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REGISTERED NUMBER: 03598292 (England and Wales)















Strategic Report, Report of the Directors and

Audited Financial Statements for the Year Ended 31 July 2023

for

Northwood Paper Sales Limited

Northwood Paper Sales Limited (Registered number: 03598292)






Contents of the Financial Statements
for the Year Ended 31 July 2023




Page

Company Information 1

Strategic Report 2

Report of the Directors 5

Report of the Independent Auditors 7

Statement of Comprehensive Income 11

Balance Sheet 12

Statement of Changes in Equity 13

Cash Flow Statement 14

Notes to the Financial Statements 15


Northwood Paper Sales Limited

Company Information
for the Year Ended 31 July 2023







DIRECTORS: P Fecher
A S Fecher
L F Lawrence





SECRETARY: K Vekaria





REGISTERED OFFICE: 4 Warner House
Harrovian Business Village
Bessborough Road
Harrow
Middlesex
HA1 3EX





REGISTERED NUMBER: 03598292 (England and Wales)





AUDITORS: CWF & Partners Ltd
Chartered Accountants and
Statutory Auditor
67 Westow Street
Upper Norwood
London
SE19 3RW

Northwood Paper Sales Limited (Registered number: 03598292)

Strategic Report
for the Year Ended 31 July 2023

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

PRINCIPAL ACTIVITY
During the year under review, the company's principal activity is that of the management of the global sourcing and supply of parent reels, both pure and recycled, to the paper converting industry. The company is the UK's largest independent tissue paper agent and supplier.

REVIEW OF BUSINESS
Turnover in the year increased to £117.4m (2022: £110.6m), with a reported profit after taxation at £3.1m (2022: £2.5m). At the year-end, the company's net assets were £8.4m (2022: £6.9m).

The company results for the year are historically the best achieved. These are excellent results when considering all the challenges faced during the year, particularly from global unrest effecting supplies and the effect of inflation on costs.

The company continues to monitor closely the worldwide supply opportunities with a view of seeking the most cost-effective source when considering transport costs and timing issues. This we can achieve because of the relationships we have developed over the years in creating a global supply chain where we have some assurances concerning continuity of supply. This is strengthened by our access on favourable terms to our related companies based in Spain and from the home market. We also have related manufacturing companies which supply the UK market.

During the year our business model moved to an emphasis of sourcing supplies from Europe. With direct deliveries allowing for lower stock levels to be controlled more effectively without the inherent transport factors experienced when purchasing from the Far East markets.

With access to related "Northwood" companies we have some influence in the development of a vertically integrated supply chain of purchasing, manufacturing, converting, warehousing and distribution to the benefit of this company. By becoming a more active participant in trade with our related companies it generates the ability to negotiate more favourable terms and payment dates which improves our cash flow movements. This is reflected in the lower levels of debt and credit at the year end.

The current recessionary economic environment makes competitive trading difficult but with inflation and interest rates appearing to be falling, we are hopeful that management pressure will ease. Worldwide challenges remain with more intense competition for product. The directors believe that they are on course to achieve a further outstanding set of results for this current year. This is achievable because of our accumulated experience in dealing with turbulent times and the financial resources available to the company.

PRINCIPAL RISKS AND UNCERTAINTIES
The company is exposed to a number of financial risks which are managed through internal controls and the application of strict fiscal procedures. The principal assets are trade debtors and stocks. Credit risk is mitigated by the strict application of our credit policy and a continued review of customer accounts. The company has a credit insurance policy in place to minimise the impact of any bad debt.

The company manages risks with exchange rate fluctuations with the application of a system of currency management.

Stocks are strictly maintained and monitored by a dedicated team to ensure that the accounting records agree with the physical amount held. The stock management system enables the company to adhere to agreed delivery schedules for customers with lower stock holdings resulting, in part, by shorter delivery times for stock purchased from European suppliers.


Northwood Paper Sales Limited (Registered number: 03598292)

Strategic Report
for the Year Ended 31 July 2023

SECTION 172(1) STATEMENT
In accordance with S172 of the Companies Act 2006, the directors are required to act individually and collectively in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders. In doing this, the directors must have regard to the following matters:-

-the likely consequences of any decision in the long term;
-the interests of the company's employees;
-the need to foster the company's relationships with suppliers, customers and others;
-the impact of the company's operations on the community and the environment;
-the reputation of the company in maintaining high standards of business conduct; and
-the need to act fairly as between members of the company

Northwood Paper Sales Limited is a private family-owned company where the directors form an integral part of its day-to-day management. The directors regard these matters as embedded in the decision making-process through the company's business strategy, culture, core values and management information flow.

Decision Making
The Directors' strategy is to build and maintain a high-quality business by maintaining and strengthening the balance sheet and ensuring sufficient funding to maintain operational flexibility.

Employees
The directors recognise that the success of the business depends upon attracting, retaining and motivating employees. In valuing our employees, we ensure that we act responsibly in all employment matters, including adopting fair pay and benefit incentives and appropriate policies on equal opportunities and modern slavery.

The Directors have introduced a set of guiding principles that all employees are expected to follow and where the Directors should lead by example.

The Health & Safety of the employees is of paramount importance and all employees are kept informed on health and safety within the office environment.

The periodic employee appraisal program encourages employee feedback and facilitates the opportunity for both employees and managers to set performance goals.

Suppliers and Customers
The Directors believe in lasting relationships with suppliers and customers. This enables us to maintain a class leading supply chain. The company is committed to paying the suppliers in accordance with agreed terms and expects the same from customers.

Business Conduct
The company aims to conduct all its business relationships with integrity and courtesy, with the expectation that we receive the same in return. The Directors believe that maintaining a reputation for competency, reliability, quality and honesty in its dealings is a fundamental requirement to deliver the company's strategic objectives.


Northwood Paper Sales Limited (Registered number: 03598292)

Strategic Report
for the Year Ended 31 July 2023

KEY PERFORMANCE INDICATORS
The company prospers in difficult market conditions because of the attention by management to all aspects of the business. Key performance indicators (KPIs) are sales, purchases and stock levels which are monitored daily and are integral to the control of cash flow, scheduled supplier payments and customer deliveries. Other KPIs are the comprehensive financial and statistical reports covering all aspects of the business which are prepared on a daily basis.

Significant KPIs for the company are:

2023 2022

Turnover £117.4m £110.6m
Growth 6.15% 11.82%
Gross Profit £7.1m £5.7m
Gross Profit % 6.06% 5.14%
Operating Profit £4.8m £3.3m
Stock Trading Ratio 12.67% 17.30%

CARBON DISCLOSURE
Due to the nature of the business, carbon use is negligible, as we are not directly responsible for the manufacture of goods sold and transportation is carried out by third party providers.

ON BEHALF OF THE BOARD:





P Fecher - Director


4 March 2024

Northwood Paper Sales Limited (Registered number: 03598292)

Report of the Directors
for the Year Ended 31 July 2023

The directors present their report with the financial statements of the company for the year ended 31 July 2023.

RESULTS
The profit for the year after taxation amounted to £3,132,643 (2022: £2,525,899).

DIVIDENDS
The total distribution of dividends for the year ended 31 July 2023 paid was £1,176,909 with £400,000 declared but not paid (2022: paid £640,755).

The directors also recommend that no final dividend (2022: £300,000) to be paid.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 August 2022 to the date of this report.

P Fecher
A S Fecher

Other changes in directors holding office are as follows:

L F Lawrence - appointed 25 April 2023

POLITICAL DONATIONS AND EXPENDITURE
The company made donations totalling £10,000. There were no political donations.

POST BALANCE SHEET EVENTS
There are no post balance sheet events to report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Northwood Paper Sales Limited (Registered number: 03598292)

Report of the Directors
for the Year Ended 31 July 2023


AUDITORS
The auditors, CWF & Partners Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





P Fecher - Director


4 March 2024

Report of the Independent Auditors to the Members of
Northwood Paper Sales Limited

Opinion
We have audited the financial statements of Northwood Paper Sales Limited (the 'company') for the year ended 31 July 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 July 2023 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

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 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such 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 the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
Northwood Paper Sales Limited


Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of 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 Statement of Directors' Responsibilities set out on page five, 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 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.

Report of the Independent Auditors to the Members of
Northwood Paper Sales Limited


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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

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

Based on our understanding of the company and the industry in which it operates, we identified that the principal risks of non- compliance with relevant laws and regulations related to Companies Act 2006, UK tax legislation, health and safety regulations, and FSC Chain -of- Custody certification. Non-compliance with these laws and regulations might have a material effect on the financial statements.

We evaluated management's incentives and opportunity for fraudulent manipulation of the financial statement (including the risk of override of controls) and determined that the principal risks were posting of unusual journal entries outside the normal course of business and revenue recognition journal entries to manipulate the company's performance profit measures and other key performance indicators.

Audit procedures performed included: review of the financial statements and disclosures to underlying supporting documentation, review of compliance with the above laws and regulations, enquiries with management, testing of journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

Under ISA 240 (UK) there is a presumed risk that revenue may be misstated due to the improper recognition of revenue. To address this risk, we obtained an understanding of the company's revenue recognition policies and compared these to the accounting standard, performed a walkthrough to confirm our understanding of the processes and controls through which the business initiates, records, processes and reports revenue transactions. We tested a sample of revenue transactions to supporting evidence and tested, on a sample basis, revenue related balances in the balance sheet.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it. 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 Report of the Auditors.

Report of the Independent Auditors to the Members of
Northwood Paper Sales Limited


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 a Report of the Auditors 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.




A J Fitzgerald FCA (Senior Statutory Auditor)
for and on behalf of CWF & Partners Ltd
Chartered Accountants and
Statutory Auditor
67 Westow Street
Upper Norwood
London
SE19 3RW

4 March 2024

Northwood Paper Sales Limited (Registered number: 03598292)

Statement of Comprehensive Income
for the Year Ended 31 July 2023

31.7.23 31.7.22
Notes £    £   

TURNOVER 3 117,383,933 110,604,877

Cost of sales (110,264,701 ) (104,924,419 )
GROSS PROFIT 7,119,232 5,680,458

Administrative expenses (2,531,523 ) (2,337,678 )
OPERATING PROFIT 6 4,587,709 3,342,780

Interest receivable and similar income 11,281 1,909
4,598,990 3,344,689

Interest payable and similar expenses 8 (643,978 ) (223,032 )
PROFIT BEFORE TAXATION 3,955,012 3,121,657

Tax on profit 9 (822,369 ) (595,758 )
PROFIT FOR THE FINANCIAL YEAR 3,132,643 2,525,899

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

3,132,643

2,525,899

Northwood Paper Sales Limited (Registered number: 03598292)

Balance Sheet
31 July 2023

31.7.23 31.7.22
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 11 27,762 -

CURRENT ASSETS
Stocks 12 13,971,106 18,153,742
Debtors 13 25,308,769 35,434,592
Cash at bank and in hand 548,471 252,495
39,828,346 53,840,829
CREDITORS
Amounts falling due within one year 14 29,442,565 45,752,343
NET CURRENT ASSETS 10,385,781 8,088,486
TOTAL ASSETS LESS CURRENT
LIABILITIES

10,413,543

8,088,486

CREDITORS
Amounts falling due after more than one
year

15

1,974,877

1,205,554
NET ASSETS 8,438,666 6,882,932

CAPITAL AND RESERVES
Called up share capital 18 500,100 500,100
Retained earnings 19 7,938,566 6,382,832
SHAREHOLDERS' FUNDS 8,438,666 6,882,932

The financial statements were approved by the Board of Directors and authorised for issue on 4 March 2024 and were signed on its behalf by:




A S Fecher - Director



P Fecher - Director


Northwood Paper Sales Limited (Registered number: 03598292)

Statement of Changes in Equity
for the Year Ended 31 July 2023

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 August 2021 500,100 4,497,688 4,997,788

Changes in equity
Dividends - (640,755 ) (640,755 )
Total comprehensive income - 2,525,899 2,525,899
Balance at 31 July 2022 500,100 6,382,832 6,882,932

Changes in equity
Dividends - (1,576,909 ) (1,576,909 )
Total comprehensive income - 3,132,643 3,132,643
Balance at 31 July 2023 500,100 7,938,566 8,438,666

Northwood Paper Sales Limited (Registered number: 03598292)

Cash Flow Statement
for the Year Ended 31 July 2023

31.7.23 31.7.22
Notes £    £   
Cash flows from operating activities
Cash generated from operations 25 2,323,360 (1,470,636 )
Interest paid (643,978 ) (223,032 )
Tax paid (896,035 ) (363,155 )
Net cash from operating activities 783,347 (2,056,823 )

Cash flows from investing activities
Purchase of tangible fixed assets (31,232 ) -
Interest received 11,281 1,909
Net cash from investing activities (19,951 ) 1,909

Cash flows from financing activities
New loans in year 1,400,000 3,000,000
Loan repayments in year (690,511 ) (485,273 )
Equity dividends paid (1,176,909 ) (640,755 )
Net cash from financing activities (467,420 ) 1,873,972

Increase/(decrease) in cash and cash equivalents 295,976 (180,942 )
Cash and cash equivalents at beginning of
year

26

252,495

433,437

Cash and cash equivalents at end of year 26 548,471 252,495

Northwood Paper Sales Limited (Registered number: 03598292)

Notes to the Financial Statements
for the Year Ended 31 July 2023

1. STATUTORY INFORMATION

Northwood Paper Sales Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial assets and liabilities and in accordance with Financial Reporting Standard 102 applicable to the UK and Companies Act 2006.

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies (see below).

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 £.

Significant judgements and estimates
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities at the balance sheet date and the amounts reported for revenue and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.

The estimates and underlying assumptions are reviewed on an going 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.

Bad debt provision
A provision is made for debtor balances that are no longer recoverable. The assessment is performed by directors on a individual basis. The assessment included a number of factors including the directors knowledge of the customer and other information available.

Stock provision
A provision is made for obsolete and slow moving stock taking into account the expected net realisable value of the individuals items. The assessment is based on the length of the time the item is held within stock.

Revenue
Turnover comprises revenue recognised by the company in respect of goods supplied during the year exclusive of value added tax. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from sale of goods is recognised when significant risks and rewards of ownership of the goods have been passed to the buyer (usually on delivery of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transactions will flow to the entity and the costs incurred or to be incurred in respect of transaction can be measured reliably.

Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and accumulated impairment losses.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Office Equipment -15% on reducing balance
Computer Equipment - 33% on reducing balance

Northwood Paper Sales Limited (Registered number: 03598292)

Notes to the Financial Statements - continued
for the Year Ended 31 July 2023

2. ACCOUNTING POLICIES - continued

Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises all costs incurred in bringing each product to its present location and condition.

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.

Financial instruments
The company has chosen to adopt sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other debtors, cash and bank balances and intra-group balances, are initially recognised at transaction price, 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.

Such assets are subsequently carried at amortised cost using the effective interest method.

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

For financial assets measured at amortised costs, the impairment loss is measured as the difference between the asset's carrying amount and the present value of the estimated cash flow discounted at the asset's original effective interest rate.

(ii) Financial liabilities

Basic financial liabilities, including trade and other creditors, bank overdraft, intra-group balances and hire purchase contracts, are initially recognised at transaction price, unless the arrangementconstitutes afinancing transaction, where the debt instrument is measured at the present value of th e future receipts discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.


Derivative financial instruments
The company holds derivative financial instruments to manage its exposure to foreign exchange rate risk including forward currency contracts and currency swaps which are not basic financial instruments. On initial designation of the derivative as a hedging instrument, the company formally documents the relationship between the hedging instrument and hedged item, including the risk management objectives and strategy. The hedging instruments are expected to be effective in offsetting the changes in the fair value or cash flows of the respective hedged risk.

Taxation
Taxation for the year comprises current tax.

The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported on the income statement 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 substantially enacted by the reporting date.

Northwood Paper Sales Limited (Registered number: 03598292)

Notes to the Financial Statements - continued
for the Year Ended 31 July 2023

2. ACCOUNTING POLICIES - continued

Foreign currencies
The company's functional and presentational currency is Sterling and this is the currency of the primary economic environment in which the company operates.

Transactions and balances
Foreign currency transactions are translated into the functional currency at the rate of exchange determined by the forward exchange contract relating to each stock purchase agreement. These gains and losses from the translation of financial instruments denominated in foreign currencies are treated as part of cost of sales and not administrative expenses. This is a departure from FRS102; the directors consider that this method of accounting reflects more accurately the actual costs of purchases and that it is reasonable therefore to apply the ''true and fair'' override. There is no effect on overall profits.

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date.

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 the income statement.

Pension costs and other post-retirement benefits
The company operates defined contribution pension schemes. The assets of the schemes are held separately from those of the company in independently administered funds. The amount charged to the profit and loss account represents the contributions payable to the schemes in respect of the accounting period. Once the contributions have been paid the company has no further payment obligations.

Invoice discounting
The company discounts its trade debts. The accounting policy is to include a gross asset for trade debtors due within one year and to record the returnable element of the proceeds under creditors due within one year. Discount fees are charged to the profit and loss account when payable.

Going concern
At 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.

3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

31.7.23 31.7.22
£    £   
Sales of goods 116,202,700 109,847,427
Commission income 1,181,233 757,450
117,383,933 110,604,877

Northwood Paper Sales Limited (Registered number: 03598292)

Notes to the Financial Statements - continued
for the Year Ended 31 July 2023

3. TURNOVER - continued

An analysis of turnover by geographical market is given below:

31.7.23 31.7.22
£    £   
United Kingdom 104,768,295 105,702,117
Europe 12,612,735 4,874,447
Other Territories 2,903 28,313
117,383,933 110,604,877

4. EMPLOYEES AND DIRECTORS
31.7.23 31.7.22
£    £   
Wages and salaries 1,243,639 1,234,968
Social security costs 145,955 152,902
Other pension costs 224,064 197,900
1,613,658 1,585,770

The average number of employees during the year was as follows:
31.7.23 31.7.22

Administrative, clerical and sales 22 22
Directors 2 2
24 24

Wages and salaries include directors' remuneration.

5. DIRECTORS' EMOLUMENTS
31.7.23 31.7.22
£    £   
Directors' remuneration 47,540 29,115

No retirement benefits are accruing for any directors.

6. OPERATING PROFIT

The operating profit is stated after charging:

31.7.23 31.7.22
£    £   
Depreciation - owned assets 3,470 17,359
Foreign exchange differences 158,614 32,686

7. AUDITORS' REMUNERATION
31.7.23 31.7.22
£    £   
Fees payable to the company's auditors for the audit of the company's
financial statements

24,500

20,000

Northwood Paper Sales Limited (Registered number: 03598292)

Notes to the Financial Statements - continued
for the Year Ended 31 July 2023

7. AUDITORS' REMUNERATION - continued

Auditors' remuneration for non audit services provided in the year amounted to £5,500 (2022: £5,200).

8. INTEREST PAYABLE AND SIMILAR EXPENSES
31.7.23 31.7.22
£    £   
Other loan interest 643,978 223,032

9. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
31.7.23 31.7.22
£    £   
Current tax:
UK corporation tax 822,369 595,758
Tax on profit 822,369 595,758

UK corporation tax has been charged at 25% (2022 - 19%).

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

31.7.23 31.7.22
£    £   
Profit before tax 3,955,012 3,121,657
Profit multiplied by the standard rate of corporation tax in the UK of 25%
(2022 - 19%)

988,753

593,115

Effects of:
Expenses not deductible for tax purposes 233 926
Capital allowances in excess of depreciation (10,231 ) -
Depreciation in excess of capital allowances - 1,717
Change in tax rate (156,386 ) -
Total tax charge 822,369 595,758

Changes to the future UK corporation tax rates were substantively enacted as part of the Finance Bill 2021 on 24 May 2021. It makes provision for the rate of corporation tax in the UK to increase from 1 April 2023 from 19% to 25% where a company has taxable profits exceeding £250,000. Therefore, the tax rate of 25% has been used to measure deferred taxation, to the extent the related timing differences are expected to reverse in 2023 or later.

Northwood Paper Sales Limited (Registered number: 03598292)

Notes to the Financial Statements - continued
for the Year Ended 31 July 2023

10. DIVIDENDS

20232022
££

Ordinary A shares of £1 each764,654278,109
Ordinary B shares of £1 each783,058327,642
Ordinary C shares of £1 each29,19735,004
1,576,909640,755


11. TANGIBLE FIXED ASSETS
Office Computer
Equipment equipment Totals
£    £    £   
COST
At 1 August 2022 36,440 18,916 55,356
Additions - 31,232 31,232
At 31 July 2023 36,440 50,148 86,588
DEPRECIATION
At 1 August 2022 36,440 18,916 55,356
Charge for year - 3,470 3,470
At 31 July 2023 36,440 22,386 58,826
NET BOOK VALUE
At 31 July 2023 - 27,762 27,762
At 31 July 2022 - - -

12. STOCKS
31.7.23 31.7.22
£    £   
Finished goods 13,971,106 18,153,742

13. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.7.23 31.7.22
£    £   
Trade debtors 21,835,492 33,375,838
Loans to connected companies 3,400,000 2,000,000
Prepayments and accrued income 73,277 58,754
25,308,769 35,434,592

Northwood Paper Sales Limited (Registered number: 03598292)

Notes to the Financial Statements - continued
for the Year Ended 31 July 2023

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.7.23 31.7.22
£    £   
Bank loans and overdrafts (see note 16) 8,473,647 10,518,238
Other loans (see note 16) 2,630,677 2,690,511
Trade creditors 10,713,914 17,558,442
Taxation and social security 3,876,699 5,014,587
Other creditors 2,974,925 9,430,254
Accrued expenses 772,703 540,311
29,442,565 45,752,343

15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
31.7.23 31.7.22
£    £   
Other loans (see note 16) 1,974,877 1,205,554

Other loans amounting to £2,605,554 (2022 : £1,896,066) included in creditors falling due within one year and more than year is repayable by monthly instalments over the next five years. Interest is payable at a fixed rate of 5%.

Other loans include £2,000,000 (2022 : £2,000,000) which is unsecured, interest free and repayable on demand.

16. LOANS

An analysis of the maturity of loans is given below:

31.7.23 31.7.22
£    £   
Amounts falling due within one year or on demand:
Bank loans 8,473,647 10,518,238
Other loans 2,630,677 2,690,511
11,104,324 13,208,749

Amounts falling due between one and two years:
Other loans 662,841 378,574

Amounts falling due between two and five years:
Other loans 1,312,036 826,980

Northwood Paper Sales Limited (Registered number: 03598292)

Notes to the Financial Statements - continued
for the Year Ended 31 July 2023

17. SECURED DEBTS

The following secured debts are included within creditors:

31.7.23 31.7.22
£    £   
Bank loans 8,473,647 10,518,238
Invoice finance 2,600,879 9,430,254
Other loans 2,605,554 1,896,066
13,680,080 21,844,558

Bank loans and invoice discounting facilities are secured by a fixed and floating charge over all the current and future assets of the company.

18. CALLED UP SHARE CAPITAL

Alloted, issued and fully paid


Number:

Class:

Nominal
value:


31.7.23


31.7.22
£ £
255,051 A Ordinary £1 255,051 255,051
125,025 B Ordinary £1 125,025 125,025
120,024 C Ordinary £1 120,024 120,024
500,100 500,100

All shares have the right to dividends and distributions, and right to vote.

19. RESERVES
Retained
earnings
£   

At 1 August 2022 6,382,832
Profit for the year 3,132,643
Dividends (1,576,909 )
At 31 July 2023 7,938,566

20. PENSION COMMITMENTS

The company operates defined contribution pension schemes for the staff and directors. The assets of the schemes are held separately from that of the company in independently administered funds.

The pension cost charges represent contributions payable by the company to the funds and amounted to £285,216 (2022: £197,900). There were no pension contribution accrued at the balance sheet date.

Northwood Paper Sales Limited (Registered number: 03598292)

Notes to the Financial Statements - continued
for the Year Ended 31 July 2023

21. COMMITMENTS UNDER OPERATING LEASES

At 31 July 2023, the company had future minimum lease payments under non cancellable operating leases as follows:

20232022
£   £   
Other operating

Not later than 1 year32,19133,274
Later than 1 year and not later than 5 years39,99529,978
Total72,18663,252

22. OTHER FINANCIAL COMMITMENTS

At 31 July 2023, the company had the following commitments in foreign exchange contracts

20232022
£   £   
Forward to buy $8,273,1224,948,267
Forward to buy €1,880,9847,351,705
Swap to buy $2,756,2303,126,548
Swap to buy €897,8307,268,277

23. RELATED PARTY TRANSACTIONS

Dividends to directors
During the year, total dividends of £1,147,712 (2022: £605,751) were paid to the directors.
At 31 July 2023, £400,000 was declared but not paid to the directors.

Entities with control, joint control or significant influence over the entity
31.7.23 31.7.22
£    £   
Sales 67,731,905 39,344,751
Purchases 4,197,856 7,468,016
Rent paid 70,000 70,000
Trade debtors amounts due from related parties 12,646,412 12,349,556
Trade creditors amounts due to related parties 443,019 1,928,740

At 31 July 2023, the company had outstanding loans of £2,605,554 (2022: £1,896,066) from a related entity.
During the year, interest is charged at 5% and loan interest of £100,935 (2022: £67,173) was payable.

At 31 July 2023, the company had an outstanding loan of £2,000,000 (2022: £2,000,000) from the family of the directors. This loan is unsecured, interest free and repayable on demand.

At 31 July 2023, the company had outstanding loans of £3,400,000 (2022: £2,000,000) to related entities which are still outstanding at year end. These loans are unsecured, interest free and receivable on demand.

Balances for related entities are included in debtors and creditors where applicable.

24. ULTIMATE CONTROLLING PARTY

The controlling party is P Fecher.

Northwood Paper Sales Limited (Registered number: 03598292)

Notes to the Financial Statements - continued
for the Year Ended 31 July 2023

25. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
31.7.23 31.7.22
£    £   
Profit before taxation 3,955,012 3,121,657
Depreciation charges 3,470 17,358
Finance costs 643,978 223,032
Finance income (11,281 ) (1,909 )
4,591,179 3,360,138
Decrease/(increase) in stocks 4,182,636 (7,872,913 )
Decrease/(increase) in trade and other debtors 10,125,822 (17,000,572 )
(Decrease)/increase in trade and other creditors (16,576,277 ) 20,042,711
Cash generated from operations 2,323,360 (1,470,636 )

26. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 July 2023
31.7.23 1.8.22
£    £   
Cash and cash equivalents 548,471 252,495
Year ended 31 July 2022
31.7.22 1.8.21
£    £   
Cash and cash equivalents 252,495 433,437


27. ANALYSIS OF CHANGES IN NET DEBT

At 1.8.22 Cash flow At 31.7.23
£    £    £   
Net cash
Cash at bank and in hand 252,495 295,976 548,471
252,495 295,976 548,471
Debt
Debts falling due within 1 year (13,208,749 ) 2,104,425 (11,104,324 )
Debts falling due after 1 year (1,205,554 ) (769,323 ) (1,974,877 )
(14,414,303 ) 1,335,102 (13,079,201 )
Total (14,161,808 ) 1,631,078 (12,530,730 )