Financial Statements
Intertape Packaging UK Limited
For the financial year ended 31 December 2023
Registered number: 13458333
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Intertape Packaging UK Limited
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Company Information
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Jayendran Sundararaman (resigned 29 February 2024)
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Peter Durette (appointed 11 April 2023)
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Emmanuel Boullay (appointed 29 September 2023)
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Douglas Nalette (resigned 29 September 2023)
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Gregory Yull (resigned 10 April 2023)
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Newstead Road, Widnes, Cheshire
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Chartered Accountants & Statutory Auditors
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Intertape Packaging UK Limited
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Contents
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Directors' responsibilities statement
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Independent auditor's report
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Statement of comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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Intertape Packaging UK Limited
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Directors' report
For the financial year ended 31 December 2023
The directors present their report and the financial statements for the financial year ended 31 December 2023.
The principal activity of the Company is to manufacture other particles of paper and paperboard.
The loss for the financial year, after taxation, amounted to £13,187,429 (2022: £4,578,215).
In 2023, the Company recognised a full impairment of intellectual property rights amounting to £1,488,864 associated with certain machinery. The intellectual property, which was originally developed to enhance the performance and production capabilities of the machinery, was impaired after the machinery itself failed to meet the required speed and production volumes needed for a favorable economic return. As the machinery was no longer economically viable, the intellectual property was also deemed to have no recoverable value. The total impairment of the intellectual property was offset against the full value of the associated royalty liability at the time of impairment, with the remaining balance recorded under administrative expenses in the Statement of comprehensive income amounting to £214,326.
Also in 2023, the Company recorded an impairment of certain machinery totaling £8,623,188, as it was unable to achieve the required speed and production volume necessary for a favorable economic return.
The directors did not recommend a dividend payment for the year (2022: €Nil).
Directors and their interests
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The directors who served during the financial year were:
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Jayendran Sundararaman (resigned 29 February 2024)
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Peter Durette (appointed 11 April 2023)
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Emmanuel Boullay (appointed 29 September 2023)
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Douglas Nalette (resigned 29 September 2023)
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Gregory Yull (resigned 10 April 2023)
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None of the directors held shares in the Company during and in previous year.
Events since the end of the year
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There have been no significant events affecting the Company since the financial year end.
The Company has been managing to continue growing the business and increasing suite of products through manufacturing and distribution.
Page 1
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Intertape Packaging UK Limited
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Directors' report (continued)
For the financial year ended 31 December 2023
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the directors are aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the directors have taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
The auditor, Grant Thornton, continues in office in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Page 2
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Intertape Packaging UK Limited
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Directors' responsibilities statement
For the financial year ended December 2023
The directors are responsible for preparing the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. 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 judgments and accounting estimates that are reasonable and prudent;
∙state whether the financial statements have been prepared in accordance with applicable accounting standards, identify those standards, and note the effect and the reasons for any material departure from those standards; and
∙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 to 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.
Jeffrey Crystal
Director
Date: 2 January 2025
Page 3
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Independent auditor's report to the members of Intertape Packaging UK Limited
We have audited the financial statements of Intertape Packaging UK Limited ("the Company"), which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity for the financial year ended 31 December 2023, and the related notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and accounting standards issued by the Financial Reporting Council including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, Intertape Packaging UK Limited's financial statements:
∙give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the assets, liabilities and financial position of the Company as at 31 December 2023 and of its financial performance for the financial year then ended; 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 'Responsibilities of the auditor 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 United Kingdom, including the FRC’s Ethical Standard and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances for the entity. 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
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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 the date 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.
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Independent auditor's report to the members of Intertape Packaging UK Limited (continued)
Other information comprises the information included in the annual report, other than the financial statements and our Auditor's report thereon, including the Directors' report. The directors are responsible for the other information. Our opinion on the financial statements does not cover the information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies in the financial statements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:
∙the information given in the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements, and
∙the Directors' report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the company and its environment we have obtained in the course of the audit, we have not identified material misstatements in the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙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 directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit
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Independent auditor's report to the members of Intertape Packaging UK Limited (continued)
Responsibilities of management and those charged with governance for the financial statements
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As explained more fully in the Directors' responsibilities statement, management is responsible for the preparation of the financial statements which give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS101 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, management 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 management either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Responsibilities of the auditor for the audit of the financial statements
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The objectives of an auditor 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 their 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.
A further description of an auditor's responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatement in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to compliance with data protection, employment and environmental regulations and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and local tax legislation. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial performance and management bias through judgements and assumptions in significant accounting estimates, in particular in relation to significant one-off or unusual transactions. We apply professional scepticism through the audit to consider potential deliberate omission or concealment of significant transactions, or incomplete/inaccurate disclosures in the financial statement.
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Independent auditor's report to the members of Intertape Packaging UK Limited (continued)
Responsibilities of the auditor for the audit of the financial statements (continued)
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud (continued)
In response to these principal risks, our audit procedures included but were not limited to:
∙inquiries of management on the policies and procedures in place regarding compliance with laws and regulations, including consideration of known or suspected instances of non-compliance and whether they have knowledge of any actual, suspected or alleged fraud;
∙inspection of the Company’s regulatory and legal correspondence and review of minutes of directors’ meetings during the year to corroborate inquiries made;
∙gaining an understanding of the entity’s current activities, the scope of authorisation and the effectiveness of its control environment to mitigate risks related to fraud;
∙discussion amongst the engagement team in relation to the identified laws and regulations and regarding the risk of fraud, and remaining alert to any indications of non-compliance or opportunities for fraudulent manipulation of financial statements throughout the audit;
∙identifying and testing journal entries to address the risk of inappropriate journals and management override of controls;
∙designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing;
∙challenging assumptions and judgements made by management in their significant accounting estimates including impairment assessment of tangible and other financial assets and estimating loss allowance for expected credit losses; and
∙review of the financial statement disclosures to underlying supporting documentation and inquiries of management.
The primary responsibility for the prevention and detection of irregularities including fraud rests with those charged with governance and management. As with any audit, there remains a risk of non-detection or irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or override of internal controls.
The purpose of our audit work and to whom we owe our responsibilities
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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.
Tracey Sullivan (Senior statutory auditor)
for and on behalf of
Grant Thornton
Chartered Accountants &
Statutory Auditors
Dublin 2
Date: 2 January 2025
Page 7
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Intertape Packaging UK Limited
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Statement of comprehensive income
For the financial year 31 December 2023
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Exceptional administrative expenses
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Interest payable and similar expenses
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Loss for the financial year
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There was no other comprehensive income for 2023 (2022: £NIL).
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The notes on pages 11 to 27 form part of these financial statements.
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Page 8
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Intertape Packaging UK Limited
Registered number:13458333
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Statement of financial position
As at 31 December 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Shareholders' (deficit)/funds
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 11 to 27 form part of these financial statements.
Page 9
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Intertape Packaging UK Limited
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Statement of changes in equity
For the financial year ended 31 December 2023
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Comprehensive loss for the financial year
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Loss for the financial year
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Statement of changes in equity
For the financial year ended 31 December 2022
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Comprehensive loss for the financial year
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Loss for the financial year
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Contributions by and distributions to owners
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Shares issued during the financial year
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The notes on pages 11 to 27 form part of these financial statements.
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Page 10
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
Intertape Packaging UK Limited is a private company limited by shares, which is incorporated in England and Wales and registered under the number 13458333 on 15 June 2021. The Company’s registered office is located at Unit 1, Liberty Park, Newstead Road, Widnes, Cheshire, United Kingdom, WA8 8GS.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
During the current year, the Company identified a need to reclassify certain items in the prior year's financial statements to improve the presentation and comparability of the financial information. The reclassifications did not have an impact on the previously reported net income, but have been made to conform to the current year’s presentation.
The following principal accounting policies have been applied:
The results of the Company for the year ended 31 December 2023 show turnover of £12.7 million
(2022: £0.7 million). The Company generated a loss after taxation for the year of £13.2 million (2022: loss after taxation of £4.6 million). Shareholders’ deficit at the end of the year amounted to £3.0M (2022: funds of £10.3M). The net loss incurred and the shareholder's deficit at the end of the year was mainly caused by the loss on impairment of machinery amounting to £8.6 million and impairment of intangible asset amounting to £1.4 million. The Company's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Company should be able to operate on its own account for the foreseeable future.
At the time of approving of the financial statements, the directors have sought and obtained confirmation from the Company's parent that adequate resources will continue to be made available to the Company to ensure that it can continue with its commercial activities for the foreseeable future.
Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is sterling (£).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
Page 11
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
2.Accounting policies (continued)
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Foreign currency translation (continued)
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At each period end, foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Revenue from the sale of goods is recognised on the satisfaction of performance obligations, such as the transfer of a promised good, identified in the contract between the Company and the customer.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
To determine whether to recognise revenue, the Company follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied.
Revenue is recognised either at a point in time or over time, when (or as) the Company satisfies performance obligations by transferring the promised goods or services to its customers.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
Page 12
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
2.Accounting policies (continued)
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
The estimated useful lives range as follows:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Page 13
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
2.Accounting policies (continued)
The Company assesses whether a contract is or contains a lease, at inception of the contract. Contracts that meet the definition of a lease are recognised on the balance sheet as a right-of-use asset and a corresponding lease liability, unless they are determined to be low value (such as small office equipment) or short-term leases (defined as leases with a lease term of 11 months or less). Lease payments related to low value and short-term leases are recognised in earnings on a straight-line basis over the lease term. The classification of a short-term lease is re-assessed if the terms of the lease are changed.
At the lease commencement date, the lease liability is measured as the present value of the lease payments unpaid at that date, including non-lease components, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate determined by reference to current market rates for a similarly rated industrial company issuing debt for maturities approximating the term of the lease. Lease payments are apportioned between the finance cost and the liability. The finance charge is recognised in earnings in finance costs and is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed payments), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.
At the lease commencement date, the right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). Right-of-use assets are depreciated on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Lease term includes extension and early termination options when it is reasonably certain that the Company will exercise the option.
The lease liability is remeasured to reflect any reassessment or modification, and the corresponding adjustment is reflected in the right-of-use asset, or earnings if the right-of-use asset is already fully depreciated.
In the balance sheets, the right-of-use assets have been included under the caption tangible fixed assets and lease liabilities are presented under the Creditors: amounts falling due within one year for amounts expected to settle in the next twelve months and Creditors: amounts falling due after one year for amounts expected to settle in more than twelve months.
Variable lease payments that are not recognised as a lease liability include usage charges on manufacturing equipment, inventory handling charges at warehouses and common area maintenance on office buildings and manufacturing facilities. Variable lease payments are expensed in the period they are incurred.
Page 14
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
2.Accounting policies (continued)
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Impairment of non-financial assets
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The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, the Company makes an estimate of the asset’s recoverable amount in order to determine the extent of the impairment loss. An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses on continuing operations are recognised in the income statement in those expense categories consistent with the function of the impaired asset.
For assets where an impairment loss subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the revised estimate of its recoverable amount, not to exceed the carrying amount that would have been determined, net of depreciation, had no impairment losses been recognised for the asset or cash generating unit in prior years.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, inclusive of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Page 15
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
2.Accounting policies (continued)
The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The Company's accounting policies in respect of financial instruments transactions are explained overleaf.
Financial assets and financial liabilities are initially measured at fair value.
Financial assets
All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.
Fair value through profit or loss
All of the Company's financial assets are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses being recognised in profit or loss to the extent they are not part of a designated hedging relationship. The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset.
Impairment of financial assets
The Company always recognises lifetime ECL for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.
Financial liabilities
Fair value through profit or loss
Financial liabilities are classified as at fair value through profit or loss, when the financial liability is held for trading, or is designated as at fair value through profit or loss. This designation may be made if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise, or the financial liability forms part of a group of financial instruments which is managed and its performance is evaluated on a fair value basis, or the financial liability forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at fair value through profit or loss. Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part of a designated hedging relationship.
Page 16
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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At amortised cost
Financial liabilities which are neither contingent consideration of an acquirer in a business combination, held for trading, nor designated as at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. This is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or where appropriate a shorter period, to the amortised cost of a financial liability.
Exceptional items are material items of income or expense that, due to their size, nature, or incidence, require separate disclosure in order to provide a better understanding of the entity’s financial performance. These items are not expected to recur frequently and typically include:
−Costs associated with significant restructuring or reorganization of the business.
−Impairments of goodwill or other non-current assets.
−Other non-recurring items that significantly affect the results for the period.
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Financial Reporting Standard 101 - reduced disclosure exemptions
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The following exemptions from the requirements of IFRS have been applied in the preparation of these financial statements in accordance with FRS 101:
∙The requirements in the following paragraphs of IAS 1 Presentation of Financial Statements:
(i) 79 (a) (iv) (reconciliation of the number of shares outstanding at the beginning and the end of the period)
(ii) 40A-D (requirements for a third statement of financial position)
(iii) 134 to 136 (capital management disclosures).
∙IAS 7, ‘Statement of Cash Flows’
∙IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’- the requirement of paragraph 30 and 31. Disclosure of future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date.
∙IAS 16, ‘Property, Plant and Equipment’ paragraph 73 (e) – Reconciliation of the carrying amount at the beginning and end of the period.
∙IAS 24, ‘Related Party Disclosures’ paragraph 17 – Disclosure of key management personnel.
∙The requirements in IAS 24, ‘Related Party Disclosures’ to disclose related party transactions entered into between two or more members of a group.
∙IAS 36, ‘Impairment of Assets’ paragraph 134 (d) to 134 (f) – Disclosure regarding detailed information about the estimates used to measure recoverable amount of cash generating units containing goodwill or intangible assets with indefinite useful lives.
∙IAS 38, ‘Intangible Assets’ paragraph 118 (e) - Reconciliation of the carrying amount at the beginning and end of the period.
∙The requirement of IFRS 1, ‘First-time adoption of International Financial Reporting Standards’, to present a statement of financial position at the date of transition.
Page 17
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
2.Accounting policies (continued)
2.18 Financial Reporting Standard 101 - reduced disclosure exemptions (continued)
∙IFRS 7, ‘Financial Instruments’ Disclosures.
∙IFRS 13, ‘Fair Value Measurement’.
∙IFRS 16, ‘Leases’- For lessees from the requirements of paragraphs 52 (single lease disclosure note) and paragraph 58 (maturity analysis of lease liabilities) as long as disclosure is made of details of indebtedness required by paragraph 61(1) of Schedule 1 to the Accounting Regulations separately for lease liabilities and other liabilities, and in total.
This information is included in the consolidated financial statements of Iris Parent Holdco, L.P. as at 31 December 2023 and these financial statements may be obtained from 100 Paramount Drive, Suite 300, Sarasota, FL 34232.
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New standards adopted as at 1 January 2023
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Some accounting pronouncements which have become effective from 1 January 2023 and have therefore been adopted do not have a significant impact on the Company’s financial results or position.
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Judgments in applying accounting policies and key sources of estimation uncertainty
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The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the reporting date and the amounts reported for revenues and expenses during the year. The nature of estimation means that actual outcomes could differ from those estimates.
Impairment of non-financial assets
During each financial year, the Company arranges for an assessment of its assets to determine if there are any indicators of impairment as required by IAS 36 ‘Impairment of Assets’.
Estimating loss allowance for expected credit losses
The Company measures expected credit losses of a financial instrument in a way that reflects an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money and information about past events, current conditions and forecasts of future economic conditions. When measuring ECL the Company uses reasonable and supportable forward-looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other.
Establishing useful economic lives for depreciation purposes of tangible fixed assets
Long-lived assets, consisting primarily of tangible fixed assets, comprise a significant portion of the total assets. The annual depreciation charge depends primarily on the estimated useful economic lives of each type of asset and estimates of residual values. The Directors regularly review these asset useful economic lives and change them as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset useful lives can have a significant impact on depreciation and amortisation charges for the period. Detail of the useful economic lives is included in the accounting policies.
Page 18
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
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Loss on ordinary activities before interest and taxation
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The operating loss is stated after charging/(crediting):
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Depreciation of right-of-use assets
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Depreciation of tangible fixed assets
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Amortisation of intangible assets
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Impairment of plant and machinery (note 9)
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Impairment of intangible assets (note 8)
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The average monthly number of employees, excluding the directors, during the financial year ended 31 December 2023 was as follows:
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During the period, all directors were remunerated through another Group company and their costs were not recharged as no practical allocation could be made. Details of Group director's remuneration is disclosed in the accounts of Iris Holding Sub, Inc., the Parent Company.
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Interest payable and similar expenses
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Finance lease charges payable
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Page 19
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
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Current tax on profits for the year
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Origination and reversal of timing differences
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Effect of changes in tax rates
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Adjustments in respect of prior years
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Factors affecting tax charge for the period
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The tax assessed for the period is higher than (2022 - higher than) the blended rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by blended rate of corporation tax in the UK of 23.5% (2022 - 19%)
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Permanent benefit on capital allowances
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Adjustments in respect of prior years
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Total tax charge for the financial year
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The standard rate of UK Corporation Tax remained at 19% until 31 March 2023. The Finance Act 2021 increased this rate from 19% to 25% from 1 April 2023 for companies generating taxable profits of more than £250,000.
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Page 20
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
7.Taxation (continued)
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Factors that may affect future tax charges
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The standard rate of UK Corporation Tax applicable to the Company increased to 25% from 1 April 2023. Pillar Two legislation has been substantively enacted in the United Kingdom in 2023 and the legislation will be effective for the Company’s financial year beginning 1 January 2023. The Company has performed an assessment of its potential exposure to Pillar Two income taxes for the year ended 31 December 2023. The Company is a member of Iris Holding Sub, Inc., which is within the scope of the OECD’s Pillar Two tax rules based on the most recent tax filings and financial statements for the year ended 31 December 2023.
Based on the assessment, the Company has identified no potential exposure to Pillar Two income taxes as the standard tax rate applicable to the Company’s profits in the United Kingdom is 25%, which is above the Pillar Two effective tax rate of 15%. If Pillar Two had applied in 2023, the average effective tax rate applicable to these profits would remain the same. The Company has applied the mandatory temporary exception to accounting for deferred taxes arising from implementation of Pillar Two model rules introduced in the amendment to FRS 102 adopted by the FRC in July 2023.
Page 21
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
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Charge for the financial year on owned assets
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In 2023, the Company recognised a full impairment of intellectual property rights associated with certain machinery. The intellectual property, which was originally developed to enhance the performance and production capabilities of the machinery, was impaired after the machinery itself failed to meet the required speed and production volumes needed for a favorable economic return. As the machinery was no longer economically viable, the intellectual property was also deemed to have no recoverable value. The total impairment of the intellectual property was offset against the full value of the associated royalty liability at the time of impairment, with the remaining balance recorded under administrative expenses in the Statement of comprehensive income amounting to £214,326.
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Page 22
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
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Transfers between classes
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Charge for the financial year on owned assets
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Page 23
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
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Tangible fixed assets (continued)
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In 2023, the Company recorded an impairment of certain machinery totaling £8,623,188, as it was unable to achieve the required speed and production volume necessary for a favorable economic return. Consequently, the Company also impaired the associated intellectual property rights linked to this machinery. The impairment was recorded as part of administrative expenses in the Statement of comprehensive income.
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Maintenance spare parts inventory
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In the opinion of the directors, the replacement cost of the stock did not differ significantly from their carrying amounts.
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Amounts owed by group undertakings
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Amounts owed by group undertakings are unsecured, interest free and payable on demand.
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Page 24
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Lease liabilities - current portion
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Trade and other creditors are payable at various dates in the three months after the end of the year in
accordance with the creditors usual and customary credit terms.
Other taxation and social security are payable in the timeframe set down in the relevant legislation.
Amounts owed to group undertaking are unsecured, interest-free loan, and repayable on demand.
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Other taxation and social security
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Creditors: Amounts falling due after more than one year
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Lease liabilities - noncurrent portion
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Loans represent the borrowings draw down under the loan agreement with Intertape Polymer Corp., a related party. The proceeds of the loans are used for general corporate purposes in connection with the proposed expansion of the Company's commercial activities in the UK. The loans are subject to an interest rate of the sum of the SOFR Rate plus 2.50% per annum. Interests shall be payable on February 28 and August 31 of each year. Each loan and any accrued but unpaid interest on such loan shall be repayable, in full, on the maturity date.
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Page 25
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
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Authorised, allotted, called up and fully paid
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15,250,000 (2022 - 15,250,000) Ordinary shares of £1.00 each
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There is a single class of Ordinary shares. The shares come with full voting rights, dividend rights, and rights to capital distribution (including in the event of winding up); however, they do not include any redemption rights.
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Profit and loss account
The profit and loss reserve represents cumulative losses.
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Commitments under finance leases
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Company as lessee
The Company has a lease for a property. With the exception of short-term leases and leases of low-value underlying assets, the lease is reflected on the balance sheet as a right-of-use asset and a lease liability. The Company classifies its right-of-use assets in a consistent manner to its tangible assets (see Note 9).
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The Company’s future minimum lease payments at the balance sheet date were as follows:
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Certain assets are held under finance lease arrangements. Obligation under finance lease are secured by the related assets held under finance lease. The lease arrangements generally include fixed lease payments and a purchase option at the end of the lease term.
The Company has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. In addition, certain variable lease payments are not permitted to be recognised as lease liabilities and are expensed as incurred. The expense relating to payments not included in the measurement of the lease liability, treated as short-term leases amounted to £67,812 (2022: £63,365).
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Page 26
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Intertape Packaging UK Limited
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Notes to the financial statements
For the financial year ended 31 December 2023
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Related party transactions
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The Company is exempt under the terms of FRS 101 paragraph 8(i) from disclosing related party transactions entered into between two or more members of a group provided that any subsidiary which is a party to a transaction is wholly owned by a member. There are no other related party transactions requiring disclosure.
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Post balance sheet events
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There have been no significant events affecting the Company since the financial year end.
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Ultimate holding company and controlling party
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The Company is a wholly owned subsidiary of Iris Holding Sub, Inc., a company incorporated in the United States of America. The Company's ultimate controlling party at year-end is Iris Parent Holdco, L.P., a company incorporated in the USA with main business operation of holding investments in securities.
Page 27
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