Company registration number 04394106 (England and Wales)
VALLI FORECOURTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
VALLI FORECOURTS LIMITED
COMPANY INFORMATION
Directors
Mr F D M Valli
Mr H D M Valli
Mr Y D M Valli
Secretary
Mr S Valli
Company number
04394106
Registered office
44 Warren Street
Savile Town
Dewsbury
West Yorkshire
UK
WF12 9LX
Auditor
DKR Audit Services Ltd
36 Lichfield Street
Walsall
West Midlands
UK
WS1 1TJ
Business address
44 Warren Street
Savile Town
Dewsbury
West Yorkshire
UK
WF12 9LX
VALLI FORECOURTS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 26
VALLI FORECOURTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Review of the business
The Company's principal activity continued to be that of operating retail petrol stations with convenience stores including subway outlets and valeting.
As part of the company's growth strategy the company acquired investment properties during the year, it has also identified a number of potential locations for development which subject to planning it seeks to purchase in the near future.
Principal risks and uncertainties
The directors of the business recognise that the commercial environment is expected to be challenging, with profitability being affected by the impact on global oil markets as a result of events around the world, competition from the hypermarkets and major dealers, the drive towards alternative fuel and electric vehicles.
The company is exposed to the usual commercial and supply chain risk associated with its operations. The company has policies in place to manage these risk as follows:
Price risk
The company is exposed to inflation risk impacting on product offerings as a result of increased prices. The company actively invests in technology and purchasing process to make economies and retain price competitiveness and quality product offerings against other retailers.
Supply chain risk
The company has exclusive agreements in place to protect future supplies.
Liquidity risk
The company has no current borrowings from the bank and therefore its not exposed to the liquidity risk of any financial instruments. The company has considerable financial resources and cash headroom and as a consequence the directors believe that the company is well placed to manage its business risks despite the current uncertain economic outlook.
Credit risk
The company’s credit risk arises primarily through trade debtors. The amounts presented in the balance sheet are net of bad debts provisions. Credit risk is managed due to the nature of the industry to a number of providers of e.g debit/credit card, fuel cards etc who adhere to payment terms.
Environmental risk
The products stored and sold can be seen as harmful to the environment, the company has invested and upgraded majority of the fuel storage tanks and it has monitoring systems in place to minimise the risk of fuel products leaking into the environment.
Development and performance
The directors expect the company to grow despite difficult market conditions and economic uncertainty. Continued review of costs is an important factor in maintaining profitability of the company and ensuring that it operates efficiently and effectively. The aim is for the company to take advantage of any opportunities that may arise in the future through acquisitions to support its growth strategy.
VALLI FORECOURTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Key performance indicators
2023 2022
Turnover £146,075,556 £119,523,961
Gross profit £ 21,993,815 £ 18,385,625
Operating profits £ 13,641,185 £ 10,783,693
Shareholders funds £ 46,557,252 £ 35,593,532
Employees 307 286
The directors also monitor the fuel volumes which is seen as a key performance indicator.
Turnover increased by £26,551,595, a significant increase was as a result of higher fuel prices due to increase in oil prices. Fuel volume increased by 4% and shop sales by 5%.
Gross profit was up by £3,548,190, as a result of increase in fuel volume, shop sales together with a good margin on fuel.
Operating costs increased compared to previous year, with the largest increase in wage cost due to an increase in employee numbers and wage rate increases. Substantial increase in rates following the withdrawal of the rates relief was also a major factor in higher operating costs.
Promoting the success of the company
Section 172 - Fulfilling our Duties
The directors have acted in the way they consider, in good faith, promotes the success of the company for the benefit of its members as a whole, and in doing so have given regard to (amongst other matters):-
Risk Management and Decision Making
The company has consideration for all key categories of risk, as detailed below, when deciding on its strategies regarding decision making for the long term. The company ensure that appropriate representations across all stakeholders is maintained to ensure they are included in the company's overall decision-making process.
Our people
The company is committed to being a responsible employer and to creating a positive working environment where employees are continually motivated, developed and operate as efficiently as possible. The company's policy is to consult and discuss with employees as noted in the Director's report.
Business Conduct and Relationships
The company is committed to ensuring it operates within a stong corporate culture with due regard to all of its stakeholders and is underpinned by its values and vision. Having traded over 20 years, the need to build strong long-standing relationships with both our customers and suppliers is paramount to the success of the company. We continually develop strategies to maintain and grow the business and further improve relationships with all stakeholders.
VALLI FORECOURTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
Community and environment
The company recognises its responsibilities regarding the impact of its operations on the community and environment. Opportunities to reduce our environmental impact are continuously being reviewed and acted upon. We focus on our energy consumption, waste and use of sustainable material.
Shareholders
Management is committed and openly engaged with our shareholders ensuring companies objectives are communicated in a timely manner. The shareholders and their representatives are actively engaged in understanding our strategy, culture, people and the performance of our shared objectives for the short, medium and longer term.
Political donations
The company does not make any donations to any political party or organisation.
Mr F D M Valli
Director
14 March 2024
VALLI FORECOURTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of operating retail petrol stations with convenience stores including subway outlets and valeting.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £38,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr F D M Valli
Mr H D M Valli
Mr Y D M Valli
Disabled persons
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 within the company continues and that the 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 to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
Auditor
In accordance with the company's articles, a resolution proposing that DKR Audit Services Ltd be reappointed as auditor of the company will be put at a General Meeting.
Energy and carbon report
Valli Forecourts are committed to lowering our carbon footprint and our aim is to attain the highest compliance within our business and to ensure our activities minimise our effect on the environment where possible.
2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
3,319,925
-
VALLI FORECOURTS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 5 -
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
-
-
- Fuel consumed for owned transport
-
-
-
-
Scope 2 - indirect emissions
- Electricity purchased
39,844.94
-
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
-
-
Total gross emissions
39,844.94
-
Intensity ratio
Tonnes CO2e per employee
130
Quantification and reporting methodology
We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee, the recommended ratio for the sector.
Measures taken to improve energy efficiency
We actively seek to reduce use through continuous investment in more efficient equipment and processes and we will continue to strive to improve where technology or our statutory obligations require it. We have installed solar panels across sites and increased video conferencing technology for staff meetings, to reduce the need for travel between sites.
VALLI FORECOURTS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 6 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr F D M Valli
Director
14 March 2024
VALLI FORECOURTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VALLI FORECOURTS LIMITED
- 7 -
Opinion
We have audited the financial statements of Valli Forecourts Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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:
give a true and fair view of the state of the company's affairs as at 31 March 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
VALLI FORECOURTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VALLI FORECOURTS LIMITED
- 8 -
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 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, 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Irregularities, including fraud, are 'instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
Based on our understanding of ·the company and its industry, we considered that non-compliance with the
following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified !laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
VALLI FORECOURTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VALLI FORECOURTS LIMITED
- 9 -
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as: tax legislation, pension legislation, the Companies Act 2006.
In addition, we evaluated the directors' and management's incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition, which we pinpointed the cut-off assertion and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and .
Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Babar Mahmood BA (Hons) ACA
Senior Statutory Auditor
For and on behalf of DKR Audit Services Ltd
14 March 2024
Chartered Accountants
Statutory Auditor
36 Lichfield Street
Walsall
West Midlands
UK
WS1 1TJ
VALLI FORECOURTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
146,075,556
119,523,961
Cost of sales
(124,081,741)
(101,138,336)
Gross profit
21,993,815
18,385,625
Administrative expenses
(9,408,862)
(8,024,085)
Other operating income
1,056,232
422,153
Operating profit
4
13,641,185
10,783,693
Interest receivable and similar income
8
19,807
451
Profit before taxation
13,660,992
10,784,144
Tax on profit
9
(2,659,272)
(2,224,484)
Profit for the financial year
11,001,720
8,559,660
The profit and loss account has been prepared on the basis that all operations are continuing operations.
VALLI FORECOURTS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
850
1,700
Tangible assets
12
22,603,198
22,496,852
Investment property
13
14,450,435
8,922,429
37,054,483
31,420,981
Current assets
Stocks
15
3,533,707
3,693,772
Debtors
16
1,074,780
1,146,103
Cash at bank and in hand
17,542,545
11,487,956
22,151,032
16,327,831
Creditors: amounts falling due within one year
17
(11,831,128)
(11,258,526)
Net current assets
10,319,904
5,069,305
Total assets less current liabilities
47,374,387
36,490,286
Provisions for liabilities
Deferred tax liability
19
817,135
896,754
(817,135)
(896,754)
Net assets
46,557,252
35,593,532
Capital and reserves
Called up share capital
21
100
100
Profit and loss reserves
46,557,152
35,593,432
Total equity
46,557,252
35,593,532
The financial statements were approved by the board of directors and authorised for issue on 14 March 2024 and are signed on its behalf by:
Mr F D M Valli
Director
Company registration number 04394106 (England and Wales)
VALLI FORECOURTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2021
100
27,033,772
27,033,872
Year ended 31 March 2022:
Profit and total comprehensive income
-
8,559,660
8,559,660
Balance at 31 March 2022
100
35,593,432
35,593,532
Year ended 31 March 2023:
Profit and total comprehensive income
-
11,001,720
11,001,720
Dividends
10
-
(38,000)
(38,000)
Balance at 31 March 2023
100
46,557,152
46,557,252
VALLI FORECOURTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
15,607,506
12,161,868
Income taxes paid
(2,704,700)
(1,075,450)
Net cash inflow from operating activities
12,902,806
11,086,418
Investing activities
Purchase of tangible fixed assets
(1,304,821)
(5,943,684)
Proceeds from disposal of tangible fixed assets
2,803
Purchase of investment property
(5,528,006)
(8,922,429)
Interest received
19,807
451
Net cash used in investing activities
(6,810,217)
(14,865,662)
Financing activities
Dividends paid
(38,000)
Net cash used in financing activities
(38,000)
-
Net increase/(decrease) in cash and cash equivalents
6,054,589
(3,779,244)
Cash and cash equivalents at beginning of year
11,487,956
15,267,200
Cash and cash equivalents at end of year
17,542,545
11,487,956
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 14 -
1
Accounting policies
Company information
Valli Forecourts Limited is a private company limited by shares incorporated in England and Wales. The registered office is 44 Warren Street, Savile Town, Dewsbury, West Yorkshire, UK, WF12 9LX.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Franchise costs
Over 5 years
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
Over 50 years
Leasehold land and buildings
Over 50 years
Fixtures and fittings
25% reducing balance method
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 17 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
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 finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 18 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.16
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
146,075,556
119,523,961
2023
2022
£
£
Turnover analysed by geographical market
United kingdom
146,075,556
119,523,961
2023
2022
£
£
Other revenue
Interest income
19,807
451
Grants received
-
(21,133)
Rental Income
792,912
238,132
Commission and other operating income
263,320
205,154
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Government grants
-
21,133
Depreciation of owned tangible fixed assets
1,195,672
1,329,722
Amortisation of intangible assets
850
1,700
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
13,200
9,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
24
20
Sales
283
266
Total
307
286
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
6
Employees
(Continued)
- 20 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,735,630
4,000,776
Social security costs
289,948
223,189
Pension costs
44,467
38,457
5,070,045
4,262,422
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
8,628
8,628
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
19,807
451
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
19,807
451
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
2,747,614
1,690,354
Adjustments in respect of prior periods
(8,723)
Total current tax
2,738,891
1,690,354
Deferred tax
Origination and reversal of timing differences
(79,619)
534,130
Total tax charge
2,659,272
2,224,484
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
9
Taxation
(Continued)
- 21 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
13,660,992
10,784,144
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
2,595,588
2,048,987
Tax effect of expenses that are not deductible in determining taxable profit
11,216
2,441
Permanent capital allowances in excess of depreciation
61,191
173,056
Under/(over) provided in prior years
(8,723)
Taxation charge for the year
2,659,272
2,224,484
10
Dividends
2023
2022
£
£
Interim paid
38,000
11
Intangible fixed assets
Franchise costs
£
Cost
At 1 April 2022 and 31 March 2023
301,100
Amortisation and impairment
At 1 April 2022
299,400
Amortisation charged for the year
850
At 31 March 2023
300,250
Carrying amount
At 31 March 2023
850
At 31 March 2022
1,700
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
12
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 April 2022
22,484,579
2,155,664
8,915,838
33,556,081
Additions
1,087,935
216,886
1,304,821
Disposals
(2,860)
(2,860)
At 31 March 2023
23,569,654
2,155,664
9,132,724
34,858,042
Depreciation and impairment
At 1 April 2022
4,007,121
655,929
6,396,179
11,059,229
Depreciation charged in the year
468,423
43,113
684,136
1,195,672
Eliminated in respect of disposals
(57)
(57)
At 31 March 2023
4,475,487
699,042
7,080,315
12,254,844
Carrying amount
At 31 March 2023
19,094,167
1,456,622
2,052,409
22,603,198
At 31 March 2022
18,477,458
1,499,735
2,519,659
22,496,852
13
Investment property
2023
£
Fair value
At 1 April 2022
8,922,429
Additions through external acquisition
5,528,006
At 31 March 2023
14,450,435
Investment property comprises of a number of petrol service stations acquired. The fair value of the investment property has been arrived at on the basis of the value of the petrol service stations acquired during the year and in 2022. No valuation has been carried out by Chartered Surveyors for investment properties acquired in 2022. In the opinion of the directors the value of the investment property stated in the accounts reflects the open market value basis by reference to market evidence of transaction prices for similar properties.
14
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
785,758
905,858
Carrying amount of financial liabilities
Measured at amortised cost
9,686,124
9,247,638
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
15
Stocks
2023
2022
£
£
Finished goods and goods for resale
3,533,707
3,693,772
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
719,065
687,784
Other debtors
66,693
218,074
Prepayments and accrued income
289,022
240,245
1,074,780
1,146,103
17
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Other borrowings
18
523,000
523,000
Trade creditors
6,054,427
5,002,439
Corporation tax
1,236,216
1,202,025
Other taxation and social security
908,788
808,863
Other creditors
2,745,196
3,317,431
Accruals and deferred income
363,501
404,768
11,831,128
11,258,526
£4,259,173 (2022: £3,630,902) of trade creditors owed to BP Oil UK Limited and Shell UK Oil Products Ltd is secured by a fixed and floating charge over certain freehold sites of the company.
18
Loans and overdrafts
2023
2022
£
£
Preference shares
523,000
523,000
Payable within one year
523,000
523,000
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
817,135
896,754
2023
Movements in the year:
£
Liability at 1 April 2022
896,754
Credit to profit or loss
(79,619)
Liability at 31 March 2023
817,135
The deferred tax liability set out above is expected to reverse and relates to accelerated capital allowances that are expected to mature within the same period.
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
44,467
38,457
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Preference shares of £1 each
523,000
523,000
523,000
523,000
Preference shares classified as liabilities
523,000
523,000
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
21
Share capital
(Continued)
- 25 -
The ordinary shares have full voting, dividend and capital distribution rights (including on winding up) and are not redeemable.
The preference shares have no voting or dividend rights and are redeemable only on the winding up of the company or at the option of the shareholders or the company. None of these shares are redeemable within twelve months of the balance sheet date.
22
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Management charges
2023
2022
£
£
Common interest LLP
240,209
258,142
2023
2022
Amounts due to related parties
£
£
Common interest company
30,175
493,192
Common interest LLP
1,126,073
1,111,282
The related party transactions represents a loan to the common interest company and LLP that is related to Valli Forecourts Limited by virtue of common directors and shareholders. The loans are unsecured, non-interest bearing with no fixed repayment terms and repayable on demand.
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Common interest company
-
153,681
Other information
During the year, family members of the directors were paid wages and salaries of £8,981 (2022: £10,375).
23
Directors' transactions
Dividends totalling £38,000 (2022 - £0) were paid in the year in respect of shares held by the company's directors.
Included within other creditors less than one year are loans due to the directors and shareholders of £1,154,844 (2022: £1,393,515), These loans are are unsecured, non interest bearing with no fixed repayments dates and are repayable aon demand.
VALLI FORECOURTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 26 -
24
Ultimate controlling party
The company is under the control of the directors Mr H Valli, Mr F Valli, and Mr Yunus Valli who together with other family members own 100% of the issued share capital of Valli Forecourts Limited.
25
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
11,001,720
8,559,660
Adjustments for:
Taxation charged
2,659,272
2,224,484
Investment income
(19,807)
(451)
Amortisation and impairment of intangible assets
850
1,700
Depreciation and impairment of tangible fixed assets
1,195,672
1,329,722
Movements in working capital:
Decrease/(increase) in stocks
160,065
(1,483,679)
Decrease in debtors
71,323
224,943
Increase in creditors
538,411
1,305,489
Cash generated from operations
15,607,506
12,161,868
26
Analysis of changes in net funds
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
11,487,956
6,054,589
17,542,545
Borrowings excluding overdrafts
(523,000)
-
(523,000)
10,964,956
6,054,589
17,019,545
2023-03-312022-04-01falseCCH SoftwareCCH Accounts Production 2023.300Mr F D M ValliMr H D M ValliMr Y D M ValliMr S Vallifalse043941062022-04-012023-03-3104394106bus:Director12022-04-012023-03-3104394106bus:Director22022-04-012023-03-3104394106bus:Director32022-04-012023-03-3104394106bus:CompanySecretary12022-04-012023-03-3104394106bus:RegisteredOffice2022-04-012023-03-31043941062023-03-31043941062021-04-012022-03-3104394106core:RetainedEarningsAccumulatedLosses2021-04-012022-03-3104394106core:RetainedEarningsAccumulatedLosses2022-04-012023-03-3104394106core:OtherResidualIntangibleAssets2023-03-3104394106core:OtherResidualIntangibleAssets2022-03-3104394106core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2023-03-3104394106core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2022-03-31043941062022-03-3104394106core:LandBuildingscore:OwnedOrFreeholdAssets2023-03-3104394106core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-03-3104394106core:FurnitureFittings2023-03-3104394106core:LandBuildingscore:OwnedOrFreeholdAssets2022-03-3104394106core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-03-3104394106core:FurnitureFittings2022-03-3104394106core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3104394106core:CurrentFinancialInstrumentscore:WithinOneYear2022-03-3104394106core:CurrentFinancialInstruments2023-03-3104394106core:CurrentFinancialInstruments2022-03-3104394106core:ShareCapital2023-03-3104394106core:ShareCapital2022-03-3104394106core:RetainedEarningsAccumulatedLosses2023-03-3104394106core:RetainedEarningsAccumulatedLosses2022-03-3104394106core:ShareCapital2021-03-3104394106core:RetainedEarningsAccumulatedLosses2021-03-31043941062022-03-31043941062021-03-3104394106core:IntangibleAssetsOtherThanGoodwill2022-04-012023-03-3104394106core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2022-04-012023-03-3104394106core:LandBuildingscore:OwnedOrFreeholdAssets2022-04-012023-03-3104394106core:LandBuildingscore:LongLeaseholdAssets2022-04-012023-03-3104394106core:FurnitureFittings2022-04-012023-03-3104394106core:UKTax2022-04-012023-03-3104394106core:UKTax2021-04-012022-03-310439410612022-04-012023-03-310439410612021-04-012022-03-3104394106core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2022-03-3104394106core:LandBuildingscore:OwnedOrFreeholdAssets2022-03-3104394106core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-03-3104394106core:FurnitureFittings2022-03-3104394106core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-04-012023-03-3104394106core:FinancialLiabilitiesHeldForTradingcore:FinancialInstrumentsHeldForSale2023-03-3104394106bus:PrivateLimitedCompanyLtd2022-04-012023-03-3104394106bus:FRS1022022-04-012023-03-3104394106bus:Audited2022-04-012023-03-3104394106bus:FullAccounts2022-04-012023-03-31xbrli:purexbrli:sharesiso4217:GBP