United Kingdom, having its registered office at The Snackhouse, St. Georges Park, Kirkham, Preston, PR4 2DZ. The Company's registered number is 05101877. The Company's principal activity continued to be contract manufacturing.
2.ACCOUNTING POLICIES
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 judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
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:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Finished goods cost is calculated in two main ways depending on the nature of the stock: 1. Standard costing – raw material costs together with an appropriate amount of direct labour and overhead is included in the stocks valuation. 2. Estimate of cost based on selling price – where actual costs cannot be accurately ascertained, an approximation is made by deducting the costs of marketing, distribution and selling from the net invoice price.
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
When a financial asset or financial liability is recognised initially, the Company shall measure it at its fair value, which is normally the transaction price (including transaction costs except in the initial measurement of financial assets and liabilities that are measured at fair value through profit or loss). At the end of each reporting period, the Company shall measure all financial instruments within the scope of Section 12 at fair value and recognise changes in the fair value in profit or loss.
Functional and presentation currency
Transactions and balances
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
Provision for Risks and Liabilities: A provision is recognised in the balance sheet when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits would be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the time value of money and, where appropriate, the risks specific to the liability.
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Analysis of turnover by country of destination:
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
9.TAXATION (CONTINUED)
In 2021 an increase in the corporation tax rate to 25% with effect from 1 April 2023 was substantively enacted. The 23.5% rate used above reflects 9 months of this new rate and 3 months of the previous rate of 19%.
In 2021, the Organisation for Economic Co-operation and Development published the Global Anti-Base Erosion Model Rules (Pillar 2). These rules will impose a top-up tax on the profits of subsidiaries of multinational enterprise groups that are taxed at an effective tax rate of less than 15 percent. Kepak Holdings Group (“the Group”) is within scope of Pillar 2 legislation. Since the Pillar 2 legislation was not effective in respect of the Group at the reporting date, the Group has no related current tax exposure for the current year. The Group applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar 2 income taxes, as provided in the amendments to FRS 102. The Group is still in the process of assessing the impact of Pillar 2 income tax legislation on its group entities.
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Profit and loss account
The Company operates a defined contributions 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 £385,483 (2022 - £413,747). Contributions totalling £16,104 (2022 - £50,707) were payable to the fund at the balance sheet date and are included in creditors.
21.OTHER FINANCIAL COMMITMENTS
The Company’s bankers have given guarantees to the UK Revenue authorities on behalf of the Company amounting to £100k (2022 – £100k).
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company's parent is Kepak Holdings; the ultimate holding company is Kingate Investments Unlimited, an unlimited company incorporated in the Isle of Man.
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