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The Valley Printing Company Limited

Registered number: 00098663
Directors' report and
 unaudited financial statements
For the year ended 31 December 2022

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
COMPANY INFORMATION


Directors
John S Haggas 
James S Haggas 
Jonathan S Haggas 




Company secretary
Jonathan S Haggas



Registered number
00098663



Registered office
Harden Beck Mill
Harden

Bingley

West Yorkshire

BD16 1BL




Accountants
Mazars LLP
Chartered Accountants

5th Floor

3 Wellington Place

Leeds

LS1 4AP





 
THE VALLEY PRINTING COMPANY LIMITED
 

CONTENTS



Page
Directors' Report
 
1 - 4
Accountants' Report
 
5
Statement of Comprehensive Income
 
6
Statement of Financial Position
 
7
Statement of Changes in Equity
 
8
Notes to the Financial Statements
 
9 - 22


 
THE VALLEY PRINTING COMPANY LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors present their report and the financial statements for the year ended 31 December 2022.

Directors' responsibilities statement

The directors are responsible for preparing 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; and

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.

Business review

The year to December 2022, saw the Company perform at its best level in history and the ability of the business to adapt to the post COVID world of retail was unprecedented. In the first full year since the completion of our non-compete clause after the selling of the business to the Outform Group in May 2020, the Company was able to ramp up the permanent POS and retail furniture area of the business with several new clients able to fully come on board and trade with us in the financial year.
As a result, the business has seen growth and has had to invest in new space to accommodate additional stock and production space. The Company envisages and is experiencing a similar start to work in 2023.
The core print business also increased in size and saw significant growth in the full service provision of corrugated merchandisers that are pre-filled in house and saw approval from several new clients to house and fulfil their stock within our Keighley facility.
The Keighley warehouse has doubled in size over the year and we have shown commitment for a 3 year period on the additional stock and warehousing space. Staff levels have remained similar within the Harden operation, but Keighley has taken on 5 permanent staff and has increased the number of temporary workers.
Whilst the business has not made any significant capital investments, it is widely anticipated that there will be commitments to new printing technology (circa 750k) within the next financial year.
 
- 1 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Financial
The Valley Printing Company delivered a profit before tax of £1,612k. Trading conditions continue to be difficult within the core print sector, but the business continued to develop its strengths and turnover increased to £14.7m, an increase of 32% from the year before, mainly due to 2 large contracts in the permanent POS sector.
The Company’s Statement of Financial Position is exceptionally strong and the business is in a very healthy position and will be able to invest in new capital in the next year.
The business has decided to award a 100% dividend to share holders as an appreciation of their continued support this year.

Principal risks and uncertainties

Operational and Commercial Risk:
2022 was an extremely volatile year with regards to both the supply and cost of raw materials. Continuing from our report last year, the year saw several rises in prices, primarily due to scarcity of supply, initially stemming from the war in Ukraine. As the year came to a close, we were able to see a gradual slowing in the core indicators and as 2023 has progressed we can see some areas starting to reduce prices.
The volatility of the labour market was also a major concern in 2022. The ability to hire and maintain staff levels has been extremely difficult given our location and the loss of EU workers post Brexit. All staff were given inflation-busting pay rises to maintain levels, but the additional hike in minimum wage thresholds from the government have made these increases less attractive than originally planned. We intend to keep pace with inflation at the very least to incentivize staff to stay.
The increases in costs shown above have inevitably led to reduced margins on core work as the market we serve find it increasingly difficult to accept cost increases from us. Despite this, we have maintained margin by improving internal processes and sourcing better from new supply lines.
As Brexit is further cemented into the day to day running of the business, we have sought to allay risk by starting the process of setting up European VAT numbers in France, the Netherlands and Ireland so that we are able to ship goods in a smoother manner across Europe.
Liquidity Risk:
With its strong balance sheet and cash reserves, the Company is in a strong position and more reliance on the domestic market has made us less susceptible to currency risk. 
Systems Risk:
The Company is heavily reliant on IT and manages risk through the employment of specialist external partners, along with a rigorous on and off-site backup policy which is the key part of the Company's Disaster Recovery Planning. During 2019, the business invested in new servers and backup technology and our involvement with key technology clients has ensured that our systems have been reviewed in full and are robust.

- 2 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Key performance indicators

The Directors consider the financial KPIs of the business to be:-
Turnover and future orderbook
Gross margin and project profitability
Net profit
Cash on hand
These are monitored in our monthly management reports
The Company monitors staff turnover on a quarterly basis and measures employee satisfaction in the workplace and our thanks as a Board go to the continued commitment of our staff without whom we would be nothing.

Results and dividends

The profit for the year, after taxation, amounted to £1,302k (2021: £542k).

Dividends were declared during the year of £99k (2021: £99k).
Going concern
These financial statements have been prepared on a going concern basis. The directors, having considered the financial position of the Company for a period of at least twelve months from the date of signing these financial statements, have no reason to believe that a material uncertainty exists that may cast doubt about the ability of the Company to continue as a going concern. Accordingly the directors have a reasonable expectation that the Company will continue in operational existence and thus they adopt the going concern basis of accounting in preparing the financial statements.

Directors

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

John S Haggas 
James S Haggas 
Jonathan S Haggas 

Economic impact of global events

UK businesses are currently facing many uncertainties such as the consequences of Brexit, Covid 19, environmental sustainability and geopolitical events such as the Russian invasion of Ukraine. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working. 
 
The Directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that these are non-adjusting events with the greatest impact on the business expected to be from the economic ripple effect on the global economy. The Directors have taken account of these potential impacts in their going concern assessment.
 
The Valley Printing Company Limited continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.

- 3 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Small companies note

In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

This report was approved by the board on 29 September 2023 and signed on its behalf.
 





Jonathan S Haggas
Director

- 4 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
  
CHARTERED ACCOUNTANTS' REPORT TO THE BOARD OF DIRECTORS ON THE PREPARATION OF THE UNAUDITED STATUTORY FINANCIAL STATEMENTS OF THE VALLEY PRINTING COMPANY LIMITED FOR THE YEAR ENDED 31 DECEMBER 2022

In accordance with our engagement letter and in order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of the Company for the year ended 31 December 2022 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes from the Company's accounting records and from information and explanations you have given to us.
 

As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW)we are subject to its ethical and other professional requirements which are detailed at www.icaew.com/en/members/regulations-standards-and-guidance/.


Respective responsibilities of directors and accountants

You have acknowledged on the balance sheet for the year ended 31 December 2022  your duty to ensure that the Company has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the Company's assets, liabilities, financial position and profit. You consider that the Company is exempt from the statutory requirement for an audit for the year.
 

This report is made solely to the Board of Directors of The Valley Printing Company Limited, as a body, in accordance with the terms of our engagement letter. Our work has been undertaken solely to prepare for your approval the financial statements of the Company and state those matters that we have agreed to state to the Board of Directors, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept nor assume responsibility to anyone other than the Company and its Board of Directors, as a body, for our work or for this report.
 
We have not been instructed to carry out an audit or review of the financial statements of The Valley Printing Company Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the financial statements.





Mazars LLP
 
Chartered Accountants
  
5th Floor
3 Wellington Place
Leeds
LS1 4AP

29 September 2023
- 5 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
£000
£000


Turnover
14,669
9,957

Cost of sales
(10,583)
(7,071)

Gross profit
4,086
2,886

Distribution costs
(919)
(940)

Administrative expenses
(1,645)
(1,434)

Other operating income
28
30

Operating profit
1,550
542

Interest receivable and similar income
62
-

Profit before taxation
1,612
542

Tax on profit
(310)
-

Profit for the financial year
1,302
542

There were no recognised gains and losses for 2022 or 2021 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2022 (2021: £NIL).

The notes on pages 9 to 22 form part of these financial statements.

- 6 -

 
THE VALLEY PRINTING COMPANY LIMITED
REGISTERED NUMBER: 00098663

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

2022
2021
Note
£000
£000

Fixed assets
  

Tangible assets
 6 
550
570

  
550
570

Current assets
  

Stocks
 7 
337
218

Debtors: amounts falling due within one year
 8 
4,641
3,076

Cash at bank and in hand
 9 
7,841
6,380

  
12,819
9,674

Creditors: amounts falling due within one year
 10 
(3,994)
(2,322)

Net current assets
  
 
 
8,825
 
 
7,352

Total assets less current liabilities
  
9,375
7,922

Provisions for liabilities
  

Other provisions
 12 
(250)
-

  
 
 
(250)
 
 
-

Net assets
  
9,125
7,922


Capital and reserves
  

Called up share capital 
 13 
99
99

Profit and loss account
 14 
9,026
7,823

  
9,125
7,922


The directors consider that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 September 2023.

Jonathan S Haggas
Director

The notes on pages 9 to 22 form part of these financial statements.

- 7 -

 
THE VALLEY PRINTING COMPANY LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Profit and loss account
Total equity

£000
£000
£000


At 1 January 2021
99
7,380
7,479


Comprehensive income for the year

Profit for the year
-
542
542
Total comprehensive income for the year
-
542
542


Contributions by and distributions to owners

Dividends: Equity capital
-
(99)
(99)


Total transactions with owners
-
(99)
(99)



At 1 January 2022
99
7,823
7,922


Comprehensive income for the year

Profit for the year
-
1,302
1,302
Total comprehensive income for the year
-
1,302
1,302


Contributions by and distributions to owners

Dividends: Equity capital
-
(99)
(99)


Total transactions with owners
-
(99)
(99)


At 31 December 2022
99
9,026
9,125


The notes on pages 9 to 22 form part of these financial statements.

- 8 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

The Valley Printing Company Limited (“the Company”) is a private limited company incorporated in the United Kingdom, registered number 00098663.
The address of its registered office and principal place of business is Harden Beck Mill, Harden, Bingley, West Yorkshire BD16 1BL. 
The principal activity of the Company is that of a specialist printer, design and point of sale producer.

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 Section 1A of 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

Going concern

These financial statements have been prepared on a going concern basis. The directors, having considered the financial position of the Company for a period of at least twelve months from the date of signing these financial statements, have no reason to believe that a material uncertainty exists that may cast doubt about the ability of the Company to continue as a going concern. Accordingly the directors have a reasonable expectation that the Company will continue in operational existence and thus they adopt the going concern basis of accounting in preparing the financial statements.

- 9 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Revenue

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.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

- 10 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.4

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.

Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method and reducing balance method.

Depreciation is provided on the following basis:

Freehold property
-
2% straight line
Plant & machinery
-
25% straight line
Motor vehicles
-
25% reducing balance
Fixtures, fittings and equipment
-
25% straight line

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.

 
2.5

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.6

Valuation of investments

Unlisted investments and other fixed asset investments are measured at cost less accumulated impairment.

- 11 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.7

Stocks and work in progress

Stocks and work in progress 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.
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 the Statement of Comprehensive Income.

 
2.8

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.

 
2.9

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.

 
2.10

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 and loans to related parties.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the
- 12 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.10
Financial instruments (continued)

difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

 
2.11

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.

 
2.12

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.

 
2.13

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP, rounded to the nearest £1.

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'.

- 13 -

 
THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.14

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

 
2.15

Operating leases

Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive Income on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.16

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.

 
2.17

Interest income

Interest income is recognised in profit or loss using the effective interest method.

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THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.18

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.

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THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Critical judgments in applying the Company’s accounting policies 
The critical judgments that the directors have made in the process of applying the Company’s accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
(i) Assessing indicators of impairment 
In assessing whether there have been any indicators of impairment assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability and where applicable, the ability of the asset to be operated as planned. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty 
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(ii) Estimating value in use
Where an indication of impairment exists, the directors have carried out an impairment review to determine the recoverable amount of the asset, which is the higher of fair value less cost to sell and value in use. The value in use calculation has required the directors to estimate the future cash flows expected to arise from the asset or the cash generating unit and determine a suitable discount rate in order to calculate present value.
(iii) Recoverability of receivables
The Company establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the directors have considered factors such as the aging of the receivables, past experience of recoverability, and the credit profile of individual or groups of customers.   
(iv) Determining residual values and useful economic lives of tangible assets
The Company depreciates tangible assets, over their estimated useful lives. The estimation of the useful lives of tangible assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.
Judgment is also applied, when determining the residual values for fixed assets. When determining the residual value, the directors have assessed the amount that the Company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful life. Where possible this is done with reference to external market prices. 
v) Determining the value of provisions
Provisions are determined on the basis of estimated potential costs incurred that are probable. Warranty provisions are calculated on a % on the revenue contract for which returns may be made. Potential legal costs are assessed by the directors on an ongoing basis. 

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THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

4.


Employees

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


        2022
        2021
            No.
            No.







Production staff
22
22



Administration staff
14
14

36
36


5.


Taxation


2022
2021
£000
£000

Corporation tax


Current tax on profits for the year
328
-

Adjustments in respect of previous periods
2
-


330
-


Total current tax
330
-

Deferred tax


Origination and reversal of timing differences
(18)
-

Adjustments in respect of prior periods
(2)
-

Total deferred tax
(20)
-


Taxation on profit on ordinary activities
310
-
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THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
5.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2021 - higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

2022
2021
£000
£000


Profit on ordinary activities before tax
1,612
542


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
306
103

Effects of:


Expenses not deductible for tax purposes
49
15

Fixed asset differences
14
-

Adjustments to tax charge in respect of prior periods
2
-

Adjustments to tax charge in respect of prior periods - deferred tax
(2)
-

Remeasurement of deferred tax for
changes in tax rates
15
(18)

Movement in deferred tax not recognised
(74)
(100)

Total tax charge for the year
310
-


Factors that may affect future tax charges

The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom will increase from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.

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THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

6.


Tangible fixed assets





Freehold property
Plant & machinery
Motor vehicles
Fixtures & fittings
Total

£000
£000
£000
£000
£000



Cost


At 1 January 2022
525
1,431
102
601
2,659


Additions
-
-
76
29
105


Disposals
-
-
(72)
(35)
(107)



At 31 December 2022

525
1,431
106
595
2,657



Depreciation


At 1 January 2022
58
1,414
53
564
2,089


Charge for the year
11
8
25
54
98


Disposals
-
-
(45)
(35)
(80)



At 31 December 2022

69
1,422
33
583
2,107



Net book value



At 31 December 2022
456
9
73
12
550



At 31 December 2021
467
18
49
37
571


7.


Stocks

2022
2021
£000
£000

Raw materials and consumables
40
46

Work in progress (goods to be sold)
297
172

337
218


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THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

8.


Debtors

2022
2021
£000
£000


Trade debtors
4,454
2,781

Other debtors
48
166

Prepayments and accrued income
119
129

Deferred taxation
20
-

4,641
3,076



9.


Cash and cash equivalents

2022
2021
£000
£000

Cash at bank and in hand
7,841
6,380



10.


Creditors: Amounts falling due within one year

2022
2021
£000
£000

Trade creditors
1,511
1,434

Corporation tax
326
-

Other taxation and social security
189
75

Other creditors
107
119

Accruals and deferred income
1,861
694

3,994
2,322



11.


Deferred taxation




2022


£000






Charged to profit or loss
20



At end of year
20

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THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
11.Deferred taxation (continued)

The deferred tax asset is made up as follows:

2022
2021
£000
£000


Fixed asset timing differences
20
-

20
-


12.


Provisions




Other provision

£000





Charged to profit or loss
250



At 31 December 2022
250

Other provisions relate to warranty provisions and potential legal costs. 


13.


Share capital

2022
2021
£000
£000
Allotted, called up and fully paid



99,396 (2021 - 99,396) Ordinary shares of £1.00 each
99
99

Ordinary shares carry equal voting, dividend and distribution rights.



14.


Reserves

Profit & loss account

The profit and loss account represents accumulated profits and losses from the current and prior years less any dividends declared.


15.


Pension commitments

The group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to £116k (2021: £105k). Contributions totalling £Nil (2021: £1k) were payable into the fund at the balance sheet date.

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THE VALLEY PRINTING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

16.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£000
£000


Not later than 1 year
77
79

Later than 1 year and not later than 5 years
137
221

214
300


17.


Related party transactions

During the year, key management personnel received remuneration of £704k (2021: £597k). Key management personnel are deemed to be the directors of the company.
At the year end, a balance of £61,874 (2021: £57,136) was due to directors. 


18.


Controlling party

The directors do not believe that there is an ultimate controlling party, since no shareholder has a majority shareholding. 

 
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