Company registration number SC177774 (Scotland)
Sappi Rockwell Solutions Limited
Annual report and financial statements
for the year ended 30 September 2024
Sappi Rockwell Solutions Limited
Company information
Directors
SJ Blyth
S Wurdinger
Secretary
Burness Paul LLP
Company number
SC177774
Registered office
50 Lothian Road
Festival Square
Edinburgh
EH3 9WJ
Auditor
Henderson Loggie LLP
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
Bankers
HSBC Bank plc
25 - 29 Murraygate
Dundee
DD1 2EE
Solicitors
Burness Paull LLP
50 Lothian Road
Festival Square
Edinburgh
EH3 9WJ
Sappi Rockwell Solutions Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
Sappi Rockwell Solutions Limited
Strategic report
for the year ended 30 September 2024
- 1 -

The directors present the strategic report for the year ended 30 September 2024.

 

Introduction

The company’s principal activity is the manufacture of heat sealable lidding films with barrier properties for application to a wide range of food packaging trays for domestic and export markets.

Fair review of business, development and performance

The results for the year to 30 September 2024 show a loss before tax of £1.40m against a loss of £2.54m in the previous year to 30 September 2023. These figures were generated on turnover of £12.26m and £12.94m respectively. The production process for Sappi Rockwell is energy-intensive, and the ongoing impact of inflation on the UK economy coupled with the significant volatility in the cost of energy has had a negative impact on the business. The impact of Brexit and the introduction of plastic packaging tax has also lead to increased production costs.

 

The business has tried, where possible, to try and pass on these cost increases to customers, in order to maintain margins, but this has not always been possible and has had an adverse impact on the business's profitability. In September 2023 the company had a restructure to streamline its operations. This resulted in fixed cost savings in 2024.

Principal risks and uncertainties

The key risks have been identified in the business are;

 

Changes in consumer demand and food consumption as a result of the rising cost of living, people being more health conscious and consistent drive to lower plastic packaging usage, means there is a potential risk to the demand for the products Sappi Rockwell traditionally manufacture. Having recognised this risk, management continue to work closely with customers to identify changes in consumer behaviour and leverage opportunities to reduce their overall usage of plastics by continuing to develop alternative more environmentally friendly solutions.

 

Historically the business relied on a number of key accounts to deliver a significant proportion of its turnover. Management and the sales force continue to try and mitigate this risk through the onboarding of new customers aided by the development of a more diverse (and environmentally friendly) product range as noted above.

 

The market in which Sappi Rockwell operates is specialised and a key component to the businesses future success is the retention and upskilling of new and existing staff. Management continue to mitigate this risk through ongoing interaction with staff to identify skills gaps and development opportunities to ensure maximum job staff engagement and keep staff retention at optimum levels.

 

In a digital world where IT systems play an ever more important role, the management recognise the risk of a breach to these systems. In additional to focussing on local systems, management continue to interact with the wider Sappi Group to ensure the IT infrastructure is a robust and secure as it can be.

Future developments

There is ongoing pressure on the use of plastic materials and this may create more obstacles in the future as well as opportunities. Management feel that local expertise in films and coatings, coupled with Sappi’s expertise in fibre based innovation, provides a good platform to respond to potential changes in the market.

 

Directors and management are satisfied the company is well equipped to grow and gain from the investments made in the organisation, assets and product development.

 

Sappi Rockwell Solutions Limited
Strategic report (continued)
for the year ended 30 September 2024
- 2 -
Key performance indicators

The Directors consider the key performance indicators to be those measuring the financial performance of the company overall which are turnover, gross margin and net profit. In addition, to ensure a high level of operational performance is maintained, there are other measures and indicators covering safety, quality delivery and cost that are also monitored closely on a regular basis.

 

 

KPI’s

 

Measure

 

2024

 

2023

 

 

 

 

Turnover

£

£12.26m

£12.94m

 

 

 

 

Gross Profit

%

48.0%

40.3%

 

 

 

 

Current ratio

1 to 1

0.52:1

0.67:1

 

 

 

 

Net assets

£

£1.75m

£3.16m

 

 

 

 

On behalf of the board

SJ Blyth
Director
24 January 2025
Sappi Rockwell Solutions Limited
Directors' report
for the year ended 30 September 2024
- 3 -

The directors present their annual report and financial statements for the year ended 30 September 2024.

Principal activities

The company's principal activity is the manufacture and sale of high quality flexible packaging materials and primarily lidding films for food applications.

Results and dividends

The results for the year are set out on page 8.

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:

SJ Blyth
S Wurdinger
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.

Strategic report

Included within the strategic report is an indication of the principal risks and uncertainties including the risks associated with the market conditions, competition, foreign currency risk, and legislative and compliance risks.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
SJ Blyth
Director
24 January 2025
Sappi Rockwell Solutions Limited
Directors' responsibilities statement
for the year ended 30 September 2024
- 4 -

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.

Sappi Rockwell Solutions Limited
Independent auditor's report
to the members of Sappi Rockwell Solutions Limited
- 5 -
Opinion

We have audited the financial statements of Sappi Rockwell Solutions Limited (the 'company') for the year ended 30 September 2024 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.

Sappi Rockwell Solutions Limited
Independent auditor's report
to the members of Sappi Rockwell Solutions Limited (continued)
- 6 -

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 and the directors' report.

 

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:

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. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below.

 

As part of our planning process:

Sappi Rockwell Solutions Limited
Independent auditor's report
to the members of Sappi Rockwell Solutions Limited (continued)
- 7 -

 

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.

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.

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.

Blair Davidson
Senior Statutory Auditor
For and on behalf of Henderson Loggie LLP
24 January 2025
Chartered Accountants
Statutory Auditor
The Vision Building
20 Greenmarket
Dundee
DD1 4QB
Sappi Rockwell Solutions Limited
Statement of comprehensive income
for the year ended 30 September 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
12,259,326
12,941,542
Cost of sales
(6,379,381)
(7,736,511)
Gross profit
5,879,945
5,205,031
Administrative expenses
(6,923,452)
(7,525,358)
Other operating income
3
116,707
131,700
Operating loss
4
(926,800)
(2,188,627)
Interest receivable and similar income
6
934
321
Interest payable and similar expenses
7
(475,907)
(355,457)
Loss before taxation
(1,401,773)
(2,543,763)
Tax on loss
8
-
0
-
0
Loss for the financial year
(1,401,773)
(2,543,763)

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

Sappi Rockwell Solutions Limited
Balance sheet
as at 30 September 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
5,402,224
5,075,235
Current assets
Stocks
11
2,706,723
2,848,955
Debtors
12
541,390
274,973
Cash at bank and in hand
536,886
146,921
3,784,999
3,270,849
Creditors: amounts falling due within one year
13
(7,220,889)
(4,851,514)
Net current liabilities
(3,435,890)
(1,580,665)
Total assets less current liabilities
1,966,334
3,494,570
Creditors: amounts falling due after more than one year
14
(214,108)
(330,815)
Net assets
1,752,226
3,163,755
Capital and reserves
Called up share capital
18
50,000
50,000
Equity reserve
19
(9,756)
-
0
Other reserves
20
8,000,000
8,000,000
Profit and loss reserves
21
(6,288,018)
(4,886,245)
Total equity
1,752,226
3,163,755

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 24 January 2025 and are signed on its behalf by:
SJ Blyth
Director
Company registration number SC177774 (Scotland)
Sappi Rockwell Solutions Limited
Statement of changes in equity
for the year ended 30 September 2024
- 10 -
Share capital
Equity reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 October 2022
50,000
-
0
8,000,000
(2,342,482)
5,707,518
Year ended 30 September 2023:
Loss and total comprehensive income
-
-
-
(2,543,763)
(2,543,763)
Balance at 30 September 2023
50,000
-
0
8,000,000
(4,886,245)
3,163,755
Year ended 30 September 2024:
Loss and total comprehensive income
-
-
-
(1,401,773)
(1,401,773)
Credit to equity for equity settled share-based payments
17
-
-
-
(9,756)
(9,756)
Other movements
-
(9,756)
-
9,756
-
Balance at 30 September 2024
50,000
(9,756)
8,000,000
(6,288,018)
1,752,226
Sappi Rockwell Solutions Limited
Notes to the financial statements
for the year ended 30 September 2024
- 11 -
1
Accounting policies
Company information

Sappi Rockwell Solutions Limited is a private company limited by shares incorporated in Scotland. The registered office is 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ. The company's place of business is Brunel Road, Wester Gourdie Industrial Estate, Dundee, DD2 4TG.

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 Sappi Limited. These consolidated financial statements are available from its registered office, 108 Oxford Road, Houghton Estate, Johannesburg, South Africa, 2198.

1.2
Going concern

At the period end, the company had a net asset position of £1,752,226 (2023 - £3,163,755). Included within creditors are amounts due to fellow group members of £4,929,584 (2023 - £3,370,904). The company continues to meet its working capital commitments from ongoing trading activities whilst it receives ongoing financial support from the Sappi group including its parent company when required.true

 

The financial statements have therefore been prepared on a going concern basis. The directors have considered relevant information, including the financial projections, forecast future cash flows and the impact of subsequent events in making their assessment. The directors have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios arising from rising input costs and the economic conditions in the UK. This analysis also considers the effectiveness of available measures to assist in mitigating the impact.

Based on these assessments and having regard to the resources available to the company, including the ongoing financial support of the group, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.

Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 12 -
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
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost or value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Development Costs
20% straight line
1.6
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:

Land and buildings
2% - 10% straight line basis
Plant and equipment
4% - 33% straight line basis
Motor vehicles
30% straight line basis

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.

Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 13 -
1.7
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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.8
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.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

1.10
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

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

Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 14 -
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.

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, and loans from fellow group, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

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

Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 15 -
1.11
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.

1.12
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. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.13
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.

1.14
Retirement benefits

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

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.

 

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
1
Accounting policies (continued)
- 16 -
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.

Critical judgements

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

Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect the current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

Stock provision

Stock is valued at the lower of cost and net realisable value. Management write down obsolete and damaged stock items throughout the year but in addition, at the year end, they consider whether the stock value is appropriate and where required apply a stock provision to bring the value down to net realisable value in line with accounting standards. The provision is calculated by management based on their knowledge of the market they sell to and their products.

Accruals

Management estimates accruals using post year end information and information available from detailed budgets. This identifies costs and income that are expected to be incurred or received for goods/services provided by and to other parties. Accruals are only released when there is a reasonable expectation that these costs will not be invoiced in the future.

Deferred grant income

The company has received capital grants in the past to assist with the acquisition of fixed assets. As part of this decisions have been taken by management about the period over which to release these grants. This has generally been in keeping the with the rate of depreciation for the asset concerned and as eluded to above requires a degree of judgement in assessing the useful life of these assets.

Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
- 17 -
3
Turnover and other revenue

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

2024
2023
£
£
Turnover analysed by class of business
Principal activity
12,259,326
12,941,542
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
6,024,443
5,470,325
Europe
3,319,935
4,105,469
USA
405,501
555,187
Rest of the World
2,509,447
2,810,561
12,259,326
12,941,542
2024
2023
£
£
Other revenue
Interest income
934
321
Grants received
116,707
131,700
4
Operating loss
2024
2023
Operating loss for the year is stated after charging:
£
£
Exchange losses
13,980
30,365
Research and development costs
51,276
27,914
Fees payable to the company's auditor for the audit of the company's financial statements
18,450
17,600
Depreciation of owned tangible fixed assets
696,300
765,644
Loss on disposal of tangible fixed assets
10,470
1,000
Share-based payments
5,384
-
Operating lease charges
15,861
22,442
Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
- 18 -
5
Employees

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

2024
2023
Number
Number
Production
53
65
Administration
16
18
Total
69
83

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
2,596,178
2,854,335
Social security costs
272,135
288,212
Pension costs
70,576
63,648
2,938,889
3,206,195
Redundancy payments made or committed
14,182
206,429
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
934
321
7
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
249,709
160,065
Interest on invoice finance arrangements
226,198
195,392
475,907
355,457
Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
- 19 -
8
Taxation
2024
2023
£
£
Deferred tax
Origination and reversal of timing differences
(8,525)
(1,279)
Adjustment in respect of prior periods
8,525
1,279
Total deferred tax
-
0
-
0

At the Spring Budget 2021, the government announced that the corporation tax main rate for profits would increase to 25%. Following Royal Assent this was enacted from 1 April 2023 and as a result the corporation tax rate effective in the period has been set at 25% (2023 - 22%).

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Loss before taxation
(1,401,773)
(2,543,763)
Expected tax credit based on the standard rate of corporation tax in the UK of 25% (2023: 22%)
(350,443)
(559,628)
Tax effect of expenses that are not deductible in determining taxable profit
123
109
Permanent capital allowances in excess of depreciation
(891)
(784)
Depreciation on assets not qualifying for tax allowances
6,039
5,314
Taxable losses not recognised
345,172
556,341
Super-deduction expenditure adjustment
-
0
(1,352)
Taxation charge for the year
-
-

On the basis of taxable losses carried forward at the year end of £12,698,333 (2023 - £10,682,908) and a lack of clarity as to when these losses will be utilised going forward, a deferred tax asset has not been recognised on the portion of these losses amounting to £8,743,296 (2023 - £7,396,709) which exceed the amount required to offset deferred tax liabilities at 30 September 2024. Were an asset recognised it would likely be at the future rate of 25% and would amount to £2,185,824 (2023 - £1,849,177).

Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
- 20 -
9
Intangible fixed assets
Development Costs
£
Cost
At 1 October 2023 and 30 September 2024
152,106
Amortisation and impairment
At 1 October 2023 and 30 September 2024
152,106
Carrying amount
At 30 September 2024
-
0
At 30 September 2023
-
0
10
Tangible fixed assets
Land and buildings
Assets under construction
Plant and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 October 2023
1,460,844
-
0
12,759,029
8,622
14,228,495
Additions
335,164
511,547
187,050
-
0
1,033,761
Disposals
(5,985)
-
0
(101,866)
-
0
(107,851)
At 30 September 2024
1,790,023
511,547
12,844,213
8,622
15,154,405
Depreciation and impairment
At 1 October 2023
662,802
-
0
8,483,140
7,319
9,153,261
Depreciation charged in the year
73,138
-
0
622,751
411
696,300
Eliminated in respect of disposals
(4,267)
-
0
(93,113)
-
0
(97,380)
At 30 September 2024
731,673
-
0
9,012,778
7,730
9,752,181
Carrying amount
At 30 September 2024
1,058,350
511,547
3,831,435
892
5,402,224
At 30 September 2023
798,042
-
0
4,275,890
1,303
5,075,235
11
Stocks
2024
2023
£
£
Raw materials and consumables
1,505,378
1,647,388
Work in progress
608,470
669,626
Finished goods and goods for resale
592,875
531,941
2,706,723
2,848,955
Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
- 21 -
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
259,199
113,326
Other debtors
191,010
68,640
Prepayments and accrued income
91,181
93,007
541,390
274,973
13
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
1,431,272
810,465
Amounts owed to group undertakings
4,929,584
3,370,904
Corporation tax
-
0
10,834
Other taxation and social security
81,823
108,604
Other creditors
223,934
935
Accruals and deferred income
554,276
549,772
7,220,889
4,851,514
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Government grants
15
214,108
330,815
15
Government grants
2024
2023
£
£
Arising from government grants
214,108
330,815

A grant of £1,117,000 was received in 2016 for development of a new machine and building works at the Brunel Road premises. This is being released in line with depreciation at a rate of 10% per annum

 

A grant of £100,000 was received in 2018 in relation to the development of a MRP system. This was being released in line with depreciation at a rate of 20% per annum and has been fully released during this financial period.

Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
- 22 -
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
70,576
63,648

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.

17
Share-based payment transactions

Certain employees of the company along with other group employees were granted options over shares in the ultimate holding company Sappi Limited which is listed on the South African stock exchange. The options had no exercise price and were granted to the employees free of charge and were based on a number of performance measures relative to the Sappi Limited peer group. The share options were exercisable 4 years after the date of the grant with employees being required to remain in employment within the group for that period or the options may be forfeited.

 

The company recognises equity-settled share based payment expenses based on a reasonable allocation of the total for the group. This allocation is the total charge for the group pro-rated for the number of shares attributable to employees in each company.

 

During the year, the company recognised total share-based payment expenses of £5,384 (2023 - £nil) which related to equity settled share based payment transactions.

Number of share options
Weighted average exercise price
2024
2023
2024
2023
Number
Number
£
£
Outstanding at 1 October 2023
-
0
-
0
-
0
-
0
Granted
5,100
-
0
-
0
-
0
Outstanding at 30 September 2024
5,100
-
0
-
0
-
0
Exercisable at 30 September 2024
-
0
-
0
-
0
-
0
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50,000
50,000

Each ordinary share carries one vote and is entitled to participate pari passu with ordinary shares in any dividend or capital distribution.

Sappi Rockwell Solutions Limited
Notes to the financial statements (continued)
for the year ended 30 September 2024
- 23 -
19
Equity reserve

Equity reserves include all current and prior years movements on the share-based payment transactions as described in note 17.

20
Other Reserves

Other reserves relate to the capital contribution from the parent company in excess of the share capital described in note 18. These reserves are non-distributable.

21
Profit and loss reserves

Profit and loss reserves include all current and prior years retained profit and losses.

22
Operating lease commitments

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:

2024
2023
£
£
Within one year
26,863
11,470
Between two and five years
72,081
4,384
98,944
15,854
23
Ultimate controlling party

The company is controlled by its parent company Sappi Germany GmbH. The ultimate parent company of Sappi Rockwell Solutions Limited is Sappi Limited, and its registered office is 108 Oxford Road, Houghton Estate, Johannesburg, South Africa, 2198.

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