Company Registration No. 04989581 (England and Wales)
MIDLAND PAPER PRODUCTS LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
Star House
Star Hill
Rochester
Kent
ME1 1UX
MIDLAND PAPER PRODUCTS LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of financial position
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
MIDLAND PAPER PRODUCTS LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr P Fecher
Mr M Fecher
Mr A Fecher
Mr P King
Mr C Davies
Mr M Booth
Secretary
Mr P King
Company number
04989581
Registered office
Units D-F
Shaw Lane
Stoke Prior
Bromsgrove
B60 4EA
Auditor
TC Group
Star House
Star Hill
Rochester
Kent
ME1 1UX
MIDLAND PAPER PRODUCTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

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

 

Introduction

 

During the year under review, the Company’s principal trading activity has been the manufacture, conversion and distribution of disposable hygiene products for the Away from Home [AfH] market. Northwood Hygiene Products Ltd [NHP] is the ultimate holding company of Midland Paper Products [MPP]. MPP sells a similar range of products into the owner managed part of the AfH market. The Northwood AfH Group* operates 3 recycled per mills and 4 converting sites in the UK.

Fair review of the business

 

MPP has a low overhead cost base, which meant it was better able to deal with the challenges of the previous 3 years when the economy has been facing consecutive economic headwinds caused by covid lockdowns, energy crisis, Ukraine war, multiple interest rate hikes and general inflationary pressures. It was also well positioned to recover quickly and react to the return to more normal market conditions that started in the second half of 2022.

 

Although sales volumes in FY23 were flat versus FY22, the management team have been able to improve overall profitability through a focus on cost control and customer service. Average selling price per case increase by 12% but this had begun to decline in H2 as the effects of energy price inflation started to recede.

 

In 2023 MPPs turnover was £13.9m (2022 £13.7m). Gross profit has increased from £3.1m to £4.0m with the GP% of 28.6% being an improvement of 6.2%. Operating profit for the year finished at £1.9m (2022 £1.3m).

Principal risks and uncertainties

The Company does not operate in a high‑risk environment and the number and range of customers supplied ensures that there is not an over‑reliance on any specific customer, although the nature of commercial markets means that the business continually needs to focus on individual customer performance and profitability as customers seek maximum value from their partners. Supply chain risk is significantly reduced due to the relationship with associated group companies who are able to manufacture and supply much of the paper consumed by the business’ operations. The Group complies with all relevant environmental and industry legislation and this is facilitated through Northwood Hygiene Products Ltd continued membership of the CPI (Confederation of Paper Industries) and the CHSA – the Cleaning and Hygiene Supplier’s Association ‑ the industry body relevant to the supply of disposable paper products. Northwood is a signatory to the CHSA’s Soft Tissue Standard Scheme, which ensures that the product’s specification matches the product’s labelling and is seen as the industry benchmark when it comes to distributor and end user product confidence. The company continues to hold ISO 9001 registration.

 

Credit risk is mitigated by strict application of our credit policy and regular review of accounts that are perceived as higher risk. The company has a credit insurance policy in place to minimise the impact of any bad debt experiences.

 

The Company sources some finished goods and raw materials from overseas suppliers and reviews the currency risk on a continual basis taking out hedge contracts where appropriate.

MIDLAND PAPER PRODUCTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Key performance indicators

On behalf of the board

Mr P King
Director
7 September 2024
MIDLAND PAPER PRODUCTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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

Results and dividends

The results for the year are set out on .

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

Mr P Fecher
Mr M Fecher
Mr A Fecher
Mr P King
Mr C Davies
Mr M Booth
Auditor

TC Group were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006.

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.

MIDLAND PAPER PRODUCTS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 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
Mr P King
Director
7 September 2024
MIDLAND PAPER PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MIDLAND PAPER PRODUCTS LIMITED
- 6 -
Opinion

We have audited the financial statements of Midland Paper Products Limited (the 'company') for the year ended 31 December 2023 which comprise , the statement of financial position, 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.

MIDLAND PAPER PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MIDLAND PAPER PRODUCTS LIMITED
- 7 -

Opinions on other matters prescribed by the Companies Act 2006

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

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.

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

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

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

 

MIDLAND PAPER PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MIDLAND PAPER PRODUCTS LIMITED
- 8 -

Our approach was as follows:

 

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.

MIDLAND PAPER PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MIDLAND PAPER PRODUCTS LIMITED
- 9 -

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.

Sally Meah FCCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
Star House
Star Hill
Rochester
Kent
ME1 1UX
MIDLAND PAPER PRODUCTS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
276,520
284,596
Current assets
Stocks
11
587,224
837,558
Debtors
12
7,907,159
7,407,537
Cash at bank and in hand
126,675
67,330
8,621,058
8,312,425
Creditors: amounts falling due within one year
13
(2,729,990)
(4,064,577)
Net current assets
5,891,068
4,247,848
Net assets
6,167,588
4,532,444
Capital and reserves
Called up share capital
16
8,360
8,360
Capital redemption reserve
3,250
3,250
Profit and loss reserves
6,155,978
4,520,834
Total equity
6,167,588
4,532,444

The notes on pages 12 to 24 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 7 September 2024 and are signed on its behalf by:
Mr C Davies
Director
Company registration number 04989581 (England and Wales)
MIDLAND PAPER PRODUCTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
21
924,785
(37,393)
Interest paid
(88,565)
(49,068)
Net cash inflow/(outflow) from operating activities
836,220
(86,461)
Investing activities
Purchase of tangible fixed assets
(36,688)
(11,425)
Proceeds from disposal of tangible fixed assets
1,500
-
0
Interest received
23
-
0
Net cash used in investing activities
(35,165)
(11,425)
Financing activities
Repayment of borrowings
(741,711)
74,718
Net cash (used in)/generated from financing activities
(741,711)
74,718
Net increase/(decrease) in cash and cash equivalents
59,344
(23,168)
Cash and cash equivalents at beginning of year
67,330
90,498
Cash and cash equivalents at end of year
126,675
67,330

The notes on pages 12 to 24 form part of these financial statements.

MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Midland Paper Products Limited is a private company limited by shares incorporated in England and Wales. The registered office is Units D-F, Shaw Lane, Stoke Prior, Bromsgrove, B60 4EA.

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.

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:

Plant and equipment
3 - 10 years straight line
Fixtures and fittings
3 years straight line
Office equipment
3 years straight line
MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

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.

1.5
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.

1.6
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.

1.7
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 statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

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

Other financial assets

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

MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 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.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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.

MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

1.8
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.

1.9
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 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 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 income statement, 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.

MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.10
Retirement benefits

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

1.11
Leases

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.

1.12
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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Leases

Management exercises judgement in determining the classification of leases as finance or operating leases at the inception of the lease. Management considers the likelihood of exercising the break clauses or extension options in determining the lease term. Where the lease term constitutes substantially all the economic life of the asset, or where the present value of minimum lease payments amount to substantially all of the fair value of the property, the lease is classified as a finance lease. All other leases are classified as operating leases.

MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
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.

Depreciation of Property, plant and equipment

Depreciation is provided so as to write down the assets to their residual values over their estimated useful lives. The selection of these residual values and estimated lives requires the exercise of management judgement.

Impairment of assets

Where there are indicators of impairment, management performs and impairment test. Recoverable amounts for cash-generating units are the higher of fair value less costs of disposal, and value in use.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
UK
13,863,172
13,656,982
2023
2022
£
£
Other revenue
Interest income
23
-
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional costs
-
21,513
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
15,876
10,500
MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
6
Employees

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

2023
2022
Number
Number
Employees
39
38
2023
2022
£
£
Wages and salaries
1,012,779
895,580
Social security costs
81,820
71,703
Pension costs
29,373
25,860
1,123,972
993,143
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
104,800
103,402
Company pension contributions to defined contribution schemes
5,792
11,169
110,592
114,571

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
88,565
49,068
MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
198,632
-
0

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
1,833,776
1,180,115
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
458,444
224,222
Tax effect of expenses that are not deductible in determining taxable profit
(22,701)
13,641
Effect of change in corporation tax rate
(12,493)
-
0
Group relief
(211,126)
(230,461)
Permanent capital allowances in excess of depreciation
(13,492)
(7,402)
Taxation charge for the year
198,632
-
MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Office equipment
Total
£
£
£
£
Cost
At 1 January 2023
1,506,854
32,324
5,144
1,544,322
Additions
24,063
150
12,475
36,688
Disposals
(16,018)
-
0
-
0
(16,018)
At 31 December 2023
1,514,899
32,474
17,619
1,564,992
Depreciation and impairment
At 1 January 2023
1,233,293
22,490
3,943
1,259,726
Depreciation charged in the year
40,601
3,380
783
44,764
Eliminated in respect of disposals
(16,018)
-
0
-
0
(16,018)
At 31 December 2023
1,257,876
25,870
4,726
1,288,472
Carrying amount
At 31 December 2023
257,023
6,604
12,893
276,520
At 31 December 2022
273,561
9,834
1,201
284,596
11
Stocks
2023
2022
£
£
Finished goods and goods for resale
587,224
837,558
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,111,534
2,106,340
Amounts owed by group undertakings
428,384
902,441
Other debtors
5,269,083
4,100,350
Prepayments and accrued income
98,158
298,406
7,907,159
7,407,537
MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Other borrowings
14
1,112,897
1,854,608
Trade creditors
559,985
1,075,471
Amounts owed to group undertakings
231,975
231,975
Corporation tax
198,632
-
0
Other taxation and social security
360,229
574,634
Other creditors
9,003
103,081
Accruals and deferred income
257,269
224,808
2,729,990
4,064,577

 

14
Loans and overdrafts
2023
2022
£
£
Other loans
1,112,897
1,854,608
Payable within one year
1,112,897
1,854,608

RBS Invoice Finance Limited hold a fixed and floating charge dated 27 May 2020 over the company's property and undertakings. The charge contains a negative pledge

 

RBS Invoice Finance Limited hold a fixed and floating charge dated 27 May 2020 over the company's property and undertakings. The charge contains a negative pledge

 

RBS Invoice Finance Limited hold a fixed and floating charge dated 25 March 2009 over the company's property and undertakings. The charge contains a negative pledge

15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
29,373
25,860

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.

MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £10 each
836
836
8,360
8,360
17
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
194,625
194,625
Between two and five years
821,750
583,875
In over five years
865,000
1,297,500
1,881,375
2,076,000
MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
18
Related party transactions

During the year under review, the following transactions took place with entities over which the entity has significant influence over;

 

Sales of goods and other recharges totalling £1,141,748 (2022 - £280,491);

The balance due at the year end is £209,246 (2022 - £54,419) and is included in trade debtors.

Costs of purchases and other recharges totalling £5,539,257 (2022 - £6,406,011);

The balance due at the year end is £310,607 (2022 - £701,133) and is included in trade creditors.

Rent of £0 (2022 - £0) was paid.

Loans of £1,166,997 (2022 - £1,040,000) were made;

Repayments of £474,058 (2022 - £55,000) were received;

 

As at 31 December 2023 £5,463,405 (2022 - £4,770,466) was due from the entities.

 

 

19
Ultimate controlling party

The controlling party is Northwood Hygiene Products Limited, the registered office address is Northwood House, Stafford Park 10, Telford, Shropshire, TF3 3AB.

20
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
67,330
59,345
126,675
Borrowings excluding overdrafts
(1,854,608)
741,711
(1,112,897)
(1,787,278)
801,056
(986,222)
MIDLAND PAPER PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED
31 DECEMBER 2023
31 December 2023
- 24 -
21
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
1,635,144
1,180,115
Adjustments for:
Taxation charged
198,632
-
0
Finance costs
88,565
49,068
Investment income
(23)
-
0
Gain on disposal of tangible fixed assets
(1,500)
-
Depreciation and impairment of tangible fixed assets
44,764
46,595
Movements in working capital:
Decrease/(increase) in stocks
250,334
(310,678)
Increase in debtors
(499,622)
(1,530,285)
(Decrease)/increase in creditors
(791,508)
527,792
Cash generated from/(absorbed by) operations
924,786
(37,393)
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