Company registration number SC078972 (Scotland)
VALTTI LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
VALTTI LTD
COMPANY INFORMATION
Directors
J Hancox
D Turkington
Company number
SC078972
Registered office
Valtti Building
27 Marnin Way
West Edinburgh Business Park
Edinburgh
United Kingdom
EH12 9GD
Auditor
Azets Audit Services
5 Whitefriars Crescent
Perth
United Kingdom
PH2 0PA
Bankers
HSBC Bank plc
76 Hanover Street
Edinburgh
United Kingdom
EH2 1EL
VALTTI LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
VALTTI LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The principal activities of the business are the supply and distribution of paint and related products to the trade and retail market.

Supply of raw materials and finished products during the year were particularly volatile, which resulted in supply shortages and price fluctuations in the period, and consequently, challenging trading conditions.

Despite this, the business continued to make good progress. Turnover increased by 5.6% in 2023 which the directors regard as acceptable. Sales per employee were £317,382, an increase of 0.5% compared to the year ended 31st December 2022 (2022: £315,649).

Profit before taxation of £794,956 for the year ended 31st December 2023 compares to a profit of £1,201,069 in the prior year.

The business is continuing to look at opportunities to grow with the focus being on digitally integrated developments.

Principal risks and uncertainties

The business operates within a trade and retail market and the general economic conditions faced by consumers has always been a risk, coupled with competitive pressures.

The senior management team and the wider board review the risks on a regular basis. Adjustments are made to pricing, delivery, and service where appropriate. The overall strategy and market positioning is understood by the business which allows us to focus on the correct customer and provide the correct product mix.

 

Credit risk

Policies have been implemented to ensure appropriate credit checks on trade customers.

 

Liquidity Risk

The business has adequate debt finance and working capital to support the current strategy.

 

Supplier Risk

Dependency on Few Suppliers: Overreliance on a one main supplier poses a risk to our supply chain stability. The business works closely with its main supplier to understand and mitigate supply issues.

Future developments

Development of our market availability through expansion of our online presence, as well as through our distribution partners remain our key areas of focus. We aim to have a more customer centric approach through an enhancement of our customer service and engagement through personalised experiences.

VALTTI LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators

The business measures financial performance by revenue and profitability. Several KPIs are used within the business on a weekly and monthly business to measure performance.

All KPIs drive the following key metrics:

 

 

2023

2022

Change

 

£

£

%

 

 

 

 

Turnover

13,330,043

12,625,944

+5.6%

Profit before tax

794,956

1,201,069

-33.8%

EBITDA

1,132,962

1,510,327

-24.9%

 

Other performance indicators

Other key performance indicators include gross margin, staff costs as a % of revenue and various e-commerce metrics. All indicators are reviewed on a weekly or monthly basis.

On behalf of the board

D Turkington
Director
23 September 2024
VALTTI LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

Principal activities

The principal activity of the company continued to be that of paint wholesalers.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £150,000. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

J Hancox
D Turkington
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:

 

 

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
D Turkington
Director
23 September 2024
VALTTI LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VALTTI LTD
- 4 -
Opinion

We have audited the financial statements of Valtti Ltd (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, 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:

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 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.

Other information

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:

VALTTI LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VALTTI LTD
- 5 -
Matters on which we are required to report by exception

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:

 

 

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.

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.

VALTTI LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VALTTI LTD
- 6 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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 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.

Neil Morrison
Senior Statutory Auditor
For and on behalf of Azets Audit Services
24 September 2024
Chartered Accountants
Statutory Auditor
5 Whitefriars Crescent
Perth
United Kingdom
PH2 0PA
VALTTI LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
13,330,043
12,625,944
Cost of sales
(9,133,810)
(8,283,654)
Gross profit
4,196,233
4,342,290
Administrative expenses
(3,359,113)
(3,088,269)
Operating profit
4
837,120
1,254,021
Interest receivable and similar income
7
185
620
Interest payable and similar expenses
8
(42,349)
(53,572)
Profit before taxation
794,956
1,201,069
Tax on profit
9
(139,263)
(191,243)
Profit for the financial year
655,693
1,009,826

The profit and loss account has been prepared on the basis that all operations are continuing operations.

VALTTI LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
£
£
Profit for the year
655,693
1,009,826
Other comprehensive income
-
-
Total comprehensive income for the year
655,693
1,009,826
VALTTI LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
728,363
902,176
Investments
12
75,695
75,695
804,058
977,871
Current assets
Stocks
13
1,695,311
1,724,471
Debtors
14
3,887,229
2,742,235
Cash at bank and in hand
131,334
238,609
5,713,874
4,705,315
Creditors: amounts falling due within one year
15
(2,919,706)
(2,504,594)
Net current assets
2,794,168
2,200,721
Total assets less current liabilities
3,598,226
3,178,592
Creditors: amounts falling due after more than one year
16
(154,261)
(203,512)
Provisions for liabilities
Deferred tax liability
19
162,188
198,996
(162,188)
(198,996)
Net assets
3,281,777
2,776,084
Capital and reserves
Called up share capital
21
5,000
5,000
Share premium account
22
38,000
38,000
Capital redemption reserve
23
7,000
7,000
Profit and loss reserves
24
3,231,777
2,726,084
Total equity
3,281,777
2,776,084
The financial statements were approved by the board of directors and authorised for issue on 23 September 2024 and are signed on its behalf by:
J Hancox
D Turkington
Director
Director
Company Registration No. SC078972
VALTTI LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
5,000
38,000
7,000
1,766,258
1,816,258
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
1,009,826
1,009,826
Dividends
10
-
-
-
(50,000)
(50,000)
Balance at 31 December 2022
5,000
38,000
7,000
2,726,084
2,776,084
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
655,693
655,693
Dividends
10
-
-
-
(150,000)
(150,000)
Balance at 31 December 2023
5,000
38,000
7,000
3,231,777
3,281,777
VALTTI LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
328,852
674,105
Interest paid
(42,349)
(53,572)
Income taxes paid
(98,287)
(88,758)
Net cash inflow from operating activities
188,216
531,775
Investing activities
Purchase of tangible fixed assets
(149,889)
(279,728)
Proceeds from disposal of tangible fixed assets
64,401
-
0
Purchase of investments
-
0
(75,695)
Repayment of loans
25,145
4,731
Interest received
185
620
Net cash used in investing activities
(60,158)
(350,072)
Financing activities
Payment of finance leases obligations
(103,429)
(77,259)
Dividends paid
(150,000)
(50,000)
Net cash used in financing activities
(253,429)
(127,259)
Net (decrease)/increase in cash and cash equivalents
(125,371)
54,444
Cash and cash equivalents at beginning of year
(206,580)
(261,024)
Cash and cash equivalents at end of year
(331,951)
(206,580)
Relating to:
Cash at bank and in hand
131,334
238,609
Bank overdrafts included in creditors payable within one year
(463,285)
(445,189)
VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Valtti Ltd is a private company limited by shares incorporated in Scotland. The registered office is Valtti Building, 27 Marnin Way, West Edinburgh Business Park, Edinburgh, United Kingdom, EH12 9GD.

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
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.

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:

Leasehold improvements
20% on reducing balance
Plant and equipment
25% on reducing balance
Fixtures and fittings
25% on reducing balance
Computers
33% on cost
Motor vehicles
25% on reducing balance

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.

VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Fixed asset investments

Motor vehicles, which is an asset held 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.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

1.7
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.

1.8
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.

VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.9
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.

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.

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
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.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.

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.

1.12
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.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
13,330,043
12,625,944
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
13,103,950
12,436,706
Europe
121,746
114,181
Rest of the World
104,347
75,057
13,330,043
12,625,944
2023
2022
£
£
Other revenue
Interest income
185
620
VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(18,011)
48,836
Fees payable to the company's auditor for the audit of the company's financial statements
15,600
11,000
Depreciation of owned tangible fixed assets
295,842
256,306
Profit on disposal of tangible fixed assets
(1,229)
-
Operating lease charges
197,103
173,712
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Sales and administration
42
40

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,630,243
1,508,603
Social security costs
177,284
169,161
Pension costs
41,422
37,982
1,848,949
1,715,746
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
372,500
350,000
Company pension contributions to defined contribution schemes
9,000
9,000
381,500
359,000
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
222,500
200,000
VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
185
620
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
758
1,002
Other interest on financial liabilities
28,979
39,990
29,737
40,992
Other finance costs:
Interest on finance leases and hire purchase contracts
12,612
12,580
42,349
53,572
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
207,831
130,047
Adjustments in respect of prior periods
(31,760)
-
0
Total current tax
176,071
130,047
Deferred tax
Origination and reversal of timing differences
(36,808)
61,196
Total tax charge
139,263
191,243
VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 19 -

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
794,956
1,201,069
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
198,739
228,203
Tax effect of expenses that are not deductible in determining taxable profit
11,861
1,184
Adjustments in respect of prior years
(31,760)
-
0
Effect of change in corporation tax rate
(11,761)
-
0
Permanent capital allowances in excess of depreciation
46,843
(10,183)
R&D additional deduction
(38,439)
(89,157)
Deferred tax movements
(36,808)
61,196
General stock provision
588
-
0
Taxation charge for the year
139,263
191,243
10
Dividends
2023
2022
£
£
Final paid
150,000
50,000
VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
55,938
350,326
464,592
630,821
452,675
1,954,352
Additions
2,158
-
0
9,731
141,731
31,581
185,201
Disposals
-
0
(72,501)
-
0
-
0
(19,971)
(92,472)
At 31 December 2023
58,096
277,825
474,323
772,552
464,285
2,047,081
Depreciation and impairment
At 1 January 2023
37,851
188,456
301,704
307,594
216,571
1,052,176
Depreciation charged in the year
3,715
28,594
39,863
163,526
60,144
295,842
Eliminated in respect of disposals
-
0
(12,241)
-
0
-
0
(17,059)
(29,300)
At 31 December 2023
41,566
204,809
341,567
471,120
259,656
1,318,718
Carrying amount
At 31 December 2023
16,530
73,016
132,756
301,432
204,629
728,363
At 31 December 2022
18,087
161,870
162,888
323,227
236,104
902,176

Included in the above held under finance leases with a net book value of £240,421 (year to 31 December 2022 - £298,913).

12
Fixed asset investments
2023
2022
£
£
Unlisted investments
75,695
75,695

The fixed asset investment in the period relates to the purchase of one of the last ever Landrover Defender's off the production line.

 

This asset is being held for capital appreciation and is not used in the day to day operations of the business.

 

The vehicle is being held in a secure location and not been driven. As such this is being treated as a fixed asset investment.

13
Stocks
2023
2022
£
£
Finished goods and goods for resale
1,695,311
1,724,471
VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,512,258
1,353,083
Other debtors
2,138,235
1,234,075
Prepayments and accrued income
236,736
155,077
3,887,229
2,742,235

Included within trade debtors are balances totalling £463,473 (2022 - £445,189) that are subject to factoring arrangements. The trade debtor balances have been transferred to the counterparty, though the transaction does not qualify for derecognition on the basis that the risk and reward is retained by the company.

15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
463,285
445,189
Obligations under finance leases
18
62,472
91,228
Other borrowings
17
10,000
10,000
Trade creditors
1,633,700
1,437,277
Corporation tax
207,831
130,047
Other taxation and social security
386,494
323,867
Other creditors
19,239
12,445
Accruals and deferred income
136,685
54,541
2,919,706
2,504,594
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
139,310
178,671
Other creditors
14,951
24,841
154,261
203,512
17
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
463,285
445,189
Other loans
24,951
34,841
473,285
455,189
VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Loans and overdrafts
(Continued)
- 22 -

The bank overdraft is secured by a bond and floating charge granted in favour to HSBC Bank plc.

 

 

18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
62,472
91,228
In two to five years
139,310
178,671
201,782
269,899

The hire purchase liabilities are secured over the assets concerned.

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
162,188
198,996
2023
Movements in the year:
£
Liability at 1 January 2023
198,996
Credit to profit or loss
(36,808)
Liability at 31 December 2023
162,188

The deferred tax liability set out above is expected to reverse within 12 months 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
41,422
37,982

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.

VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Class A Ordinary of £1 each
5,000
5,000
5,000
5,000
22
Share premium account
2023
2022
£
£
At the beginning and end of the year
38,000
38,000
23
Capital redemption reserve
2023
2022
£
£
At the beginning and end of the year
7,000
7,000
24
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
2,726,084
1,766,258
Profit for the year
655,693
1,009,826
Dividends declared and paid in the year
(150,000)
(50,000)
At the end of the year
3,231,777
2,726,084
25
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
259,350
176,045
Between two and five years
755,488
657,832
In over five years
-
0
47,303
1,014,838
881,180
26
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties: Mesta Limited which is owned by the directors of Vallti Limited.

VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
26
Related party transactions
(Continued)
- 24 -
Loan
Purchase of services
2023
2022
2023
2022
£
£
£
£
2,119,717
1,185,098
156
-
Other information

The loan is unsecured, interest free and repayable on demand.

27
Directors' transactions

Dividends totalling £150,000 (2022 - £50,000) were paid in the year in respect of shares held by the company's directors.

The loan below is unsecured, repayable on demand and interest is charged at 2.25% per annum.

Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
J Hancox -
2.25
27,361
14,225
44
(39,414)
2,216
27,361
14,225
44
(39,414)
2,216
28
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
655,693
1,009,826
Adjustments for:
Taxation charged
139,263
191,243
Finance costs
42,349
53,572
Investment income
(185)
(620)
Gain on disposal of tangible fixed assets
(1,229)
-
Depreciation and impairment of tangible fixed assets
295,842
256,306
Movements in working capital:
Decrease in stocks
29,160
16,309
Increase in debtors
(1,170,139)
(640,181)
Increase/(decrease) in creditors
338,098
(212,350)
Cash generated from operations
328,852
674,105
VALTTI LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
29
Analysis of changes in net debt
1 January 2023
Cash flows
New finance leases
31 December 2023
£
£
£
£
Cash at bank and in hand
238,609
(107,275)
-
131,334
Bank overdrafts
(445,189)
(18,096)
-
(463,285)
(206,580)
(125,371)
-
(331,951)
Borrowings excluding overdrafts
(34,841)
9,890
-
(24,951)
Obligations under finance leases
(269,899)
103,429
(35,312)
(201,782)
(511,320)
(12,052)
(35,312)
(558,684)
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