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Registered number: 05101877








img1c0e.png





KEPAK KIRKHAM LIMITED




ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

 
KEPAK KIRKHAM LIMITED
 

CONTENTS



Page
Company Information
 
 
1
Strategic Report
 
 
2 - 3
Directors' Report
 
 
4 - 7
Independent Auditors' Report
 
 
8 - 11
Statement of Comprehensive Income
 
 
12
Statement of Financial Position
 
 
13
Statement of Changes in Equity
 
 
14
Statement of Cash Flows
 
 
15
Analysis of Net Debt
 
 
16
Notes to the Financial Statements
 
 
17 - 30


 
KEPAK KIRKHAM LIMITED
 

COMPANY INFORMATION


DIRECTORS
Simon Walker 
Robert Grogan 
John Horgan 




COMPANY SECRETARY
Barry McChesney
Walter Martin (appointed 21 December 2023)



REGISTERED NUMBER
05101877



REGISTERED OFFICE
The Snackhouse
St. Georges Park

Kirkham

Preston

PR4 2DZ




INDEPENDENT AUDITORS
Forvis Mazars
Chartered Accountants and Statutory Audit Firm

Block 3 - Harcourt Centre

Harcourt Road

Dublin 2




BANKERS
Allied Irish Banks
City Business Centre

26 Finsbury Square

London

EC2A 1DS




SOLICITORS
Forbes Solicitors
Oak House

28 Sceptre Way

Walton Summit

Preston

Lancashire

PR5 6AW




Page 1

 
KEPAK KIRKHAM LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

BUSINESS REVIEW
 
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).

PRINCIPAL RISKS AND UNCERTAINTIES
 
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.

FINANCIAL KEY PERFORMANCE INDICATORS
 
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%)

Page 2

 
KEPAK KIRKHAM LIMITED
 

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

DIRECTORS' STATEMENT OF COMPLIANCE WITH DUTY TO PROMOTE THE SUCCESS OF THE COMPANY
 
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.





Robert Grogan
Director

Date: 19 September 2024

Page 3

 
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.

DIRECTORS' RESPONSIBILITIES STATEMENT

The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the 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 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 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 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.

RESULTS AND DIVIDENDS

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.

DIRECTORS

The Directors who served during the year were:

Simon Walker 
Robert Grogan 
John Horgan 

ENVIRONMENTAL MATTERS

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.

Page 4

 
KEPAK KIRKHAM LIMITED
 

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

FUTURE DEVELOPMENTS

It is the intention of the Directors to continue to develop the activities of the Company.

RESEARCH AND DEVELOPMENT ACTIVITIES

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.

ENGAGEMENT WITH EMPLOYEES

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.

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS

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.

DISABLED EMPLOYEES

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 with the Company continues and that appropriate training is arranged. It is the policy of the Company that the training, career development and promotion of disabled persons should, as far as possible, be identical with that of other employees.

Page 5

 
KEPAK KIRKHAM LIMITED
 

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


GREENHOUSE GAS EMISSIONS, ENERGY CONSUMPTION AND ENERGY EFFICIENCY ACTION

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.


2023
2022
Energy consumption used to calculate emissions (kWh) 
31,400,247
31,085,375
Emissions from combustion of gas (Scope 1) tCO2e
3,589
3,359
Emissions from combustion of fuel for transport purposes (Scope 1) tCO2e
           99.45
223
Emissions from purchased electricity (Scope 2, location based) tCO
2,333
2,259
Emissions from business travel in rental cars or employee owned vehicles where company is responsible for purchasing the fuel (Scope 3) tCO2e
            24.27
11
Total gross tCO2e based on above
6,046
5,852
Intensity ratio (kgtCO2e/Tonnes of production) 
264
199.88

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 ).

Page 6

 
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%).

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.

AUDITORS

The auditorsForvis 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.
 





Robert Grogan
Director

Date: 19 September 2024

Page 7

 
KEPAK KIRKHAM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEPAK KIRKHAM LIMITED
 

OPINION


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 policiesThe 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).


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 profit 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 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.


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.


Page 8

 
KEPAK KIRKHAM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEPAK KIRKHAM LIMITED (CONTINUED)


OTHER INFORMATION


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.


OPINION 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 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.


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.


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 either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 9

 
KEPAK KIRKHAM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEPAK KIRKHAM LIMITED (CONTINUED)


AUDITORS' 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 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.

Page 10

 
KEPAK KIRKHAM LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEPAK KIRKHAM LIMITED (CONTINUED)



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 2006Our 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.





Tommy Doherty (Senior Statutory Auditor)
for and on behalf of
Forvis Mazars
Chartered Accountants and Statutory Audit Firm

19 September 2024
Page 11

 
KEPAK KIRKHAM LIMITED
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
103,258,507
108,755,888

Cost of sales
  
(97,315,246)
(103,320,238)

GROSS PROFIT
  
5,943,261
5,435,650

Distribution costs
  
(378,754)
(373,827)

Administrative expenses
  
(2,314,253)
(1,665,514)

OPERATING PROFIT
 5 
3,250,254
3,396,309

Interest payable and similar expenses
 8 
(1,990)
(39,170)

PROFIT BEFORE TAX
  
3,248,264
3,357,139

Tax on profit
 9 
(230,000)
(1,547,492)

PROFIT FOR THE FINANCIAL YEAR
  
3,018,264
1,809,647

TOTAL COMPREHENSIVE INCOME FOR THE YEAR
  
3,018,264
1,809,647

The notes on pages 17 to 30 form part of these financial statements.

Page 12

 
KEPAK KIRKHAM LIMITED
REGISTERED NUMBER: 05101877

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

FIXED ASSETS
  

Tangible assets
 10 
10,169,157
7,331,095

  
10,169,157
7,331,095

CURRENT ASSETS
  

Stocks
 11 
13,895,591
17,247,363

Debtors: amounts falling due within one year
 12 
14,181,216
11,818,083

Cash at bank and in hand
 13 
468
468

  
28,077,275
29,065,914

Creditors: amounts falling due within one year
 14 
(15,693,513)
(17,092,354)

NET CURRENT ASSETS
  
 
 
12,383,762
 
 
11,973,560

TOTAL ASSETS LESS CURRENT LIABILITIES
  
22,552,919
19,304,655

PROVISIONS FOR LIABILITIES
  

Deferred tax
 16 
(1,835,000)
(1,605,000)

  
 
 
(1,835,000)
 
 
(1,605,000)

NET ASSETS
  
20,717,919
17,699,655


CAPITAL AND RESERVES
  

Called up share capital 
 17 
2
2

Profit and loss account
 18 
20,717,917
17,699,653

  
20,717,919
17,699,655


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Robert Grogan
Director

Date: 19 September 2024

The notes on pages 17 to 30 form part of these financial statements.

Page 13

 
KEPAK KIRKHAM LIMITED
 

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


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2022
2
15,890,006
15,890,008


COMPREHENSIVE INCOME FOR THE YEAR

Profit for the year
-
1,809,647
1,809,647


OTHER COMPREHENSIVE INCOME FOR THE YEAR
-
-
-


TOTAL COMPREHENSIVE INCOME FOR THE YEAR
-
1,809,647
1,809,647


TOTAL TRANSACTIONS WITH OWNERS
-
-
-


At 1 January 2023
2
17,699,653
17,699,655


COMPREHENSIVE INCOME FOR THE YEAR

Profit for the year
-
3,018,264
3,018,264


OTHER COMPREHENSIVE INCOME FOR THE YEAR
-
-
-


TOTAL COMPREHENSIVE INCOME FOR THE YEAR
-
3,018,264
3,018,264


TOTAL TRANSACTIONS WITH OWNERS
-
-
-


AT 31 DECEMBER 2023
2
20,717,917
20,717,919


The notes on pages 17 to 30 form part of these financial statements.

Page 14

 
KEPAK KIRKHAM LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

CASH FLOWS FROM OPERATING ACTIVITIES

Profit for the financial year
3,018,264
1,809,647

ADJUSTMENTS FOR:

Taxation charge
230,000
1,547,492

Gain on disposal of tangible assets
-
(8,000)

Interest paid
1,990
39,170

Depreciation of tangible assets
997,605
599,474

Decrease/(increase) in stocks
3,351,772
(5,022,524)

Decrease/(increase) in debtors
739,609
(1,322,161)

(Increase)/decrease in amounts owed by groups
(3,481,247)
4,741,833

(Decrease)/increase in creditors
(1,473,130)
369,279

(Decrease)/increase in amounts owed to groups
(59,808)
1,344,971

Corporation tax received/(paid)
378,505
(35,492)

NET CASH (USED IN) / GENERATED FROM OPERATING ACTIVITIES

3,703,560
4,063,689


CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

Purchase of tangible fixed assets
(3,835,667)
(4,023,965)

Sale of tangible fixed assets
-
8,000

NET CASH FROM INVESTING ACTIVITIES

(3,835,667)
(4,015,965)

CASH FLOWS FROM FINANCING ACTIVITIES

Interest paid
(1,990)
(39,170)

NET CASH USED IN FINANCING ACTIVITIES
(1,990)
(39,170)

(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
(134,097)
8,554

Cash and cash equivalents at beginning of year
(24,620)
(33,174)

CASH AND CASH EQUIVALENTS AT THE END OF YEAR
(158,717)
(24,620)


CASH AND CASH EQUIVALENTS AT THE END OF YEAR COMPRISE:

Cash at bank and in hand
468
468

Bank overdrafts
(159,185)
(25,088)

(158,717)
(24,620)


The notes on pages 17 to 30 form part of these financial statements.

Page 15

 
KEPAK KIRKHAM LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

468

-

468

Bank overdrafts

(25,088)

(134,097)

(159,185)



(24,620)
(134,097)
(158,717)

The notes on pages 17 to 30 form part of these financial statements.

Page 16

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


GENERAL INFORMATION

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

 
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 judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

REVENUE RECOGNITION

Revenue 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. Revenue 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

Revenue 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.

 
2.3

TANGIBLE FIXED ASSETS

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 17

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (CONTINUED)


2.3
TANGIBLE FIXED ASSETS (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:

Plant and machinery
-
3-10%

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.

 
2.4

STOCKS

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
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.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.5

DEBTORS

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.6

CASH AND CASH EQUIVALENTS

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

Page 18

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (CONTINUED)

 
2.7

FINANCIAL INSTRUMENTS

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Derivatives, including interest rate swaps and 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.

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.

 
2.8

CREDITORS

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.9

FOREIGN CURRENCY TRANSLATION

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 19

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (CONTINUED)

 
2.10

FINANCE COSTS

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.11

OPERATING LEASES: THE COMPANY AS LESSEE

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
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 profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.13

HOLIDAY PAY ACCRUAL

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the reporting date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the reporting date.

 
2.14

BORROWING COSTS

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.15

PROVISIONS FOR LIABILITIES

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
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.

Page 20

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (CONTINUED)

 
2.16

CURRENT AND DEFERRED TAXATION

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.


3.



JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Preparation of the financial statements requires management to make certain estimates and assumptions that affect the reported profits, assets and liabilities. Assumptions include, but are not limited to, the following areas:
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.

Page 21

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


TURNOVER

Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
89,236,054
95,832,949

Rest of Europe
14,022,453
12,922,939

103,258,507
108,755,888



5.


OPERATING PROFIT

The operating profit is stated after charging:

2023
2022
£
£

FX (gain) / loss
43,438
(44,954)

Other operating lease rentals
461,893
296,628


6.


AUDITORS' REMUNERATION

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


2023
2022
£
£

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements

15,750
14,001

Page 22

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


EMPLOYEES

Staff costs were as follows:


2023
2022
£
£

Wages and salaries
13,447,224
13,848,312

Social security costs
1,266,983
1,444,822

Cost of defined contribution scheme
385,483
413,746

15,099,690
15,706,880


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


        2023
        2022
            No.
            No.







Production
418
472



Administration
9
9

427
481

The Directors remuneration is nil for both the current and the prior year.


8.


INTEREST PAYABLE AND SIMILAR EXPENSES

2023
2022
£
£


Bank interest payable
-
37,972

Bank charges
1,990
1,198

1,990
39,170

Page 23

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


TAXATION


2023
2022
£
£

CORPORATION TAX


Adjustments in respect of previous periods
-
(57,508)


-
(57,508)


TOTAL CURRENT TAX
-
(57,508)

DEFERRED TAX


Origination and reversal of timing differences
230,000
1,605,000

TOTAL DEFERRED TAX
230,000
1,605,000


TAXATION ON PROFIT ON ORDINARY ACTIVITIES
230,000
1,547,492

FACTORS AFFECTING TAX CHARGE FOR THE YEAR

The tax assessed for the year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
3,248,264
3,357,139


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
763,342
637,856

EFFECTS OF:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
2,235
1,900

Capital allowances for year in excess of depreciation
(756,213)
(969,557)

Utilisation of tax losses
(400,547)
190,000

Adjustments to tax charge in respect of prior periods
-
(57,508)

Other timing differences leading to an increase (decrease) in taxation
230,000
1,605,000

Unrelieved tax losses carried forward
256,591
139,801

Group relief
134,592
-

TOTAL TAX CHARGE FOR THE YEAR
230,000
1,547,492

Page 24

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
9.TAXATION (CONTINUED)


FACTORS THAT MAY AFFECT FUTURE TAX CHARGES

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.


10.


TANGIBLE FIXED ASSETS





Plant and Machinery

£



COST OR VALUATION


At 1 January 2023
13,740,950


Additions
3,835,667



At 31 December 2023

17,576,617



DEPRECIATION


At 1 January 2023
6,409,855


Charge for the year on owned assets
997,605



At 31 December 2023

7,407,460



NET BOOK VALUE



At 31 December 2023
10,169,157



At 31 December 2022
7,331,095

Page 25

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


STOCKS

2023
2022
£
£

Meat
12,482,296
15,664,837

Consumables
1,413,295
1,582,526

13,895,591
17,247,363


The estimated replacement cost of stock is not materially different from the amounts stated above.


12.


DEBTORS

2023
2022
£
£


Trade debtors
53,029
14,995

Amounts owed by group undertakings
13,277,791
9,796,544

Other debtors and prepayments
326,331
948,507

VAT recoverable
524,065
1,058,037

14,181,216
11,818,083


All amounts fall due within one year.


13.


CASH AND CASH EQUIVALENTS

2023
2022
£
£

Cash at bank and in hand
468
468

Less: bank overdrafts
(159,185)
(25,088)

(158,717)
(24,620)


Page 26

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2023
2022
£
£

Bank overdrafts
159,185
25,088

Trade creditors
6,584,466
8,125,528

Amounts owed to group undertakings
6,819,368
6,879,176

Other taxation and social security
585,409
554,695

Other creditors and accruals
1,545,085
1,507,867

15,693,513
17,092,354


The repayment terms of trade creditors vary between on demand and sixty days. No interest is payable on trade creditors.
Tax and social insurance are subject to the terms of the relevant legislation. Interest accrues on late payment at the rate of 0.02% per day in Ireland and 3% per annum in the U.K. No interest was due at the financial year end date.
The terms of the accruals are based on the underlying contracts.
Other amounts included within creditors not covered by specific note disclosures are unsecured, interest free and repayable on demand.
The Company has granted fixed and floating charges on its assets to secure all the borrowings of the group from the banks providing facilities. All group borrowings are also secured by cross guarantees from group companies and the parent company. The group also has access to an overdraft facility which is secured on the third party debtors of the group.

2023
2022
£
£

OTHER TAXATION AND SOCIAL SECURITY

PAYE/NI control
585,409
554,695

585,409
554,695


Page 27

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


FINANCIAL INSTRUMENTS

2023
2022
£
£

FINANCIAL ASSETS


Financial assets measured at fair value through profit or loss
468
468

Financial assets that are debt instruments measured at amortised cost
13,351,053
10,075,443

13,351,521
10,075,911


FINANCIAL LIABILITIES


Financial liabilities measured at amortised cost
(15,108,104)
(16,537,659)


16.


DEFERRED TAXATION




2023


£






At beginning of year
(1,605,000)


Credited to the profit or loss
(230,000)



AT END OF YEAR
(1,835,000)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(2,110,000)
(1,605,000)

Tax losses carried forward
275,000
-

(1,835,000)
(1,605,000)

Page 28

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


SHARE CAPITAL

2023
2022
£
£
AUTHORISED



100,000 (2022 - 100,000) Ordinary shares of £1.00 each
100,000
100,000

ALLOTTED, CALLED UP AND FULLY PAID



2 (2022 - 2) Ordinary shares of £1.00 each
2
2



18.


RESERVES

Profit and loss account

The profit and loss account reserve represents cumulative gains and losses recognised in the Income Statement, net of transfers to/from other reserves. 


19.


PENSION COMMITMENTS

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.


20.


COMMITMENTS UNDER OPERATING LEASES

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

2023
2022
£
£


Not later than 1 year
220,636
275,563

Later than 1 year and not later than 5 years
117,635
175,016

338,271
450,579


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).

Page 29

 
KEPAK KIRKHAM LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


RELATED PARTY TRANSACTIONS

The Company has availed of the exemption under Section 33 of FRS 102 not to disclose transactions between wholly-owned group companies.
Purchases from companies not 100% owned within the group amounted to £3,556k (2022 - £970k). Balances owing to these companies at the year end amounted to £347k (2022 - £7k).
The Directors are considered to be the key management personnel of the Company. The Directors are not paid any remuneration by the Company.


23.


CONTROLLING PARTY

The Company's parent is Kepak Holdings; the ultimate holding company is Kingate Investments Unlimited, an unlimited company incorporated in the Isle of Man.


Page 30