The director presents the strategic report for the year ended 31 December 2024.

Walki Limited was founded as Clyde Paper Company Limited in 1926 and began manufacturing at Garstang in 1972. The business was renamed Walki Converters, in 1980 and to Walki Limited in 2007.

The strategy of the business is to grow the existing customer base, through working closely with our customers to deliver a quality and cost-effective product which suits their requirements.

KPIs                 2024 (£m)     2023 (£m)

Turnover            12.95        14.69

Gross Profit            1.75        2.81        

EBITDA            0.13        (0.51)

There was a dividend of £2.25m paid to Walki Group Oy in May 2023. No final dividend has been paid in 2024.

In the prior year the company undertook restructuring exercise, which lead to a reduction in the workforce and the sale of machinery for non-core products manufacturing. A significant amount of trade is for conversion of material produced by other Group companies before delivery to the customer and pricing is managed within transfer pricing rules. In 2024 the sales levels and margins were lower than 2023 levels and our sales were lower margin business streams.

We work with our customers to supply cost effective products which meet the end customer’s technical requirements.

We have the flexibility to offer coated and laminated board material from a range of suppliers as we have no affiliations with European board suppliers; this enables us to supply the most cost-effective solutions to our customers.

The business remains certified to ISO 9001, ISO 14001, ISO 22000 and ISO 45001.

Use of Polymers and the environmental effect

One issue within the industry is the use of polymers and the environmental effect. We are constantly reviewing new products which offer improved bio-degradable properties and seeks to use these products where they are found to be effective and meet or exceed customer’s existing requirements.

The company has an environmental policy which states that Walki Limited will meet all relevant legislative and regulatory environmental requirements, codes of practice and behave in an environmentally responsible manner. The company is committed to improving its environmental performance year on year.

The company recognises the importance of its environmental responsibilities and monitors closely its impact on the environment. The company also works closely with the environmental agencies to ensure that best practice in the safe disposal of manufacturing waste is adhered to.

Foreign currency risk

The company has no operations outside of the UK but purchases and sells goods and services denominated in currencies other than sterling. As a result the value of the company's non-sterling revenues, purchases, financial assets, liabilities and cash flows can be affected significantly by movements in exchange rates in general. The company's transactional currency exposure arises from sales or purchases in currencies other than its functional currency. The company has a natural hedge by using both GBP accounts and Euro accounts.

The business is actively seeking to raise the company profile and regularly post new products updates on social media. This should increase the market awareness for Walki Limited and combined with a marketing strategy help to secure new business, for the wider Walki Group and increase the demand for Walki Limited. There is increasing demand for our products, from existing and new customers and this should see a return to profitability in 2026 after the forecast loss for 2025.

The business will be focusing on sheeting work, as there is excess capacity demand within the Walki Group customer base. We will continue to maintain our high standard of customer service, in understanding and delivering customer requirements.

The Walki Group was bought by the Oji Group, one of the world's leading paper and board manufacturers.

The Walki Group will continue to be run as a subsidiary of the Oji Group continue developing improved products which better meet the environmental needs of our customers.

With the support of the wider Oji Group enables the business call on the expertise within the group and keep up to date with the latest developments, regarding bio-degradable products.

Financial risk management objectives and policies

The management of the business and the execution of the company strategy are subject to a variety of financial risks that include the effects of changes in debt market prices, credit risk, liquidity risk and interest rate risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and related finance costs. The company does not use derivate financial instruments to manage interest rate costs and, as such, no hedge accounting is applied. These risks are formally reviewed by the board and appropriate processes put in place to monitor and mitigate them.

The company policy is for customers to be covered by credit insurance and for higher risk customer to pay for orders in advance of production. The credit terms offered to our customers are like the terms from our suppliers and therefore cashflow is efficiently managed. We have a close relationship with our core suppliers and whilst any cost increases are carefully managed, these increased costs are generally reflected within any price negotiated with our customers, in line with industry practice.

On behalf of the board

The director presents his annual report and financial statements for the year ended 31 December 2024.

The principal activities of the company during the year consisted of the supply of polymer coated and laminated material for the consumer packaging market.

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

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

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

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk management objectives and policies, and future developments.

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.

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

• select suitable accounting policies and then apply them consistently;

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

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

The director is 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. He is 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.

We have audited the financial statements of Walki Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor 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 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 director's 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 director 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 director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

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

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

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

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

• certain disclosures of director's 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 director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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. 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, is detailed below:

• Enquiries with management about any known or suspected instances of non-compliance with laws and regulations;

• Enquires with management about any known or suspected instances of fraud;

• Auditing the risk of fraud in management override of controls, including the testing of journal entries and other adjustments for appropriateness through the use of audit data analytics; and reviewing estimates for any evidence of management bias;

• Review of legal and professional expenditure to identify any evidence of ongoing litigation or enquiries;

• Auditing the risk of fraud in revenue recognition by testing a sample of transactions to gain assurance over the occurrence of revenue.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

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

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

Walki Limited is a limited company domiciled and incorporated in Scotland. The registered office is 180 St. Vincent Street, Glasgow, G2 5SG and the company's principal place of business is Ray Lane, Garstang, Preston, PR3 1GG.

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 on the historical cost convention. The principal accounting policies adopted are set out below and have been applied consistently.

In the prior year the company has gone through a restructure and going forward it will focus on sheeting work for the Walki Group customer base and continue to maintain high standards of customer service. The company is forecasting not to be profitable in the next 12 months to due the change in how the workflow is managed through the Group companies and transfer pricing rules.true

The directors have received confirmation from the wider group, which is ultimately supported by the ultimate controlling party, that it will continue to support the company if required via the non repayment of a group loan along with access to the group cashpool, for a period of at least twelve months following approval of the accounts.

On this basis, at the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of discounts, returns and value added taxes. The company recognises turnover when the amount of turnover can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria relating to the consignment stock and bill and hold arrangements have been met. Turnover is recognised on bill and hold arrangements when all risks and rewards of ownership of the goods have been transferred to the buyer.

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

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Assets in the course of construction are not depreciated.

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.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

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 is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

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 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 in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Stocks are stated at the lower of cost and net realisable value after making due allowances for obsolete and slow moving items. 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.

Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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.

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.

All of the company's financial assets fall to be classed as basic financial assets and the company therefore has no other financial assets.

Financial assets 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. The impairment loss 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 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.

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, including creditors, 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 receipts 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.

All of the company's financial liabilities fall to be classed as basic financial liabilities and the company therefore has no other 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.

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

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.

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 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 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.

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.

The company operates a defined contribution scheme. The pension cost represents contributions payable by the company to the fund.

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.

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.

In the application of the company’s accounting policies, the director is 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.

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

There were exceptional costs for redundancy and legal costs, due to restructuring of the business in the previous year. The unused accruals have then been released in the current year.

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

Their aggregate remuneration comprised:

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

Factors affecting future tax and charges

The headline rate of corporation tax increased to 25% from 1 April 2023, this policy was substantively enacted on 25 May 2021 and therefore deferred tax has been provided for at 25% (2023: 25%).

The £800,000 amounts owed to group undertakings is a loan owed to Walki OY which is due for repayment on 31/12/2026.

The redeemable preference shares entitle the holder to voting rights and to a 7.5% dividend.

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

The amount of the deferred tax liability shown above that is expected to reverse within the next 12 months is £22,200. This is due to the expectation that depreciation on tangible fixed assets will exceed capital allowances.

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.

Members have the right to receive notice of, attend and vote at general meetings of the company. Members have the right to participate in all legally declared dividends and in the event of a winding up are entitled to participate in any distributions. The shares are not redeemable.

Operating lease payments represent rentals payable by the company for motor vehicles, equipment and properties.

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:

The company has taken advantage of the exemption conferred by Section 33 FRS102, namely from disclosing any transactions entered into between two or more members of the group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

The company was wholly owned subsidiary of Walki Group Oy, a company incorporated in Finland.

The following are the parents of the largest and smallest groups in which this company's results are consolidated:

The smallest and largest group information as presented above reflects the position as at the reporting date. The registered office of Walki Holding OY and the address for which the consolidated financial statements of Walki Holding OY may be obtained from is Ahventie 4 A 15. FIN-02170 Espoo, Finland.

The ultimate controlling party is Oji Holdings Corporation who are listed on the Tokyo Stock Exchange.

During the year the directors identified that amounts included within the 31 December 2023 bank overdrafts of £185,356 were intercompany debtors of £2,210,550 and intercompany creditors of £2,395,906 respectively due to the group cash pooling arrangement. This has been amended within the balance sheet and cashflow.