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Registered number: 11418626









Race Valley Limited









Annual Report and Consolidated Financial Statements

For the year ended 31 December 2023

 
Race Valley Limited
 
 
Company Information


Directors
H Rosenthal 
T Wade 




Company secretary
T Wade



Registered number
11418626



Registered office
Renthal Limited
Bredbury Park Way

Bredbury

Stockport

Cheshire

SK6 2SN




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

3 Stockport Exchange

Stockport

Cheshire

SK1 3GG





 
Race Valley Limited
 

Contents



Page
Group strategic report
 
1
Directors' report
 
2 - 3
Independent auditors' report
 
4 - 7
Consolidated statement of income and retained earnings
 
8
Consolidated statement of financial position
 
9
Company statement of financial position
 
10
Consolidated statement of cash flows
 
11
Consolidated analysis of net debt
 
12
Notes to the financial statements
 
13 - 29


 
Race Valley Limited
 
 
Group Strategic Report
For the year ended 31 December 2023

Introduction
 
The directors present the strategic report for the period ended 31st December 2023.

Business review and key performance indicators
 
The group has seen a challenging 2023 as the industry dealt with the aftermath of the Covid-19 boom.  These challenges presented themselves by way of over inventory in the supply chain, continuing inflationary pressures and customers generally experiencing cash pressures, particularly where credit lines were not flexible with inventory holdings.  The impact of this environment is magnified on our results as customers reduced inventory holding, despite retail sales showing some resilience.
The Directors anticipated these challenges well and are pleased with the performance of the group maintaining modest profitability before amortisation; a strong balance sheet; and net cash position, through a particularly tough period.
Throughout 2023, despite the challenges, the group continued to invest in new manufacturing methods, expand its R&D pipeline and on-board a number of strategically important customer relationships.
The first half of 2024 has seen a marked improvement in the market over 2023 as order take has recovered and we begin to see the benefits of our efforts in launching new products and improving distribution channels.
The Group is well positioned to invest in its future with a strong operating balance sheet; good liquidity and net cash
resources.
Charitable contributions
In 2022 the group elected to support the North West Air Ambulance charity as its sole corporate charity of choice. Since inception in 2021 the Group has raised £17,098 for the NWAA.

Principal risks and uncertainties
 
The group operates in a global market and transacts in three major currencies. Whilst this gives the group some stability it also presents challenges in terms of currency risk. A number of efforts are made to manage currency risks as they arise but there is no fail safe strategy in this regard.
The group derives the majority of its revenue from high end Aluminium and Steel products. Whilst a number of efforts are made to manage purchasing risk, the group is constantly subject to the supply-demand economics of these metals.


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



................................................
T Wade
Director

Date: 16 September 2024

Page 1

 
Race Valley Limited
 
 
 
Directors' Report
For the year ended 31 December 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Principal activity

The Company’s principal activity is a holding company for investments in the motorcycle and cycle industry.
The Group's principal activity during the year was the manufacture, marketing and sale of premium motor-cycle and cycle parts. 

Directors

The directors who served during the year were:

H Rosenthal 
T Wade 

Results and dividends

The loss for the year, after taxation, amounted to £382,498 (2022 - profit £2,085,719).

Directors' responsibilities statement

The directors are responsible for preparing the group strategic report, the directors' report and the consolidated 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Future developments

The Group is well positioned to invest in its future with a strong operating balance sheet; good liquidity and net cash resources.

Page 2

 
Race Valley Limited
 
 
 
Directors' Report (continued)
For the year ended 31 December 2023

Disclosure of information to auditors

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the company since the year end.

Auditors

The auditorsHurst Accountants Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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





................................................
T Wade
Director

Date: 16 September 2024

Page 3

 
Race Valley Limited
 
 
 
Independent auditors' report to the members of Race Valley Limited
 

Opinion


We have audited the financial statements of Race Valley Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the consolidated statement of income and retained earnings, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent 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.


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Page 4

 
Race Valley Limited
 
 
 
Independent auditors' report to the members of Race Valley Limited (continued)


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the group 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 group strategic report and the directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the directors' responsibilities statement set out on page 2, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 5

 
Race Valley Limited
 
 
 
Independent auditors' report to the members of Race Valley Limited (continued)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
• The nature of the industry and sector in which the group operates; the control environment and business performance  including key drivers for directors' remuneration, bonus levels and performance targets.
• The outcome of enquiries of local management and parent company management, including whether management    was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge   of any actual, suspected, or alleged fraud. 
• Supporting documentation relating to the Group's policies and procedures for:
 - Identifying, evaluating, and complying with laws and regulations
 - Detecting and responding to the risks of fraud
• The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
• The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the    financial statements and any potential indicators of fraud.
• The legal and regulatory framework in which the Group operates, particularly those laws and regulations which have   a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which    had a fundamental effect on the operations of the Group, including General Data Protection requirements, and Anti-  bribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
• Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with    the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
• Discussions with management, including consideration of known or suspected instances of non-compliance with laws  and regulations and fraud.
• Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect    irregularities.
• Enquiring of management about any actual and potential litigation and claims.
• Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of    material misstatement due to fraud.




 
Page 6

 
Race Valley Limited
 
 
 
Independent auditors' report to the members of Race Valley Limited (continued)


We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to    identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or   error.
• Challenging assumptions made by management in their significant accounting estimates, and assessing whether the    judgements made in making accounting estimates are indicative of a potential bias; and
• Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of    business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them.  Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Mike Jackson (Senior statutory auditor)
for and on behalf of Hurst Accountants Limited
Chartered Accountants
Statutory Auditors
3 Stockport Exchange
Stockport
Cheshire
SK1 3GG

Date:17 September 2024
Page 7

 
Race Valley Limited
 
 
Consolidated Statement of Income and Retained Earnings
For the year ended 31 December 2023

2023
2022
Note
£
£

  

Turnover
 4 
11,827,024
18,185,882

Cost of sales
  
(7,919,475)
(11,166,487)

Gross profit
  
3,907,549
7,019,395

Administrative expenses
  
(4,222,213)
(4,781,723)

Operating (loss)/profit
 5 
(314,664)
2,237,672

Interest payable and similar expenses
 9 
(50,857)
(36,924)

(Loss)/profit before tax
  
(365,521)
2,200,748

Tax on (loss)/profit
 10 
(16,977)
(115,029)

(Loss)/profit after tax
  
(382,498)
2,085,719

  

  

Retained earnings at the beginning of the year
  
5,313,692
4,077,973

  
5,313,692
4,077,973

(Loss)/profit for the year
  
(382,498)
2,085,719

Dividends declared and paid
  
-
(850,000)

Retained earnings at the end of the year
  
4,931,194
5,313,692

There were no recognised gains and losses for 2023 or 2022 other than those included in the consolidated statement of income and retained earnings.

The notes on pages 13 to 29 form part of these financial statements.

Page 8

 
Race Valley Limited
Registered number: 11418626

Consolidated Statement of Financial Position
As at 31 December 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 11 
1,937,400
2,367,935

Tangible assets
 12 
865,783
944,573

  
2,803,183
3,312,508

Current assets
  

Stocks
 14 
3,020,432
4,959,525

Debtors: amounts falling due within one year
 15 
1,828,002
2,077,296

Cash at bank and in hand
 16 
1,250,196
2,072,543

  
6,098,630
9,109,364

Creditors: amounts falling due within one year
 17 
(1,604,713)
(4,494,696)

Net current assets
  
 
 
4,493,917
 
 
4,614,668

Total assets less current liabilities
  
7,297,100
7,927,176

Creditors: amounts falling due after more than one year
 18 
(1,800,000)
(2,036,111)

Provisions for liabilities
  

Deferred taxation
 20 
(165,906)
(177,373)

  
 
 
(165,906)
 
 
(177,373)

Net assets
  
5,331,194
5,713,692


Capital and reserves
  

Called up share capital 
 21 
400,000
400,000

Profit and loss account
 22 
4,931,194
5,313,692

  
5,331,194
5,713,692


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




................................................
T Wade
Director

Date: 16 September 2024

The notes on pages 13 to 29 form part of these financial statements.

Page 9

 
Race Valley Limited
Registered number: 11418626

Company Statement of Financial Position
As at 31 December 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 13 
9,537,758
9,537,758

Current assets
  

Cash at bank and in hand
 16 
250,000
150,000

  
250,000
150,000

Creditors: amounts falling due within one year
 17 
(3,842,368)
(4,742,368)

Net current liabilities
  
 
 
(3,592,368)
 
 
(4,592,368)

Total assets less current liabilities
  
5,945,390
4,945,390

  

Creditors: amounts falling due after more than one year
 18 
(1,800,000)
(1,800,000)

  

Net assets
  
4,145,390
3,145,390


Capital and reserves
  

Called up share capital 
 21 
400,000
400,000

Profit and loss account carried forward
  
3,745,390
2,745,390

  
4,145,390
3,145,390


The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not
presented its own Statement of Comprehensive Income in these financial statements.
The profit for the parent company for the year was £1,000,000 (
2022: £954,351).

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


................................................
T Wade
Director

Date: 16 September 2024

The notes on pages 13 to 29 form part of these financial statements.

Page 10

 
Race Valley Limited
 

Consolidated Statement of Cash Flows
For the year ended 31 December 2023

2023
2022
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(382,498)
2,085,719

Adjustments for:

Amortisation of intangible assets
430,535
430,535

Depreciation of tangible assets
179,913
196,019

Loss on disposal of tangible assets
-
(1,461)

Interest paid
50,857
36,924

Taxation charge
47,697
115,029

Decrease/(increase) in stocks
1,939,093
(1,343,764)

Decrease/(increase) in debtors
249,294
(1,058,202)

(Decrease)/increase in creditors
(2,624,531)
1,332,611

Corporation tax paid
(277,394)
(344,024)

Net cash (used)/generated from operating activities

(387,034)
1,449,386


Cash flows from investing activities

Purchase of tangible fixed assets
(101,123)
(209,714)

Sale of tangible fixed assets
-
2,189

Net cash used in investing activities

(101,123)
(207,525)

Cash flows from financing activities

Repayment of loans
(283,333)
(283,334)

Repayment of other loans
-
(185,043)

Dividends paid
-
(850,000)

Interest paid
(50,857)
(36,924)

Net cash used in financing activities
(334,190)
(1,355,301)

Net decrease in cash and cash equivalents
(822,347)
(113,440)

Cash and cash equivalents at beginning of year
2,072,543
2,185,983

Cash and cash equivalents at the end of year
1,250,196
2,072,543


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,250,196
2,072,543

1,250,196
2,072,543


Page 11

 
Race Valley Limited
 

Consolidated Analysis of Net Debt
For the year ended 31 December 2023




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

2,072,543

(822,347)

1,250,196

Debt due after 1 year

(2,036,111)

236,111

(1,800,000)

Debt due within 1 year

(283,333)

47,222

(236,111)


(246,901)
(539,014)
(785,915)

The notes on pages 13 to 29 form part of these financial statements.

Page 12

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

1.


General information

Race Valley Limited is a company limited by members capital incorporated in England and Wales.  The address of the registered office and principle place of business is Bredbury Park Way, Bredbury, Stockport, SK6 2SN.  The company registration number is 11418626.
The principal activity of the group is the manufacture and sale of motorcycle and cycle parts. The principal activity of the company is that of a holding company.  

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of income and retained earnings and cashflow statement in these financial statements

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

 
2.3

Going concern

The financial statements have been prepared on a going concern basis. The following paragraphs set out the
basis of which the directors have reached their conclusion.
The Group has a Loss before tax of £366k (
2022: Profit £2.2m) and net assets totalling £5.3m (2022: £5.7m) at 31 December 2023.
The Group currently meets its working capital requirements through its cash balances and credit facilities.
Based on the Group's forecasts and projections, the directors believe they have sufficient facilities to trade
through the next 12 month period.
Therefore, the directors believe it is appropriate to prepare the accounts to 31 December 2023 on a going
concern basis and there will be no adverse effect on solvency for more than 12 months after the date of
approval of the financial statements.

Page 13

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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

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

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

 
2.5

Revenue

Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates,
value added tax and other sales taxes.
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 delivery to the customer), the amount of revenue can be measured reliably,
it is probable that the economic benefits associated with the transaction will flow to the entity.

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss 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.

 
2.7

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

Page 14

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.8

Finance costs

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

 
2.9

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Group in independently administered funds.

 
2.10

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 and the Group operate and generate 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;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

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.

Page 15

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.11

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of income and retained earnings over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.12

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.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line and reducing balance method.

Depreciation is provided on the following basis:

Plant and machinery
-
15 - 33% reducing balance and straight line
Motor vehicles
-
25% reducing balance

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.

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.14

Stocks

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

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

Page 16

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.15

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.

 
2.16

Cash

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
In the consolidated statement of cash flows, cash is shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.17

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.

 
2.18

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 17

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.19

Financial instruments

The Group 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.
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 consolidated statement of income and retained earnings.
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 difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group 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.

 
2.20

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.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make significant judgements and estimates that
affect amounts recognised for assets and liabilities at the reporting date and the amounts of revenue and expenses
incurred during the period. Actual outcomes may differ from these judgements, estimates and assumptions.
The directors believe that judgements, estimates and assumptions do not have a significant risk of causing a material
difference to the carrying amounts of the assets and liabilities within the next financial year.

Page 18

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

4.


Turnover

The whole of the turnover is attributable to the group's principal activity as described in note 1.

Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
2,004,821
2,909,741

Rest of Europe
2,546,824
5,819,482

Rest of the world
7,275,379
9,456,659

11,827,024
18,185,882



5.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2023
2022
£
£

Exchange differences
286,204
254,178

Other operating lease rentals
276,243
285,095


6.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
18,660
15,500




Taxation compliance services
3,000
2,500

All other assurance services
1,350
1,000

Page 19

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

7.


Employees

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


        2023
        2022
            No.
            No.







Staff
79
101



Directors
4
4

83
105

The Company has no employees, other than the director, who did not receive any remuneration (2022 - £Nil).
Staff costs, including directors' remuneration, were as follows:


Group
2023
Group
2022
£
£



Wages and salaries
2,487,743
3,227,245

Social security costs
240,981
339,073

Cost of defined contribution scheme
117,444
129,972

2,846,168
3,696,290


8.


Directors' remuneration




2023
2022
£
£



Directors' emoluments
117,972
155,791

Company contributions to defined contribution pension schemes
24,474
23,604

142,446
179,395

During the year retirement benefits were accruing to 1 director (2022 - 1) in respect of defined contribution pension schemes.

Page 20

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

9.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
33,528
34,563

Other loan interest payable
5,649
1,384

Invoice discounting loan
11,680
977

50,857
36,924


10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
10,120
62,033

Adjustments in respect of previous periods
18,324
-


Total current tax
28,444
62,033

Deferred tax


Origination and reversal of timing differences
(11,467)
52,996

Total deferred tax
(11,467)
52,996


Taxation on profit on ordinary activities
16,977
115,029
Page 21

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


(Loss)/profit on ordinary activities before tax
(365,521)
2,200,748


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
(91,380)
418,142

Effects of:


Non-tax deductible amortisation of goodwill
107,634
81,802

Expenses not deductible for tax purposes
3,291
1,130

Adjustment in research and development tax credit leading to a decrease in the tax charge
-
(210,490)

Adjustment in research and development tax credit leading to a decrease in thetaxcharge - current year
-
(206,697)

Other timing differences leading to an increase (decrease) in taxation
(277)
526

Changes in rates leading to an increase (decrease) in the tax charge
(1,834)
42,570

Super deduction adjustment
(457)
(11,954)

Total tax charge for the year
16,977
115,029


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 22

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

11.


Intangible assets

Group 





Goodwill

£



Cost


At 1 January 2023
4,305,345



At 31 December 2023

4,305,345



Amortisation


At 1 January 2023
1,937,410


Charge for the year
430,535



At 31 December 2023

2,367,945



Net book value



At 31 December 2023
1,937,400



At 31 December 2022
2,367,935



Page 23

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

12.


Tangible fixed assets

Group






Plant and machinery
Motor vehicles
Total

£
£
£



Cost


At 1 January 2023
5,380,257
176,077
5,556,334


Additions
86,845
14,278
101,123



At 31 December 2023

5,467,102
190,355
5,657,457



Depreciation


At 1 January 2023
4,515,159
96,602
4,611,761


Charge for the year
158,882
21,031
179,913



At 31 December 2023

4,674,041
117,633
4,791,674



Net book value



At 31 December 2023
793,061
72,722
865,783



At 31 December 2022
865,098
79,475
944,573

The Company has no tangible fixed assets.

Page 24

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

13.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost 


At 1 January 2023
9,537,758



At 31 December 2023
9,537,758





Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Renthal Limited
Same as the company
Ordinary
100%


14.


Stocks

Group
Group
2023
2022
£
£

Raw materials and consumables
1,307,628
1,725,584

Work in progress
1,329,123
1,371,279

Finished goods for resale
383,681
1,862,662

3,020,432
4,959,525


The difference between purchase price or production cost of stocks and their replacement cost is not material.



Page 25

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

15.


Debtors

Group
Group
2023
2022
£
£


Trade debtors
1,377,514
1,810,561

Other debtors
4,105
89,139

Prepayments
446,383
177,596

1,828,002
2,077,296



16.


Cash

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Cash at bank and in hand
1,250,196
2,072,543
250,000
150,000



17.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank loans (see note 19)
236,111
283,333
-
-

Trade creditors
833,110
2,441,232
-
-

Amounts owed to group undertakings
-
-
3,842,368
4,742,368

Corporation tax
35,066
253,296
-
-

Other taxation and social security
59,710
115,761
-
-

Other creditors
22,644
29,921
-
-

Accruals and deferred income
418,072
1,371,153
-
-

1,604,713
4,494,696
3,842,368
4,742,368


Amounts due to group undertakings are repayable on demand, unsecured and bear no interest.

Page 26

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

18.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank loans (see note 19)
-
236,111
-
-

Other loans
1,800,000
1,800,000
1,800,000
1,800,000

1,800,000
2,036,111
1,800,000
1,800,000




The aggregate amount of liabilities repayable wholly or in part more than five years after the reporting date is:
 
Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Repayable other than by instalments
1,800,000
1,800,000
1,800,000
1,800,000




19.


Loans


Analysis of the maturity of loans is given below:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Amounts falling due within one year

Bank loans
236,111
283,333
-
-

Amounts falling due 1-2 years

Bank loans
-
236,111
-
-

Amounts falling due after more than 5 years

Other loans
1,800,000
1,800,000
1,800,000
1,800,000

2,036,111
2,319,444
1,800,000
1,800,000


HSBC provided a facility under the Coronavirus Business Interruption scheme, the amount outstanding was £236,111 (2022: £519,444) as at 31 December 2023. The facility is repayable in monthly instalments which commenced in September 2021.
Interest is payable at 3.99% above the Bank of England Base rate. The facility is secured by way of a fixed and floating charge over the asset of the Group.
Included in other loans are amounts totalling £1,800,000 (
2022: £1,800,000) that is interest free and redeemable based on external conditions which are not deemed likely to be fulfilled within the next five years.
Other creditors are secured by debentures containing fixed and floating charges over the assets of the Group.

Page 27

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

20.


Deferred taxation


Group



2023
2022


£

£






At beginning of year
(177,373)
(124,377)


Charged to profit or loss
11,467
(52,996)



At end of year
(165,906)
(177,373)

Group
Group
2023
2022
£
£

Accelerated capital allowances
(173,435)
(184,828)

Tax losses carried forward
7,529
7,455

(165,906)
(177,373)


21.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



117,647 (2022 - 117,647) Ordinary A shares of £1 each
117,647
117,647
82,353 (2022 - 82,353) Ordinary B shares of £1 each
82,353
82,353
200,000 (2022 - 200,000) Ordinary C shares of £1 each
200,000
200,000

400,000

400,000


The company has an Enterprise Management scheme in place whereby the holders are able to acquire shares
in the company. A share based payment charge has not been recognised as it is deemed immaterial to the 
financial statements. The number of options outstanding at 31 December 2023 is 8,163 (
2022: 8,163) and the weighted average exercise price for those shares is £1 (2022: £1). 
All entitlements of the shares rank pari passu.



22.


Reserves

Profit and loss account

Includes current and prior year profits and losses, net of dividends paid.

Page 28

 
Race Valley Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2023

23.


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 £117,444 (2022: £129,586). Contributions totalling £5,115 (2022: £4,818) were payable to the fund at the balance sheet date and are included in creditors.


24.


Commitments under operating leases

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


Group
Group
2023
2022
£
£

Not later than 1 year
264,500
264,500

Later than 1 year and not later than 5 years
595,125
859,625

859,625
1,124,125

25.


Related party transactions

The Group has not disclosed transactions between wholly owned subsidiaries as permitted by Section 33 of FRS 102.
The Group paid rent in the year totalling £276,243 (
2022: £285,095) to a pension scheme controlled by a shareholder of the ultimate parent company. 
The total amount paid to Key management personnel, including the directors, was £414,149 (
2022: £444,690).
Loans due to directors totalled £900,000 (
2022: £900,000). No interest was charged on these loans (2022: £Nil).
Loans due to other shareholders totalled £900,000 (
2022: £900,000). No interest was charged on these loans (2022: £Nil).
Further details on loans can be found in note 19.

Page 29