The directors present the strategic report for the year ended 31 December 2024.

Introduction

During the year under review, the Group’s principal trading activity has been the manufacture, conversion and distribution of disposable hygiene products for the Away from Home [AfH] market. The Group remains committed to its plan of product enhancement, environmental sustainability, strategic acquisition and integration of business units in order to drive operational efficiency at its manufacturing sites. The Northwood AfH Group* operates 3 recycled per mills and 4 converting sites in the UK.

Northwood Hygiene Products Ltd [NHP] continues to promote and enhance its own brands of ‘Whisper’, ‘Leonardo’, ‘Essentials’, ‘North Shore’, ‘Raphael’ and ‘Optimum’ together with providing private label products to the AfH market.

During 2024 NHP took over the responsibility for the customers of Northwood Consumer Ltd under a 3-Year commission arrangement as part of the wider strategy to target the Trade Sector. This includes the brands ‘Freedom’, ‘Hush’ and ‘Rhino’, which continued to be manufactured at the Birmingham site.

The gradual softening of selling prices that had started towards the end of FY23 continued into FY24 with the average down by ~8% from the previous year end. This has coincided with tough market conditions and inflationary pressures for the majority of input costs and hence the squeeze on margins. NHP continues to target growth opportunities in the AfH market and has seen sales volumes increase by 4% in FY24 with own made products up 3%.

In 2024 NHP’s turnover was £164.2m (2023 £177.7m). Gross profit has decreased from £30.7m to £22.5m with the GP% of 13.7% down by 3.6% from last year because of the conditions outlined above. The net result was an operating profit of £7.3m (2023 £15.6m). The figures reported are for the NHP consolidated group including Midland Paper Products Ltd and Connect Hygiene Products Ltd.

The Group continues to focus on operational efficiency, investment in training and equipment to improve capacities and outputs, and product quality at the same time as providing customers with value for money in the highly competitive AfH sector.

The Group 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 Group 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.

The Directors', in line with their duties under s172 of the Companies Act 2006, act individually and collectively in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its shareholders. In doing this the Directors must have regard, amongst other matters to the following;

o    Likely consequences of any decision in the long term

o    Interests of the company’s employees

o    Need to foster the company’s relationships with suppliers, customers and others

o    Impact of the company’s operations on the community and the environment

o    Desirability of the company maintaining a reputation for high standards of business conduct

o    Need to act fairly as between members of the company

Northwood Hygiene Products Ltd is a private family owned company where the Directors are an integral part of its day to day management. The Directors regard these matters as embedded in the decision-making process through the Company’s business strategy, culture, core values and management information flows.

Decision Making

The Directors strategy is to build a quality business both organically and through acquisition whilst promoting and enhancing the Company’s core brands. Whilst doing this we aim to maintain and strengthen the balance sheet, especially maintaining sufficient cash headroom to retain operational flexibility. The Directors will take the course of action that best delivers the long-term strategy but are not required to balance the Company’s interests with those of other stakeholders.

Employees

The Directors recognise that the success of our business depends on attracting, retaining and motivating employees. The means ensuring that we are a responsible employer and is fair in respect of pay and benefits as well as adopting appropriate policies on equal opportunities and modern slavery.

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

The health & safety of employees is extremely important with a “Zero Harm by Choice” principle and encouragement of near miss reporting. All employees are regularly updated on health & safety targets with focus on specific topics of the month via the Safety Hub.

Our employee appraisal programme encourages employee feedback and facilitates the opportunity for both employees and managers to set performance goals on an annual basis.

The company’s continuous improvement programme also allows staff to work towards a range of vocational qualifications including NVQ’s, CIPD, CIMA and CIPS together with apprenticeships.

Suppliers, Customers and Others

The Directors believe in lasting partnerships, founded on a shared commitment to quality, value and service. The company has fostered close relationships with customers, suppliers and various trade bodies over many years which help us create a class leading supply chain. The company is committed to paying its suppliers to agreed terms and expects the same from customers.

Community and the Environment

The company takes a sustainable approach to all aspects of its business from sourcing around 60,000 tonnes of recycled parent reels to purchasing from FSC accredited supply sources and carrying the EU Ecolabel certificate on the North Shore range. Additionally, all waste-paper generated in the manufacturing process is recycled back into the supply chain through associated company Northwood Recycling.

Northwood’s comprehensive Corporate Social and Environmental Responsibility (CSER) strategy has seen it give employees the opportunity to support many deserving charitable causes.

Business Conduct

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

Act Fairly as Between Members of the Company

The company is privately owned with the shareholders actively involved in the decision-making process on a day to day basis. The company is also part of an integrated supply chain for AfH products through several associated companies linked by common ownership. The Directors will have regard to the impact of their decisions upon all stakeholders but particularly the associated companies.

Principal Decisions Made in the Year

• Accredited as a living wage employer by The Living Wage Foundation across all Northwood companies

• Made additional financial support payments to all employees to assist with cost of living crisis over the Christmas period

• Publication of the company's first Environmental Responsibility Report following on from creating the dedicated ESG role last year

• Establish the necessary processes to achieve ISO14064 in FY24 relating to quantification and reporting of GHG emissions

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The results for the year are set out on page 12.

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

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

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

The auditor, TC Group, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

As a leading manufacturer in the AfH UK paper hygiene sector, the Northwood Hygiene Products group play an important role in driving change, and in 2023 established a range of sustainability targets including a commitment to achieve net zero GHG emissions by 2050, and we continued to invest in achieving these targets in 2024. Visit www.northwood.co.uk/sustainability for more information and the full report.

Carbon emissions for all elements have been calculated using 2024 government GHG conversion factors and our methodology has been verified by an independent third party. Information has been gathered using the group's consumption figures for gas & electricity, total consumption of FLT fuel, individual calculation of miles driven for our company vehicle fleet and personal vehicles used for company purposes. Data meets the minimum requirements of SECR.

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per Production Output Case, the recommended ratio for the sector. This allows us to account for fluctuations in output at NHP and MPP. This is based on our 2024 output in excess of 18.9m cases.

In 2024 we have began the transition of our company car fleet from Plug in Hybrid to Electric vehicles and we continue to invest in new assets improve output and energy efficiency, such as the compressors and converting lines.

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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 auditor of the company 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 auditor of the company is aware of that information.

We have audited the financial statements of Northwood Hygiene Products Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2024 and of the group's profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 group's and parent 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:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent 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:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

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 parent 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.

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.

The extent to which our procedures are 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.

Our approach was as follows:

• We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;

• We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;

• We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;

• We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;

• We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.

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 FRC’s website at: https://www.frc.org.uk/auditors/audit-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the-auditor%E2%80%99s-responsibilities-for. 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.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,883,206 (2023 - £8,340,670 profit).

Northwood Hygiene Products Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Northwood House, Stafford Park 10, Telford, Shropshire, TF3 3AB.

The group consists of Northwood Hygiene Products Limited and all of its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of plant and machinery. The principal accounting policies adopted are set out below.

The consolidated group financial statements consist of the financial statements of the parent company Northwood Hygiene Products Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.

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.

Goodwill represents the excess of the cost of acquisition of a business 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 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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:

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 recognised in the income statement.

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.

The group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and 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, 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, 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.

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.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.

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 group after deducting all of its 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.

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.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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 if, and only if, there is 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.

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.

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

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 leased asset are consumed.

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.

Invoice discounting

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

Dispenser cost

Dispensers are provided to customers for their use for the company's products. The dispenser cost is therefore recognised in the income statement upon customers first use of the dispenser, except for the premium branded range of dispensers where the cost is amortised over a 36 month period to reflect the customer commitment to future tissue purchases due to the design of the dispenser.

In the application of the group’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.

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

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.

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.

Management tests annually whether goodwill has suffered any impairment through estimating the value in use of cash-generating units to which goodwill has been allocated.

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.

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.

Price support not yet claimed by customers on stock purchased in the year is accrued based on the estimation that an average customer and end user will still be holding 8 weeks stock on which price support has not been claimed.

Stock is stated at the lower of cost and net realisable value. Cost is determined on a first-in, first-out (FIFO) basis and includes all costs of purchase, conversion, and other costs incurred in bringing the inventories to their present location and condition.

Judgement is required in assessing the net realisable value of stock, which involves estimating future selling prices and costs necessary to make the sale. In particular, management reviews stock for obsolete, slow-moving, or damaged items and makes appropriate provisions where necessary.

Changes in market conditions or customer demand could impact the net realisable value of inventory and result in adjustments to the carrying amount. At the balance sheet date, management considered the stock held and concluded that the provision for obsolete and slow-moving inventory was adequate.

Investment income includes the following:

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 5).

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Details of the company's subsidiaries at 31 December 2024 are as follows:

Northwood Hygiene Products Limited

A Chattel Mortgage contains fixed charges over the company’s fixed assets, held by Lombard North Central Plc. dated the following dates:

18 June 2012

26 March 2015

29 April 2015.

A Chattel Mortgage contains fixed charges over the company's fixed assets, held by RBS invoice Finance Limited. Dated the following dates:

15 September 2016

27 May 2020

10 November 2020.

RBS lnvoice Finance Limited hold an all asset debenture dated 3 July 2012. The debenture is a fixed and floating charge over property and assets.

National Westminster Bank Plc holds general debentures dated 19 June 2012 and 28 May 2021. The debentures are a fixed and floating charge over property and assets and fixed and floating charge over all property and undertakings respectively.

Northwood Paper Sales Limited hold a general debenture dated 8 January 2010. The debenture is a fixed and floating charge over property and assets.

There is an unlimited cross guarantee in place with the lender between the company and the following connected companies; Northwood Tissue (Disley) Limited, Northwood Tissue (Lancaster) Limited, and Northwood Logistics Limited.

A cross-guarantee arrangement exists between Northwood Hygiene Products Ltd and Northwood Manipa S.L. in respect of a property related loan.

Midland Paper Products Limited

RBS Invoice Finance Limited holds two securities with a fixed and floating charge dated 27 May 2020 over the 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.

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:

In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

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

Amounts contracted for but not provided in the financial statements:

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

The following amounts were outstanding at the reporting end date: