ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2019
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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 2019
The Company is engaged in contract manufacturing. The Company's turnover was £85,224,190 (2018 - £82,897,374). Net assets at 31 December 2019 amounted to £10,484,041 (2018 - £7,819,394).
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 BSE. 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. Finanical 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 2019 vs. 2018 2.8% 2018 vs. 2017 7.2% 2017 vs. 2016 15.2% Movement in Operating Profit 2019 vs. 2018 (1.4%) 2018 vs. 2017 7.2% 2017 vs. 2016 56.0%
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KEPAK KIRKHAM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
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 on 19 May 2020 and signed on its behalf.
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KEPAK KIRKHAM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
The Directors present their report and the financial statements for the year ended 31 December 2019.
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 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 £2,664,647 (2018 -£2,572,198).
No dividends (2018 - 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 2019
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 that 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 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 the Company which allows for a joint beneficial relationship with increased business and a common trust on the level of service provided. 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.
Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
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KEPAK KIRKHAM LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
At the time of approving these financial statements, the United Kingdom is responding to the outbreak of the coronavirus, COVID-19. The Company is part of the Kepak Group which will continue to support and finance it through this crisis. The group enjoy the full support of their banks and have adequate facilities available. The Company has continued to operate during this crisis, albeit at reduced capacity. The Directors have therefore carefully considered the impact of COVID-19 on the projected performance of the Company for 2020 and expect that management can meet the risks presented by this; accordingly no revision of the figures included in the financial statements for the year ended 31 December 2019 has been made. There have been no other events since the balance sheet date which necessitate revision of the figures included in the financial statements or inclusion of a note thereto.
The auditors, Mazars, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 19 May 2020 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 2019, 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).
In our opinion the financial statements:
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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the Directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the Directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The Directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such
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KEPAK KIRKHAM LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEPAK KIRKHAM LIMITED (CONTINUED)
material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
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:
As explained more fully in the Directors' Responsibilities Statement 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.
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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.
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.
This report is made solely to the Company's members 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 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
19 May 2020
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KEPAK KIRKHAM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
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KEPAK KIRKHAM LIMITED
REGISTERED NUMBER: 5101877
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 19 May 2020.
The notes on pages 15 to 28 form part of these financial statements.
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KEPAK KIRKHAM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
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KEPAK KIRKHAM LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
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KEPAK KIRKHAM LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2019
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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 5101877. 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:
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:
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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.
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 outbasis. Work in progress and finished goods include labour and attributable overheads.
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.
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.
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.
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.ACCOUNTING POLICIES (CONTINUED)
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.
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.
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'.
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.ACCOUNTING POLICIES (CONTINUED)
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.
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
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.
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Statement of Financial Position date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Statement of Financial Position date.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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 Statement of Financial Position 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 2019
2.ACCOUNTING POLICIES (CONTINUED)
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
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.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
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.
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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 2019
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
9.TAXATION (CONTINUED)
Reductions in the UK corporation tax rate to 19% (effective from 1 April 2017) and to 18% (effective from
1 April 2020) were enacted on 26 October 2015. The Finance Bill 2016 further reduced the 18% rate to 17% from 1 April 2020, following substantial enactment on 6 September 2016. Together this will reduce the Company's future tax charges accordingly.
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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 £314,854 (2018 - £204,236). Contributions totalling £34,852 (2018 - £28,730) were payable to the fund at the balance sheet date and are included in creditors.
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KEPAK KIRKHAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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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