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Registration number: 14506197

Merak UK Holdings Limited
Annual Report and Consolidated Financial Statements
for the Year Ended 31 December 2024

Merak UK Holdings Limited

Contents

Company Information | 1
Strategic Report | 2 to 3
Directors' Report | 4
Statement of Directors' Responsibilities | 5
Independent Auditor's Report | 6 to 8
Consolidated Profit and Loss Account | 9
Consolidated Statement of Comprehensive Income | 10
Consolidated Balance Sheet | 11
Balance Sheet | 12
Consolidated Statement of Changes in Equity | 13
Statement of Changes in Equity | 14
Consolidated Statement of Cash Flows | 15
Statement of Cash Flows | 16
Notes to the Financial Statements | 17 to 37

Merak UK Holdings Limited

Company Information

Directors | D J Seaton R J J Barnes K Stevens

Company secretary | M P James

Registered office | 2 Britannia Buildings Merchants Road Hotwells Bristol BS8 4QD

Auditors | Roberts & Co (Bristol) Limited Chartered Accountants & Statutory Auditors24 High Street Chipping Sodbury Bristol BS37 6AH

Merak UK Holdings Limited

Strategic Report for the Year Ended 31 December 2024

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

Principal activity

The principal activity of the group is providing cleaning services in the UK to both public sector and commercial clients.

Fair review of the business

We aim to present a balanced, comprehensive review of the development and performance of the business during the year and the position at the year end. Our review is written to reflect the context and nature of the risks the company is exposed to and explain the actions taken to mitigate them.
The group continues to provide cleaning services, primarily on a long-term contract basis to a range of clients including: schools, county councils, police constabularies and a variety of commercial clients. It predominantly operates is the South West of England, along the M4 corridor towards London, the Midlands and South Wales.
Our Key Financial Performance Indicators are those of turnover, gross margin and Profit before tax.
Group turnover in the year was £26,24,640 (2023: £23,641,699) with a Gross Margin of 13.32% (2023: 14.68%) being achieved. Loss before taxation amounted to £55,682 (2023: Profit £337,259).
The directors are satisfied with the results for the year and are confident that the group's results will improve in the medium to longer term as a result of the increasing breadth of our client base both in the public and commercial sectors. It is acknowledged that the general business environment remains highly competitive, but the directors remain confident that the business' reputation within the industry, the long-term nature of its contracts and its consistent focus on service delivery and productivity will see it prosper despite market conditions.

Merak UK Holdings Limited

Strategic Report for the Year Ended 31 December 2024 (continued)

Principal risks and uncertainties

The future growth of the group is dependent on the competitiveness and reputation of the group companies in relation to the industry and the wider economy in general.
The main risks arising from the group's financial instruments are interest rate fluctuations and covenant compliance resulting in liquidity risk. To mitigate these risks the group regularly reviews its cashflows, has negotiated favourable terms with its lenders and always retains access to adequate cash for its needs. The directors believe the business operates within an acceptable level of risk exposure.

Approved and authorised by the Board on 9 September 2025 and signed on its behalf by:

......................................... R J J Barnes Director

Merak UK Holdings Limited

Directors' Report for the Year Ended 31 December 2024

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

Directors of the group

The directors who held office during the year were as follows:

D J Seaton

R J J Barnes

K Stevens

Financial instruments

Objectives and policies

The group undertakes continual investment in new plant and equipment combined with staff development and welfare in order to achieve efficient, effective and productive services to customers.

Price risk, credit risk, liquidity risk and cash flow risk

The key risks of the company's financial instruments are detailed in the strategic report, together with the strategies applied by the company in order to mitigate these risks.

Employment of disabled persons

The group gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the group's policy wherever practicable to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate.

Employee involvement

During the year the policy of providing employees with information about the group companies has been continued through internal media methods in which employees have also been encouraged to present their suggestions and views on the group's performance. Regular meetings are held between local management and employees to allow a free flow of information and ideas.

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Approved and authorised by the Board on 9 September 2025 and signed on its behalf by:

......................................... R J J Barnes Director

Merak UK Holdings Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

• | select suitable accounting policies and apply them consistently;

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

• | state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; 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 group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Merak UK Holdings Limited

Independent Auditor's Report to the Members of Merak UK Holdings Limited

Opinion

We have audited the financial statements of Merak UK Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, Statement of Cash Flows, and 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 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 group's and the parent company's affairs as at 31 December 2024 and of the group's loss for the year then ended;
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• | have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

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 or apparent material misstatements, 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.

Merak UK Holdings Limited

Independent Auditor's Report to the Members of Merak UK Holdings Limited (continued)

We have nothing to report in this regard.

Opinion on other matter 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 Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• | the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

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

• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
• | the parent company financial statements are not in agreement with the accounting records and returns; or
• | certain disclosures of directors' remuneration specified by law are not made; or
• | we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 5], 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 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:

| Our audit procedures were designed to respond to identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to:
• | Discussing with the directors and management their policies and procedures regarding compliance with laws and regulations;

Merak UK Holdings Limited

Independent Auditor's Report to the Members of Merak UK Holdings Limited (continued)

• | Communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit; and
• | Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
| Our audit procedures in relation to fraud included but were not limited to:
• | Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
• | Gaining an understanding of the internal controls established to mitigate risks related to fraud;
• | Discussing amongst the engagement team the risks of fraud; and
• | Addressing the risks of fraud through management override of controls by performing journal entry testing.
| There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

......................................
Peter Roberts (Senior Statutory Auditor)
For and on behalf of Roberts & Co (Bristol) Limited, Statutory Auditor
24 High Street
Chipping Sodbury
Bristol
BS37 6AH

9 September 2025

Merak UK Holdings Limited

Consolidated Profit and Loss Account for the Year Ended 31 December 2024

| Note | 2024 £ | 2023 £
Turnover | 3 | 26,242,640 | 23,641,699
Cost of sales |  | (22,748,248) | (20,170,143)
Gross profit |  | 3,494,392 | 3,471,556
Administrative expenses |  | (3,145,924) | (2,840,861)
Operating profit | 5 | 348,468 | 630,695
Interest payable and similar expenses | 6 | (404,150) | (293,436)
(Loss)/profit before tax |  | (55,682) | 337,259
Tax on (loss)/profit | 10 | (103,585) | (132,362)
(Loss)/profit for the financial year |  | (159,267) | 204,897
Profit/(loss) attributable to: |  |  |
Owners of the company |  | (159,267) | 204,897

Merak UK Holdings Limited

Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2024

| 2024 £ | 2023 £
(Loss)/profit for the year | (159,267) | 204,897
Surplus on revaluation of other assets | 212,034 | -
Remeasurement loss on defined benefit pension schemes | (7,500) | (7,500)
| 204,534 | (7,500)
Total comprehensive income for the year | 45,267 | 197,397
Total comprehensive income attributable to: |  |
Owners of the company | 45,267 | 197,397

Merak UK Holdings Limited

(Registration number: 14506197)
Consolidated Balance Sheet as at 31 December 2024

| Note | 2024 £ | 2023 £
Fixed assets |  |  |
Intangible assets | 11 | 3,159,953 | 3,511,059
Tangible assets | 12 | 1,444,209 | 828,049
|  | 4,604,162 | 4,339,108
Current assets |  |  |
Stocks | 14 | 105,767 | 201,222
Debtors | 15 | 4,394,687 | 4,261,606
Cash at bank and in hand |  | 227,943 | 52,801
|  | 4,728,397 | 4,515,629
Creditors: Amounts falling due within one year | 17 | (7,823,107) | (6,850,019)
Net current liabilities |  | (3,094,710) | (2,334,390)
Total assets less current liabilities |  | 1,509,452 | 2,004,718
Creditors: Amounts falling due after more than one year | 17 | (1,292,104) | (1,835,912)
Provisions for liabilities | 18 | (241,019) | (139,934)
Net (liabilities)/assets |  | (23,671) | 28,872
Capital and reserves |  |  |
Called up share capital | 20 | 11,475 | 11,475
Revaluation reserve |  | 212,034 | -
Retained earnings |  | (247,180) | 17,397
Equity attributable to owners of the company |  | (23,671) | 28,872
Shareholders' (deficit)/funds |  | (23,671) | 28,872

Approved and authorised by the Board on 9 September 2025 and signed on its behalf by:

......................................... R J J Barnes Director

Merak UK Holdings Limited

(Registration number: 14506197)
Balance Sheet as at 31 December 2024

| Note | 2024 £ | 2023 £
Fixed assets |  |  |
Investments | 13 | 5,788,964 | 5,788,964
Current assets |  |  |
Cash at bank and in hand |  | 2,517 | 2,914
Creditors: Amounts falling due within one year | 17 | (4,603,489) | (4,596,331)
Net current liabilities |  | (4,600,972) | (4,593,417)
Net assets |  | 1,187,992 | 1,195,547
Capital and reserves |  |  |
Called up share capital | 20 | 11,475 | 11,475
Retained earnings |  | 1,176,517 | 1,184,072
Shareholders' funds |  | 1,187,992 | 1,195,547

The company made a profit after tax for the financial year of £142,445 (2023 - profit of £1,364,072).

Approved and authorised by the Board on 9 September 2025 and signed on its behalf by:

......................................... R J J Barnes Director

Merak UK Holdings Limited

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2024
Equity attributable to the parent company

| Share capital £ | Revaluation reserve £ | Retained earnings £ | Total £
At 1 January 2024 | 11,475 | - | 17,397 | 28,872
Loss for the year | - | - | (159,267) | (159,267)
Other comprehensive income | - | 212,034 | (7,500) | 204,534
Total comprehensive income | - | 212,034 | (166,767) | 45,267
Dividends | - | - | (150,000) | (150,000)
Transfers | - | - | 52,190 | 52,190
At 31 December 2024 | 11,475 | 212,034 | (247,180) | (23,671)

| Total equity £
At 1 January 2024 | 28,872
Loss for the year | (159,267)
Other comprehensive income | 204,534
Total comprehensive income | 45,267
Dividends | (150,000)
Transfers | 52,190
At 31 December 2024 | (23,671)

| Share capital £ | Retained earnings £ | Total £ | Total equity £
At 1 January 2023 | 1 | - | 1 | 1
Profit for the year | - | 204,897 | 204,897 | 204,897
Other comprehensive income | - | (7,500) | (7,500) | (7,500)
Total comprehensive income | - | 197,397 | 197,397 | 197,397
Dividends | - | (180,000) | (180,000) | (180,000)
New share capital subscribed | 11,474 | - | 11,474 | 11,474
At 31 December 2023 | 11,475 | 17,397 | 28,872 | 28,872

Merak UK Holdings Limited

Statement of Changes in Equity for the Year Ended 31 December 2024

| Share capital £ | Retained earnings £ | Total £
At 1 January 2024 | 11,475 | 1,184,072 | 1,195,547
Profit for the year | - | 142,445 | 142,445
Dividends | - | (150,000) | (150,000)
At 31 December 2024 | 11,475 | 1,176,517 | 1,187,992

| Share capital £ | Retained earnings £ | Total £
At 1 January 2023 | 1 | - | 1
Profit for the year | - | 1,364,072 | 1,364,072
Dividends | - | (180,000) | (180,000)
New share capital subscribed | 11,474 | - | 11,474
At 31 December 2023 | 11,475 | 1,184,072 | 1,195,547

Merak UK Holdings Limited

Consolidated Statement of Cash Flows for the Year Ended 31 December 2024

| Note | 2024 £ | 2023 £
Cash flows from operating activities
(Loss)/profit for the year |  | (159,267) | 204,897
Adjustments to cash flows from non-cash items |  |  |
Depreciation and amortisation | 5 | 372,101 | 417,550
Profit on disposal of tangible assets | 4 | (51,321) | (12,534)
Finance costs | 6 | 404,150 | 293,436
Income tax expense | 10 | 103,585 | 132,362
|  | 669,248 | 1,035,711
Working capital adjustments |  |  |
Decrease/(increase) in stocks | 14 | 95,455 | (201,222)
Increase in trade debtors | 15 | (133,081) | (4,261,605)
Increase in trade creditors | 17 | 1,265,991 | 2,979,029
Decrease in retirement benefit obligation net of actuarial changes | 19 | (10,000) | -
Cash generated from operations |  | 1,887,613 | (448,087)
Income taxes paid | 10 | (94,854) | -
Net cash flow from operating activities |  | 1,792,759 | (448,087)
Cash flows from investing activities |  |  |
Acquisitions of tangible assets |  | (392,410) | (423,833)
Proceeds from sale of tangible assets |  | 70,800 | 17,088
Net cash flows from investing activities |  | (321,610) | (406,745)
Cash flows from financing activities |  |  |
Interest paid | 6 | (404,150) | (293,436)
Proceeds from issue of ordinary shares, net of issue costs |  | - | 11,474
Proceeds from bank borrowing draw downs |  | (503,990) | -
Proceeds from other borrowing draw downs |  | - | 840,063
Repayment of other borrowing |  | (140,207) | -
Payments to finance lease creditors |  | (97,660) | 529,532
Dividends paid |  | (150,000) | (180,000)
Net cash flows from financing activities |  | (1,296,007) | 907,633
Net increase in cash and cash equivalents |  | 175,142 | 52,801
Cash and cash equivalents at 1 January |  | 52,801 | -
Cash and cash equivalents at 31 December |  | 227,943 | 52,801

Merak UK Holdings Limited

Statement of Cash Flows for the Year Ended 31 December 2024

| Note | 2024 £ | 2023 £
Cash flows from operating activities
Profit for the year |  | 142,445 | 1,364,072
Adjustments to cash flows from non-cash items |  |  |
Finance income |  | (150,000) | (1,404,189)
|  | (7,555) | (40,117)
Working capital adjustments |  |  |
Decrease in trade debtors | 15 | - | 1
Increase in trade creditors | 17 | 7,158 | 4,596,331
Net cash flow from operating activities |  | (397) | 4,556,215
Cash flows from investing activities |  |  |
Interest received |  | 150,000 | 1,404,189
Acquisition of subsidiaries | 13 | - | (5,788,964)
Net cash flows from investing activities |  | 150,000 | (4,384,775)
Cash flows from financing activities |  |  |
Proceeds from issue of ordinary shares, net of issue costs |  | - | 11,474
Dividends paid |  | (150,000) | (180,000)
Net cash flows from financing activities |  | (150,000) | (168,526)
Net (decrease)/increase in cash and cash equivalents |  | (397) | 2,914
Cash and cash equivalents at 1 January |  | 2,914 | -
Cash and cash equivalents at 31 December |  | 2,517 | 2,914

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024

1 | General information

The company is a private company limited by share capital, incorporated in England & Wales.

The address of its registered office is:
2 Britannia Buildings
Merchants Road
Hotwells
Bristol
BS8 4QD
England

These financial statements were authorised for issue by the Board on 9 September 2025.

2 | Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2024.

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

2 | Accounting policies (continued)

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Going concern

The financial statements have been prepared on a going concern basis.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the group.
The group recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the group's activities.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

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 group operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
During the year the carrying values of vehicles within the motor fleet of the group were identified as being significantly below their fair market value. The decision was taken to recognise the vehicles at market value within the accounts with valuation reviews to be undertaken on the current fleet each year. No vehicles were revalued in excess of their original cost values.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class | Depreciation method and rate
Plant and machinery | 25% straight line/ 25% reducing balance
Motor vehicles | market value

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

2 | Accounting policies (continued)

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life, commencing the year following acquisition, as follows:

Asset class | Amortisation method and rate
Goodwill on consolidation | 10% straight line

Investments

Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are 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.

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

2 | Accounting policies (continued)

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

2 | Accounting policies (continued)

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

3 | Turnover

The analysis of the group's Turnover for the year from continuing operations is as follows:

| 2024 £ | 2023 £
Sale of goods | - | 47,106
Rendering of services | 26,242,640 | 23,594,593
| 26,242,640 | 23,641,699

4 | Other gains and losses

The analysis of the group's other gains and losses for the year is as follows:

| 2024 £ | 2023 £
Gain on disposal of Tangible assets | 51,321 | 12,534

5 | Operating profit

Arrived at after charging/(crediting)

| 2024 £ | 2023 £
Depreciation expense | 20,995 | 417,550
Amortisation expense | 351,106 | -
Profit on disposal of property, plant and equipment | (51,321) | (12,534)

6 | Interest payable and similar expenses

| 2024 £ | 2023 £
Interest on obligations under finance leases and hire purchase contracts | 27,765 | 29,652
Other finance costs | 376,385 | 263,784
| 404,150 | 293,436

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

7 | Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

| 2024 £ | 2023 £
Wages and salaries | 20,898,689 | 18,451,092
Social security costs | 740,001 | 582,487
Other short-term employee benefits | 200 | 682
Pension costs, defined contribution scheme | 518,903 | 395,545
| 22,157,793 | 19,429,806

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

| 2024 No. | 2023 No.
Production | 1,942 | 1,900
Administration and support | 64 | 66
| 2,006 | 1,966

8 | Directors' remuneration

The directors' remuneration for the year was as follows:

| 2024 £ | 2023 £
Remuneration | 282,168 | 261,947

In respect of the highest paid director:

| 2024 £ | 2023 £
Remuneration | 148,817 | 118,855

9 | Auditors' remuneration

| 2024 £ | 2023 £
Audit of the financial statements of subsidiaries of the company pursuant to legislation | 20,378 | 23,670

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

10 | Taxation

Tax charged/(credited) in the consolidated profit and loss account

| 2024 £ | 2023 £
Current taxation |  |
UK corporation tax | - | 94,854
Deferred taxation |  |
Arising from origination and reversal of timing differences | 103,585 | 37,508
Tax expense in the income statement | 103,585 | 132,362

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2023 - the same as the standard rate of corporation tax in the UK) of 25% (2023 - 25%).
The differences are reconciled below:

| 2024 £ | 2023 £
(Loss)/profit before tax | (55,682) | 337,259
Corporation tax at standard rate | (13,921) | 84,315
Tax decrease from effect of capital allowances and depreciation | (50,599) | (12,954)
Decrease from effect of different UK tax rates on some earnings | - | (53,736)
Tax increase from other short-term timing differences | 103,585 | 28,903
Effect of expense not deductible in determining taxable profit (tax loss) | 36,120 | 85,834
Tax increase from effect of unrelieved tax losses carried forward | 28,400 | -
Total tax charge | 103,585 | 132,362

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

10 | Taxation (continued)

Deferred tax

Group

Deferred tax assets and liabilities

2024 | Asset £ | Liability £
Origination and reversal of timing differences | - | 241,019
| - | 241,019

2023 | Asset £ | Liability £
Origination and reversal of timing differences | - | 139,934
| - | 139,934

Tax relating to items recognised in other comprehensive income or equity - group

| 2024 £ | 2023 £
Deferred tax related to items recognised as items of other comprehensive income | 2,500 | 2,500

11 | Intangible assets

Group

| Goodwill £ | Total £
Cost or valuation
At 1 January 2024 | 3,511,059 | 3,511,059
At 31 December 2024 | 3,511,059 | 3,511,059
Amortisation
Amortisation charge | 351,106 | 351,106
At 31 December 2024 | 351,106 | 351,106
Carrying amount
At 31 December 2024 | 3,159,953 | 3,159,953
At 31 December 2023 | 3,511,059 | 3,511,059

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

12 | Tangible assets

Group

| Plant and machinery £ | Motor vehicles £ | Total £
Cost or valuation
At 1 January 2024 | 1,377,506 | 1,318,321 | 2,695,827
Revaluations | - | (18,441) | (18,441)
Additions | 157,857 | 234,553 | 392,410
Disposals | - | (240,517) | (240,517)
Transfers | 74,208 | (74,208) | -
At 31 December 2024 | 1,609,571 | 1,219,708 | 2,829,279
Depreciation
At 1 January 2024 | 1,015,124 | 852,654 | 1,867,778
Charge for the year | 14,899 | 6,096 | 20,995
Eliminated on disposal | - | (221,038) | (221,038)
Impairment | - | (282,665) | (282,665)
Transfers | 7,730 | (7,730) | -
At 31 December 2024 | 1,037,753 | 347,317 | 1,385,070
Carrying amount
At 31 December 2024 | 571,818 | 872,391 | 1,444,209
At 31 December 2023 | 362,382 | 465,667 | 828,049

Valuation

During the year it was identified that the carrying values of motor vehicles within the group’s fleet were well below their resale market value. The directors therefore took the decision to revalue the carrying values of vehicles to more closely reflect the fair value of the underlying assets.

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

13 | Investments

Group

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the group holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking | Registered office | Holding | Proportion of voting rights and shares held
|  |  | 2024 | 2023
Subsidiary undertakings
Glen Group Ltd* | Ground Floor 2 Britannia Buildings Merchants Road Hotwells Bristol BS8 4QD | Ordinary shares | 100% | 100%
| England & Wales |  |  |
RCB Business Solutions Limited* | 2 Britannia Buildings Merchants Road Hotwells Bristol BS8 4QD | Ordinary shares | 100% | 100%
| England & Wales |  |  |
South West Janitorial Supplies Ltd* | 2 Britannia Buildings Merchants Road Hotwells Bristol BS8 4QD | Ordinary shares | 100% | 100%
| England & Wales |  |  |
Merak Holdings (NI) Limited* | Jefferson House Queen Street Belfast BT1 6HL | Ordinary shares | 100% | 100%
| Northern Ireland |  |  |
Glen Group Benefits Limited | 9 Deer Park Walk, Aberdeen, Scotland, AB1 8FW | ordinary shares | 100% | 0%
| Scotland |  |  |

* indicates direct investment of the company

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

13 | Investments (continued)

Subsidiary undertakings

Glen Group Ltd The principal activity of Glen Group Ltd is contract cleaning services.
RCB Business Solutions Limited The principal activity of RCB Business Solutions Limited is the provision of cleaning services
South West Janitorial Supplies Ltd The principal activity of South West Janitorial Supplies Ltd is a dormant company
Merak Holdings (NI) Limited The principal activity of Merak Holdings (NI) Limited is a dormant company
Glen Group Benefits Limited The principal activity of Glen Group Benefits Limited is a dormant company Its financial period end is 30 June. The entire issued share capital of the company were acquired by group subsidiary company Glen Group Ltd, on 29 July 2024. The company has remained dormant in the period since acquisition, to the group accounting period end, and remains dormant in the subsequent accounting period.

Company

| 2024 £ | 2023 £
Investments in subsidiaries | 5,788,964 | 5,788,964

Subsidiaries | £
Cost or valuation
At 1 January 2024 | 5,788,964
Provision
Carrying amount
At 31 December 2024 | 5,788,964
At 31 December 2023 | 5,788,964

14 | Stocks

| Group | Company
| 2024 £ | 2023 £ | 2024 £ | 2023 £
Raw materials and consumables | 105,767 | 201,222 | - | -

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

15 | Debtors

| Group | Company
Current | 2024 £ | 2023 £ | 2024 £ | 2023 £
Trade debtors | 3,715,458 | 4,122,207 | - | -
Prepayments | 679,229 | 139,399 | - | -
| 4,394,687 | 4,261,606 | - | -

16 | Cash and cash equivalents

| Group | Company
| 2024 £ | 2023 £ | 2024 £ | 2023 £
Cash at bank | 227,943 | 52,801 | 2,517 | 2,914

17 | Creditors

|  | Group | Company
| Note | 2024 £ | 2023 £ | 2024 £ | 2023 £
Due within one year |  |  |  |  |
Loans and borrowings | 21 | 3,578,087 | 3,776,136 | - | -
Trade creditors |  | 2,075,448 | 1,502,237 | - | -
Amounts due to related parties | 24 | 132,313 | 247,313 | 4,536,950 | 4,529,792
Social security and other taxes |  | 1,601,987 | 433,386 | - | -
Other payables |  | 66,539 | 86,539 | 66,539 | 66,539
Accruals |  | 368,733 | 709,554 | - | -
Income tax liability | 10 | - | 94,854 | - | -
|  | 7,823,107 | 6,850,019 | 4,603,489 | 4,596,331
Due after one year |  |  |  |  |
Loans and borrowings | 21 | 1,292,104 | 1,835,912 | - | -

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

18 | Provisions for liabilities

Group

| Deferred tax £ | Total £
At 1 January 2024 | 139,934 | 139,934
Increase (decrease) through business combinations | 101,085 | 101,085
At 31 December 2024 | 241,019 | 241,019

19 | Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £518,903 (2023 - £395,545).

Defined benefit pension schemes

Glen Cleaning Company Retirement Benefits Scheme

Assets of the defined benefit scheme are held in trust funds separately from those of the company. The contributions are recommended by a qualified actuary, XPS Group, on the basis of triennial valuations for funding purposes using the projected unit method.

Reconciliation of scheme assets and liabilities to assets and liabilities recognised

The amounts recognised in the balance sheet are as follows:

| 2024 £ | 2023 £
Fair value of scheme assets | 159,000 | 139,000
Present value of defined benefit obligation | (58,000) | (62,000)
| 101,000 | 77,000
Effects of asset ceiling | (101,000) | (77,000)
Defined benefit pension scheme surplus/(deficit) | - | -

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

19 | Pension and other schemes (continued)

Defined benefit obligation

Changes in the defined benefit obligation are as follows:

| 2024 £
Present value at start of year | 62,000
Interest cost | 3,000
Actuarial gains and losses | (4,000)
Benefits paid | (3,000)
Present value at end of year | 58,000

Fair value of scheme assets

Changes in the fair value of scheme assets are as follows:

| 2024 £
Fair value at start of year | 139,000
Interest income | 7,000
Return on plan assets, excluding amounts included in interest income/(expense) | 6,000
Employer contributions | 10,000
Benefits paid | (3,000)
Fair value at end of year | 159,000

Analysis of assets

The major categories of scheme assets are as follows:

| 2024 % | 2023 %
Cash and cash equivalents | 1 | 2
Equity instruments | 67 | 62
Property | 10 | 9
Commodities | - | 4
Corporate bonds | 13 | 14
Gilt bonds | 9 | 9
| 100 | 100

Return on scheme assets

| 2024 £ | 2023 £
Return on scheme assets | 10,000 | 10,000

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

19 | Pension and other schemes (continued)

The pension scheme has not invested in any of the group's own financial instruments or in properties or other assets used by the group.

Principal actuarial assumptions

The principal actuarial assumptions at the balance sheet date are as follows:

| 2024 % | 2023 %
Mortality rate | 1.25 | 1.25
Discount rate | 5.50 | 4.70
Future pension increases | 5.00 | 5.00
Inflation | 3.20 | 5.00

Post retirement mortality assumptions

| 2024 Years | 2023 Years
Current UK pensioners at retirement age - male | 19.00 | 20.00
Current UK pensioners at retirement age - female | 23.00 | 22.00
Future UK pensioners at retirement age - male | 20.00 | 21.00
Future UK pensioners at retirement age - female | 25.00 | 23.00

Glen Cleaning Company Retirement Benefits Scheme

Assets of the defined benefit scheme are held in trust funds separately from those of the company. The contributions are recommended by a qualified actuary, XPS Group, on the basis of triennial valuations for funding purposes using the projected unit method.

Reconciliation of scheme assets and liabilities to assets and liabilities recognised

The amounts recognised in the balance sheet are as follows:

| 2024 £ | 2023 £
Fair value of scheme assets | 159,000 | 139,000
Present value of defined benefit obligation | (58,000) | (62,000)
| 101,000 | 77,000
Effects of asset ceiling | (101,000) | (77,000)
Defined benefit pension scheme surplus/(deficit) | - | -

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

19 | Pension and other schemes (continued)

Defined benefit obligation

Changes in the defined benefit obligation are as follows:

| 2024 £
Present value at start of year | 62,000
Interest cost | 3,000
Actuarial gains and losses | (4,000)
Benefits paid | (3,000)
Present value at end of year | 58,000

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

19 | Pension and other schemes (continued)

Fair value of scheme assets

Changes in the fair value of scheme assets are as follows:

| 2024 £
Fair value at start of year | 139,000
Interest income | 7,000
Return on plan assets, excluding amounts included in interest income/(expense) | 6,000
Employer contributions | 10,000
Benefits paid | (3,000)
Fair value at end of year | 159,000

Analysis of assets

The major categories of scheme assets are as follows:

| 2024 % | 2023 %
Cash and cash equivalents | 1 | 2
Equity instruments | 67 | 62
Property | 10 | 9
Commodities | - | 4
Corporate bonds | 13 | 14
Gilt bonds | 9 | 9
| 100 | 100

Return on scheme assets

| 2024 £ | 2023 £
Return on scheme assets | 10,000 | 10,000

The pension scheme has not invested in any of the group's own financial instruments or in properties or other assets used by the group.

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

19 | Pension and other schemes (continued)

Principal actuarial assumptions

The principal actuarial assumptions at the balance sheet date are as follows:

| 2024 % | 2023 %
Mortality rate | 1.25 | 1.25
Discount rate | 5.50 | 4.70
Future pension increases | 5.00 | 5.00
Inflation | 3.20 | 5.00

Post retirement mortality assumptions

| 2024 Years | 2023 Years
Current UK pensioners at retirement age - male | 19.00 | 20.00
Current UK pensioners at retirement age - female | 23.00 | 22.00
Future UK pensioners at retirement age - male | 20.00 | 21.00
Future UK pensioners at retirement age - female | 25.00 | 23.00

20 | Share capital

Allotted, called up and fully paid shares

| 2024 | 2023
| No. | £ | No. | £
Ordinary shares of £1 each | 10,280 | 10,280 | 10,280 | 10,280
Ordinary B shares of £1 each | 915 | 915 | 915 | 915
Ordinary C shares of £1 each | 280 | 280 | 280 | 280
| 11,475 | 11,475 | 11,475 | 11,475

21 | Loans and borrowings

Non-current loans and borrowings

| Group | Company
| 2024 £ | 2023 £ | 2024 £ | 2023 £
Bank borrowings | 1,091,980 | 1,595,970 | - | -
Hire purchase contracts | 200,124 | 239,942 | - | -
| 1,292,104 | 1,835,912 | - | -

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

21 | Loans and borrowings (continued)

Current loans and borrowings

| Group | Company
| 2024 £ | 2023 £ | 2024 £ | 2023 £
Bank borrowings | 503,991 | 503,991 | - | -
Hire purchase contracts | 175,346 | 233,188 | - | -
Other borrowings | 2,898,750 | 3,038,957 | - | -
| 3,578,087 | 3,776,136 | - | -

Bank borrowings within the group are secured through fixed and floating charges over the assets of the subsidiary company.
Hire purchase contracts within the group are secured against the underlying assets of the subsidiary company to which they relate.
Other borrowings within the group are secured against the trade debtor book balances of the subsidiary companies.

22 | Obligations under leases and hire purchase contracts

Group

Finance leases

The total of future minimum lease payments is as follows:

| 2024 £ | 2023 £
Not later than one year | 175,346 | 233,188
Later than one year and not later than five years | 200,124 | 239,942
| 375,470 | 473,130

Operating leases

The total of future minimum lease payments is as follows:

| 2024 £ | 2023 £
Not later than one year | 81,909 | 145,411
Later than one year and not later than five years | - | 234,580
Later than five years | 98,975 | -
| 180,884 | 379,991

Merak UK Holdings Limited

Notes to the Financial Statements for the Year Ended 31 December 2024 (continued)

23 | Dividends

|  | 2024 |  | 2023
|  | £ |  | £
Interim dividend of £13.07 (2023 - £17.51) per ordinary share |  | 150,000 |  | 180,000

24 | Related party transactions

Group

Summary of transactions with subsidiaries

Transactions and balances with group companies that have been eliminated on consolidation have
not been disclosed.