Company registration number 05859797 (England and Wales)
STAR TISSUE UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
STAR TISSUE UK LIMITED
COMPANY INFORMATION
Directors
Abid Ditta
Khalid Saifullah
Sajid Saifullah
Secretary
Muhammad Afzal
Company number
05859797
Registered office
Waterfall Street
Blackburn
Lancashire
BB2 2BN
Auditor
Pierce C A Limited
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
Business address
Waterfall Street
Blackburn
Lancashire
BB2 2BN
Bankers
HSBC Bank plc
60 Church Street
Blackburn
Lancashire
BB1 5AS
STAR TISSUE UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
STAR TISSUE UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -

The directors present the strategic report and financial statements for the year ended 30 September 2023.

Review of the business

Our principal trading activity has been the manufacture of hygiene paper products for the Away from Home (AFH) market which includes the food, leisure, hospitality, office, industry and medical sectors.

 

The company remains committed to becoming a market leader in the manufacture of sustainable 100% recycled products and has continued with its strategy of further investments to drive operational efficiencies, quality improvements and to improve staff welfare.

 

This has been another successful year for the company, achieving our targeted revenue growth of nearly 20% and tripling our sales overseas.

 

Our brands SIRIUS, ACTIVE, BLISS, KLEENALL and SOFTELLE continue to gain market share and represent 60% of our overall turnover.

 

We have continued to heavily invest on the site, as part of our Future Factory programme. All production lines have now been completely automated. We have also built a further extension to our production facility. A new advanced CCTV and access control system was installed in all buildings on site. The fire alarm system was upgraded and enhanced across the site.

 

This year we recycled 99.3% of all our waste sending only 0.7% to landfill and have introduced two new electric vehicles to our motor fleet.

 

New process innovations are being explored to further integrate our machines with our ERP system. Utilising IOT and AI, it is possible to gather much more data to help with maintenance and production planning.

 

Further machine upgrades are planned to improve machine output providing much needed additional capacity to meet new and existing customer requirements.

Business environment

Overall, our market share increased in the AFH sector, our wide range of products and diverse customer base enabled us to grow our customer base and increase our turnover by 19% this year to £50.6m.

The company does not operate in a high-risk sector and has a very diversified range of customers with no single customer representing more than 5% of total revenue. The directors plan to continue with the strategy which has led to the satisfactory results.

Strategic management

Our strategy is to continue to grow the business through strategic investments that will introduce new products to our product range enhancing our product offering and providing a one stop shop for our customers. In the coming year our investments will be focussed on sustainability, productivity, quality and people development.

 

We will continue to maintain and strengthen our balance sheet with a view to exploring bigger investment opportunities that will increase our bottom line and market share. The company has developed a strong relationship with its finance providers which has resulted in a generous working capital facility agreed at competitive borrowing rates to help fund continued growth.

 

The company has continued to recruit the best people that are able to grow and develop in a fast growing business where productivity and innovation drives improvements throughout the business.

Key performance indicators

The directors continue to measure the performance of the company by reference to market share, overall gross profit and net profitability which are monitored on a monthly basis. We are pleased to report that the business has demonstrated its resilience in this challenging climate by growing both turnover and profitability.

STAR TISSUE UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
Other information and explanations

The company is committed to becoming a sustainable net zero company by 2025. Our journey towards sustainability and decarbonisation is guided by a vision of environmental responsibility, building social value and community cohesion.

 

We have transformed our supply chain to prioritise sustainable products, ensuring minimal carbon emissions and a reduced impact on biodiversity. By closely working with suppliers who share our commitment to eco-friendly practices, we have optimised our sourcing processes to meet the highest sustainability standards.

 

By recognising the urgency of addressing climate change, we are actively transitioning towards using 100% renewable clean energy. This move not only aligns with our commitment to reducing our carbon footprint but also reflects our dedication to a cleaner and more sustainable future.

 

We understand that sustainability is an ongoing journey. We will continue to evaluate and enhance our sustainability initiatives, incorporating feedback from stakeholders, investing in new technologies and staying abreast of industry best practices.

 

The company is proud of the strides taken in our sustainability journey. By prioritising environmental stewardship, social responsibility and community engagement, we are shaping a future where our company is not only successful but also a force for positive change.

On behalf of the board

Khalid Saifullah
Director
15 December 2023
STAR TISSUE UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 30 September 2023.

Principal activities

The principal activity of the company continued to be that of the manufacture and distribution of quality hygiene paper products.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £6,500,000. The directors do not recommend payment of a final dividend.

Directors

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

Abid Ditta
Khalid Saifullah
Sajid Saifullah
Auditor

The auditor, Pierce C A Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

The greenhouse gas emissions and energy data for the year ended 30 September 2023 has been prepared in line with HM Government Environmental Reporting Guidelines dated March 2019 and have used publicly available conversion factors for company reporting.

 

The company’s energy consumption includes head office and production site electricity and gas, LPG and motor vehicle fuels for owned vehicles only.

2023
Energy consumption
kWh
Aggregate of energy consumption in the year
2,282,530
2023
Emissions of CO2 equivalent
metric tonnes
Scope 1 - direct emissions
- Gas combustion
1.60
- Fuel consumed for owned transport
137.60
139.20
Scope 2 - indirect emissions
- Electricity purchased
683.10
Total gross emissions
822.30
Intensity ratio
Tonnes CO2 per employee
6.18
STAR TISSUE UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 4 -
Measures taken to improve energy efficiency

The company has adopted a policy of using electric vehicles and fork lift trucks where possible aswell as recycling 99.3% of our waste in the year.

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.

STAR TISSUE UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 5 -
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
Khalid Saifullah
Director
15 December 2023
STAR TISSUE UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF STAR TISSUE UK LIMITED
- 6 -
Opinion

We have audited the financial statements of Star Tissue UK Limited (the 'company') for the year ended 30 September 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:

STAR TISSUE UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STAR TISSUE UK LIMITED
- 7 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

In identifying and assessing risks of material misstatement in respect of irregularities we considered the following:

We are also required to perform specific procedures to respond to the risk of management override.

As a result of our audit procedures we did not identify a material risk of fraud or other non-compliance with laws and regulations.

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.

STAR TISSUE UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STAR TISSUE UK LIMITED
- 8 -

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.

Paul Moulding (Senior Statutory Auditor)
For and on behalf of Pierce C A Limited
15 December 2023
Statutory Auditor
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
STAR TISSUE UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
50,642,413
42,608,722
Cost of sales
(38,630,986)
(33,582,923)
Gross profit
12,011,427
9,025,799
Administrative expenses
(5,690,467)
(4,161,051)
Other operating income
35,560
36,185
Operating profit
4
6,356,520
4,900,933
Interest payable and similar expenses
8
(135,294)
(58,008)
Profit before taxation
6,221,226
4,842,925
Tax on profit
9
(1,378,928)
(792,877)
Profit for the financial year
4,842,298
4,050,048

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

STAR TISSUE UK LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
4,851,716
4,898,606
Current assets
Stocks
13
3,967,657
7,669,336
Debtors
14
8,847,192
9,103,678
Cash at bank and in hand
3,488,552
1,792,010
16,303,401
18,565,024
Creditors: amounts falling due within one year
15
(9,169,440)
(9,480,050)
Net current assets
7,133,961
9,084,974
Total assets less current liabilities
11,985,677
13,983,580
Creditors: amounts falling due after more than one year
16
(1,688,748)
(2,031,825)
Provisions for liabilities
Deferred tax liability
19
1,018,978
1,016,102
(1,018,978)
(1,016,102)
Net assets
9,277,951
10,935,653
Capital and reserves
Called up share capital
22
100
100
Profit and loss reserves
9,277,851
10,935,553
Total equity
9,277,951
10,935,653
The financial statements were approved by the board of directors and authorised for issue on 15 December 2023 and are signed on its behalf by:
Khalid Saifullah
Director
Company registration number 05859797 (England and Wales)
STAR TISSUE UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2021
100
7,385,505
7,385,605
Year ended 30 September 2022:
Profit and total comprehensive income
-
4,050,048
4,050,048
Dividends
10
-
(500,000)
(500,000)
Balance at 30 September 2022
100
10,935,553
10,935,653
Year ended 30 September 2023:
Profit and total comprehensive income
-
4,842,298
4,842,298
Dividends
10
-
(6,500,000)
(6,500,000)
Balance at 30 September 2023
100
9,277,851
9,277,951
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 12 -
1
Accounting policies
Company information

Star Tissue UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Waterfall Street, Blackburn, Lancashire, BB2 2BN.

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. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Star Tissue Holdings Limited. These consolidated financial statements are available from its registered office, Waterfall Street, Blackburn, Lancashire BB2 2BN.

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.

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

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 15 years.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -

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:

Plant and equipment
7.5% straight line
Fixtures and fittings
15% straight line
Motor vehicles
20% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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.

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 at bank and in hand

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
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.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

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.

 

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.

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.

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.

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.

The company’s liability for tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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 the profit and loss account on a straight line basis.

1.15
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Grants received in respect of capital expenditure are amortised on a straight line basis at 7.5% per annum in line with the depreciation policy on the plant and machinery assets to which they relate.

1.16
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.

STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stocks provisions

Stocks provision assessments are considered to be a key accounting estimate for which management review the results of regular stock counts in determining the extent to which provisions should be made against slow-moving or obsolete stocks.

Debtor recoverability

Debtor recoverability is considered to be a key accounting estimate for which management continuously monitor customer debt recoveries through credit control procedures and make assessments regarding the extent to which bad debt provisions are considered necessary.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Manufacture and supply of quality hygiene paper products
50,642,413
42,608,722
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
47,643,372
41,604,391
Europe
2,999,041
1,004,331
50,642,413
42,608,722
2023
2022
£
£
Other significant revenue
Grants received
35,560
35,560
Covid-19 JRS monies receivable
-
625
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
258,634
(307,774)
Government grants
(35,560)
(36,185)
Depreciation of owned tangible fixed assets
326,089
269,553
Depreciation of tangible fixed assets held under finance leases
254,500
255,381
Cost of stocks recognised as an expense
35,635,475
30,680,559
Operating lease charges
929,596
488,958
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
10,500
7,500
For other services
All other non-audit services
19,180
12,907
6
Employees

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

2023
2022
Number
Number
Production, sales and marketing
130
136
Administration
3
3
Total
133
139

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,205,135
2,908,815
Social security costs
272,678
246,142
Pension costs
57,654
52,699
3,535,467
3,207,656
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 18 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
37,920
37,891

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
127,367
58,008
Other interest
7,927
-
0
135,294
58,008
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,336,227
804,224
Adjustments in respect of prior periods
39,825
(62,162)
Total current tax
1,376,052
742,062
Deferred tax
Origination and reversal of timing differences
29,327
50,815
Adjustment in respect of prior periods
(26,451)
-
0
Total deferred tax
2,876
50,815
Total tax charge
1,378,928
792,877
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 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
6,221,226
4,842,925
Expected tax charge based on the standard rate of corporation tax in the UK of 22.00% (2022: 19.00%)
1,368,670
920,156
Tax effect of expenses that are not deductible in determining taxable profit
13,607
232
Effect of change in corporation tax rate
4,017
12,195
Research and development tax credit
-
0
(55,338)
Under/(over) provided in prior years
39,825
(62,162)
Deferred tax adjustments in respect of prior years
(26,451)
-
0
Enhanced capital allowances claimed
(28,563)
(28,962)
Government grant income
7,823
6,756
Taxation charge for the year
1,378,928
792,877
10
Dividends
2023
2022
£
£
Interim paid
6,500,000
500,000
11
Intangible fixed assets
Goodwill
£
Cost
At 1 October 2022 and 30 September 2023
183,000
Amortisation and impairment
At 1 October 2022 and 30 September 2023
183,000
Carrying amount
At 30 September 2023
-
0
At 30 September 2022
-
0
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
12
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 October 2022
7,564,103
424,177
31,000
8,019,280
Additions
492,207
41,492
-
0
533,699
At 30 September 2023
8,056,310
465,669
31,000
8,552,979
Depreciation and impairment
At 1 October 2022
2,766,697
342,869
11,108
3,120,674
Depreciation charged in the year
551,131
23,258
6,200
580,589
At 30 September 2023
3,317,828
366,127
17,308
3,701,263
Carrying amount
At 30 September 2023
4,738,482
99,542
13,692
4,851,716
At 30 September 2022
4,797,406
81,308
19,892
4,898,606

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£
£
Plant and equipment
2,788,381
3,206,828
13
Stocks
2023
2022
£
£
Raw materials and consumables
2,585,354
5,835,091
Work in progress
16,694
32,571
Finished goods and goods for resale
1,365,609
1,801,674
3,967,657
7,669,336
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
8,390,030
8,144,587
Other debtors
136,722
717,382
Prepayments and accrued income
320,440
241,709
8,847,192
9,103,678
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 21 -
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
540,075
1,613,174
Obligations under finance leases
18
346,242
471,199
Trade creditors
5,114,460
6,526,070
Amounts owed to group undertakings
1,500,000
-
0
Corporation tax
653,405
409,391
Other taxation and social security
684,628
232,390
Other creditors
12,935
10,547
Accruals and deferred income
317,695
217,279
9,169,440
9,480,050
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
1,600,156
1,907,673
Government grants
20
88,592
124,152
1,688,748
2,031,825
17
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
540,075
1,613,174
Payable within one year
540,075
1,613,174

The company's bankers, HSBC Bank plc, hold as security fixed and floating charges over all of the company's assets, together with a cross guarantee over all borrowings of the company and its parent company, Star Tissue Holdings Limited.

 

The company also operates an invoice discounting facility with HSBC Invoice Finance (UK) Limited whereby working capital is provided under an agreement to purchase the company's eligible debts, against which fixed and floating charges have been granted over the company's assets.

STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 22 -
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
346,242
471,199
In two to five years
1,528,778
1,687,144
In over five years
71,378
220,529
1,946,398
2,378,872

Obligations under finance lease and hire purchase agreements are secured by fixed charges on the assets concerned.

19
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
1,018,978
1,016,102
2023
Movements in the year:
£
Liability at 1 October 2022
1,016,102
Charge to profit or loss
2,876
Liability at 30 September 2023
1,018,978
20
Government grants
2023
2022
£
£
Arising from government grants
88,592
124,152

Grants have been made available under the Regional Growth Fund to facilitate the acquisition of items of plant and machinery.

STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 23 -
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
57,654
52,699

The company operates defined contribution pension schemes for all qualifying employees. The assets of these schemes are held separately from those of the company in independently administered funds.

22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
'A' ordinary shares of £1 each
40
40
40
40
'B' ordinary shares of £1 each
25
25
25
25
'C' ordinary shares of £1 each
25
25
25
25
'D' ordinary shares of £1 each
10
10
10
10
100
100
100
100
23
Financial commitments, guarantees and contingent liabilities

The company has guaranteed the bank borrowings of its parent company, Star Tissue Holdings Limited. At the financial year end the borrowings of Star Tissue Holdings Limited amounted to £nil (2022 - £518,291).

24
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
821,157
806,829
Between two and five years
2,115,825
2,825,110
In over five years
-
0
43,800
2,936,982
3,675,739
25
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
-
124,000
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 24 -
26
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Other information

During the year the company rented premises owned by the personal pension scheme of the directors and connected persons, of which they are trustees. A commercial rent amounting to £346,000 (2022 - £150,000) was paid to this Scheme by the company.

27
Ultimate controlling party

The company's ultimate parent company is Star Tissue Holdings Limited, a company registered in England and Wales.

The company is ultimately controlled by the directors by virtue of their shareholdings in the ultimate parent company, Star Tissue Holdings Limited.

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