Company registration number 05859797 (England and Wales)
STAR TISSUE UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
STAR TISSUE UK LIMITED
COMPANY INFORMATION
Directors
Abid Ditta
Khalid Saifullah
Sajid Saifullah
Secretary
Muhammad Afzal
Company number
05859797
Registered office
Waterfall Street
Blackburn
Lancashire
BB2 2BN
Auditor
Pierce C A Limited
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
Business address
Waterfall Street
Blackburn
Lancashire
BB2 2BN
Bankers
HSBC Bank plc
60 Church Street
Blackburn
Lancashire
BB1 5AS
STAR TISSUE UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 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 - 22
STAR TISSUE UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 1 -
The directors present the strategic report
and financial statements
for the year ended 30 September 2022.
Fair review of the business
Our principal trading activity has been the manufacture of hygiene paper products for the Away from Home (AFH) market which includes the food, leisure, hospitality, office, industry and medical sectors.
We have continued to invest heavily in the site as part of our Future Factory programme. Two production lines have now been completely automated and a third is scheduled for completion in April 2023.
We have built a further extension to our production facility, a new gatehouse to manage goods in/out and we have resurfaced and marked out the service yard to increase the capacity to handle more deliveries and shipments.
A new CCTV and security system has been installed in all of the buildings onsite.
A new office block extension has been completed with a new reception, eight new offices, office canteen and toilets.
We have also introduced an energy efficiency programme with the aim of reducing our energy usage and carbon footprint. We have successfully transitioned to all electric fork lift trucks and have installed energy efficient lighting.
New process innovations are being explored to further integrate our machines with our ERP system. Utilising IOT and AI, it is possible to gather much more data to help with maintenance and production planning.
Further machine upgrades are planned to improve machine output, providing much needed additional capacity to meet new and existing customer requirements.
Business environment
Overall, demand increased for Away from Home products and we have continued to take steps to increase production capacity to meet these increasing demands. Our wide range of products and diverse customer base enabled us to meet demand and increase our turnover by 50% this year to £42.6m, well above our targeted growth rate of 25%. The investments will provide much needed capacity next year to meet the increased demands of hygiene paper products. We are projecting to grow by 20-25% next year.
The directors continue to assess the important risks faced by the company including risks associated with Brexit and COVID. The directors plan to continue with the strategy which has led to the satisfactory results.
Strategic management
Our strategy is to continue to grow the business through strategic investments that will introduce new products to our product range enhancing our product offering and providing a one stop shop for our customers. In the coming year our investments will be focussed on productivity, automation and people development. We will continue to maintain and strengthen our balance sheet with a view to exploring bigger investment opportunities that will increase our bottom line and market share. The company has developed a strong relationship with its finance providers which has resulted in a generous working capital facility agreed at competitive borrowing rates to help fund continued growth. The company has continued to recruit the best people that are able to grow and develop in a fast growing business where productivity and innovation drives improvements throughout the business.
Key performance indicators
The directors continue to measure the performance of the company by reference to turnover growth, overall gross profit and net profitability which are monitored on a monthly basis. We are pleased to report that the business has demonstrated its resilience in this challenging climate by growing its turnover and maintaining its profitability.
STAR TISSUE UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 2 -
Khalid Saifullah
Director
12 January 2023
STAR TISSUE UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2022.
Principal activities
The principal activity of the company continued to be that of the manufacture and distribution of quality hygiene paper products.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £500,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Abid Ditta
Khalid Saifullah
Sajid Saifullah
Auditor
The auditor, Pierce C A Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
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 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.
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.
STAR TISSUE UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 4 -
On behalf of the board
Khalid Saifullah
Director
12 January 2023
STAR TISSUE UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF STAR TISSUE UK LIMITED
- 5 -
Opinion
We have audited the financial statements of Star Tissue UK Limited (the 'company') for the year ended 30 September 2022 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:
-
give a true and fair view of the state of the company's affairs as at 30 September 2022 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.
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.
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'
r
eport 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.
STAR TISSUE UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STAR TISSUE UK LIMITED
- 6 -
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 identifie
d
material misstatements in the strategic report or the directors'
r
eport
.
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
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have
no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
In identifying and assessing risks of material misstatement in respect of irregularities we considered the following:
-
The nature of the industry and the company’s control environment.
-
Results of our enquiries of management.
-
The company’s procedures and controls on compliance with laws and regulations and the risks of fraud.
-
Discussions among the audit engagement team concerning potential indicators of fraud.
We are also required to perform specific procedures to respond to the risk of management override.
As a result of our audit procedures we did not identify a material risk of fraud or other non-compliance with laws and regulations
.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
STAR TISSUE UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STAR TISSUE UK LIMITED
- 7 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Paul Moulding (Senior Statutory Auditor)
For and on behalf of Pierce C A Limited
12 January 2023
Statutory Auditor
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
STAR TISSUE UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
42,608,722
28,810,972
Cost of sales
(33,582,923)
(22,655,958)
Gross profit
9,025,799
6,155,014
Administrative expenses
(4,161,051)
(3,236,927)
Other operating income
36,185
146,446
Operating profit
4
4,900,933
3,064,533
Interest payable and similar expenses
7
(58,008)
(43,144)
Profit before taxation
4,842,925
3,021,389
Tax on profit
8
(792,877)
(760,586)
Profit for the financial year
4,050,048
2,260,803
The profit and loss account has been prepared on the basis that all operations are continuing operations.
STAR TISSUE UK LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2022
30 September 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
11
4,898,606
4,975,270
Current assets
Stocks
12
7,669,336
2,605,865
Debtors
13
9,103,678
7,213,813
Cash at bank and in hand
1,792,010
2,014,125
18,565,024
11,833,803
Creditors: amounts falling due within one year
14
(9,480,050)
(6,685,751)
Net current assets
9,084,974
5,148,052
Total assets less current liabilities
13,983,580
10,123,322
Creditors: amounts falling due after more than one year
15
(2,031,825)
(1,772,430)
Provisions for liabilities
Deferred tax liability
18
1,016,102
965,287
(1,016,102)
(965,287)
Net assets
10,935,653
7,385,605
Capital and reserves
Called up share capital
21
100
100
Profit and loss reserves
10,935,553
7,385,505
Total equity
10,935,653
7,385,605
The financial statements were approved by the board of directors and authorised for issue on 12 January 2023 and are signed on its behalf by:
Khalid Saifullah
Director
Company Registration No. 05859797
STAR TISSUE UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2020
100
6,124,702
6,124,802
Year ended 30 September 2021:
Profit and total comprehensive income for the year
-
2,260,803
2,260,803
Dividends
9
-
(1,000,000)
(1,000,000)
Balance at 30 September 2021
100
7,385,505
7,385,605
Year ended 30 September 2022:
Profit and total comprehensive income for the year
-
4,050,048
4,050,048
Dividends
9
-
(500,000)
(500,000)
Balance at 30 September 2022
100
10,935,553
10,935,653
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 11 -
1
Accounting policies
Company information
Star Tissue UK Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Waterfall Street, Blackburn, Lancashire, BB2 2BN.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
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
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of
Star Tissue Holdings Limited
. These consolidated financial statements are available from its registered office,
Waterfall Street, Blackburn, Lancashire BB2 2BN
.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 15 years.
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
7.5% straight line
Fixtures and fittings
15% straight line
Motor vehicles
20% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.7
Stocks
Stocks
are stated at the lower of cost and
estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the
stocks
to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash at bank and in hand
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
The
company’s
liability for tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date
.
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account on a straight line basis.
1.15
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
Grants received in respect of capital expenditure are amortised on a straight line basis at 7.5% per annum in line with the depreciation policy on the plant and machinery assets to which they relate.
1.16
Foreign exchange
Transactions in currencies other than
pounds sterling
are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
2
Judgements and key sources of estimation uncertainty
(Continued)
- 15 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Stocks provisions
Stocks provision assessments are considered to be a key accounting estimate for which management review the results of regular stock counts in determining the extent to which provisions should be made against slow-moving or obsolete stocks.
Debtor recoverability
Debtor recoverability is considered to be a key accounting estimate for which management continuously monitor customer debt recoveries through credit control procedures and make assessments regarding the extent to which bad debt provisions are considered necessary.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Manufacture and supply of quality hygiene paper products
42,608,722
28,810,972
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
41,604,391
28,030,624
Europe
1,004,331
780,348
42,608,722
28,810,972
2022
2021
£
£
Other significant revenue
Grants received
35,560
35,560
Covid-19 JRS monies receivable
625
110,886
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 16 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(307,774)
130,989
Government grants
(36,185)
(146,446)
Fees payable to the company's auditor for the audit of the company's financial statements
7,500
5,500
Depreciation of owned tangible fixed assets
269,553
206,058
Depreciation of tangible fixed assets held under finance leases
255,381
247,756
Amortisation of intangible assets
12,180
Cost of stocks recognised as an expense
30,680,559
20,218,391
Operating lease charges
488,958
315,959
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Production, sales and marketing
136
132
Administration
3
3
Total
139
135
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
2,908,815
2,593,217
Social security costs
246,142
197,219
Pension costs
52,699
42,134
3,207,656
2,832,570
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
37,891
37,847
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2021 - 3).
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 17 -
7
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
58,008
43,144
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
804,224
237,104
Adjustments in respect of prior periods
(62,162)
Total current tax
742,062
237,104
Deferred tax
Origination and reversal of timing differences
50,815
523,482
Total tax charge
792,877
760,586
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:
2022
2021
£
£
Profit before taxation
4,842,925
3,021,389
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
920,156
574,064
Tax effect of expenses that are not deductible in determining taxable profit
232
86
Effect of change in corporation tax rate
12,195
231,669
Amortisation on assets not qualifying for tax allowances
2,314
Research and development tax credit
(55,338)
Under/(over) provided in prior years
(62,162)
Enhanced capital allowances claimed
(28,962)
(54,303)
Government grant income
6,756
6,756
Taxation charge for the year
792,877
760,586
9
Dividends
2022
2021
£
£
Interim paid
500,000
1,000,000
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 18 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 October 2021 and 30 September 2022
183,000
Amortisation and impairment
At 1 October 2021 and 30 September 2022
183,000
Carrying amount
At 30 September 2022
At 30 September 2021
11
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 October 2021
7,162,349
377,661
31,000
7,571,010
Additions
401,754
46,516
448,270
At 30 September 2022
7,564,103
424,177
31,000
8,019,280
Depreciation and impairment
At 1 October 2021
2,275,178
315,654
4,908
2,595,740
Depreciation charged in the year
491,519
27,215
6,200
524,934
At 30 September 2022
2,766,697
342,869
11,108
3,120,674
Carrying amount
At 30 September 2022
4,797,406
81,308
19,892
4,898,606
At 30 September 2021
4,887,171
62,007
26,092
4,975,270
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2022
2021
£
£
Plant and equipment
3,206,828
2,900,148
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 19 -
12
Stocks
2022
2021
£
£
Raw materials and consumables
5,835,091
1,781,770
Work in progress
32,571
23,740
Finished goods and goods for resale
1,801,674
800,355
7,669,336
2,605,865
13
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
8,144,587
6,495,453
Corporation tax recoverable
89,188
Other debtors
717,382
499,480
Prepayments and accrued income
241,709
129,692
9,103,678
7,213,813
14
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans and overdrafts
16
1,613,174
Obligations under finance leases
17
471,199
400,603
Trade creditors
6,526,070
4,569,567
Corporation tax
409,391
Other taxation and social security
232,390
1,019,576
Other creditors
10,547
8,600
Accruals and deferred income
217,279
687,405
9,480,050
6,685,751
15
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Obligations under finance leases
17
1,907,673
1,612,718
Government grants
19
124,152
159,712
2,031,825
1,772,430
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 20 -
16
Loans and overdrafts
2022
2021
£
£
Bank overdrafts
1,613,174
Payable within one year
1,613,174
The company's bankers, HSBC Bank plc, hold as security fixed and floating charges over all of the company's assets, together with a cross guarantee over all borrowings of the company and its parent company, Star Tissue Holdings Limited.
The company also operates an invoice discounting facility with HSBC Invoice Finance (UK) Limited whereby working capital is provided under an agreement to purchase the company's eligible debts, against which fixed and floating charges have been granted over the company's assets.
17
Finance lease obligations
2022
2021
Future minimum lease payments due under finance leases:
£
£
Within one year
471,199
400,603
In two to five years
1,687,144
1,294,453
In over five years
220,529
318,265
2,378,872
2,013,321
Obligations under finance lease and hire purchase agreements are secured by fixed charges on the assets concerned.
18
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
1,016,102
965,287
2022
Movements in the year:
£
Liability at 1 October 2021
965,287
Charge to profit or loss
50,815
Liability at 30 September 2022
1,016,102
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 21 -
19
Government grants
2022
2021
£
£
Arising from government grants
124,152
159,712
Grants have been made available under the Regional Growth Fund to facilitate the acquisition of items of plant and machinery.
20
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
52,699
42,134
The company operates defined contribution pension scheme
s
for all qualifying employees.
The assets of these schemes are held separately from those of the company in independently administered funds.
21
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
'A' ordinary shares of £1 each
40
40
40
40
'B' ordinary shares of £1 each
25
25
25
25
'C' ordinary shares of £1 each
25
25
25
25
'D' ordinary shares of £1 each
10
10
10
10
100
100
100
100
22
Financial commitments, guarantees and contingent liabilities
The company has guaranteed the bank borrowings of its parent company, Star Tissue Holdings Limited. At the financial year end the borrowings of Star Tissue Holdings Limited amounted to £518,291 (2021 - £546,297).
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
806,829
355,952
Between two and five years
2,825,110
444,787
In over five years
43,800
3,675,739
800,739
STAR TISSUE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 22 -
24
Capital commitments
Amounts contracted for but not provided in the financial statements:
2022
2021
£
£
Acquisition of tangible fixed assets
124,000
-
25
Ultimate controlling party
The company's ultimate parent company is Star Tissue Holdings Limited, a company registered in England and Wales.
The company is ultimately controlled by the directors by virtue of their shareholdings in the ultimate parent company, Star Tissue Holdings Limited.
2022-09-30
2021-10-01
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