REGISTERED NUMBER: SC489143 (Scotland)

Group Strategic Report, Report of the Directors and

Audited Consolidated Financial Statements for the Year Ended 31 December 2024

for

Impact Recycling Limited

Page

Group Strategic Report

1

Report of the Directors

5

Report of the Independent Auditors

7

Consolidated Statement of Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

The directors present their strategic report of the company and the group for the year ended 31 December 2024.

REVIEW OF BUSINESS

Overview

The Group specialises in innovative recycling solutions underpinned by its patented technology. In 2024, the business focused on commercialising its technology, strengthening strategic partnerships, and enhancing operational capabilities across its three core sites - Glasgow Medical Plant, Durham 3D Plant, and Durham 2D Plant.

The market for high-quality recycled plastics continues to grow, supported by regulatory initiatives and increasing customer sustainability commitments. While the Group remains in an early stage of revenue growth, targeted investment in research and development has reinforced technological leadership and improved process efficiency, establishing a strong foundation for future growth.

Site-by-Site Operational Review

1. Glasgow Medical Plant

The Glasgow facility targets a specialised and expanding market segment. In 2024, production trials were conducted in partnership with leading UK clinical waste companies, demonstrating the plant's ability to deliver scalable, circular solutions for medical waste. Commercial production is expected to commence in the coming year, establishing a new revenue stream in a high-margin sector.

2. Durham 3D Plant

The Durham 3D site has a proven track record in serving the rigid packaging sector. Production was temporarily scaled back in 2024 to allow relocation to a larger shared site with the 2D operation. The move provides economies of scale, reduces overheads, and increases capacity to meet growing customer demand, supporting the Group's medium-term revenue growth targets.

3. Durham 2D Plant

The Durham 2D facility addresses a recycling segment where processing capacity is constrained and demand is rising rapidly. Commissioning progressed through 2024, with production now scheduled to begin in 2026. Once operational, the plant will strengthen the Group's market position and contribute materially to revenue growth.

4. Licensing Opportunities

The Group has entered a strategically significant licensing and project management agreement with a leading European recycling operator. This involves providing project management, technical support, and process design services for two co-located plants, each processing 25,000 tonnes annually.

The agreement delivers immediate project management revenue and establishes a long-term, capital-light licensing stream. The licensee plans to develop a further facility in 2027, presenting additional recurring revenue potential. This partnership validates the scalability of the Group's technology and reinforces its position as a leading technology provider in the sector.

Ownership Structure

Impact Recycling Ltd, the parent company, holds 100% of:

- RRR Polymers Ltd - Durham 3D operations

- IR SPV3 Ltd - Durham 2D operations

- IR SPV2 Ltd - Dormant, earmarked for future medical operations, separate from licensing activities

This structure enables focused management of operational sites, licensing activities, and future projects.

Financial and Operational Performance

Key Financial Highlights

Metric

2024

2023

Commentary

Revenue

£4.9m

£2.3m

Over 110% growth, driven by 3D plant demand and licensing contributions.

Loss before tax

(£2.3m)

(£3.8m)

Losses reduced due to operational efficiencies and improved plant utilisation.

Revenue Performance

Revenue growth reflects:

- Strong demand for recycled materials at the Durham 3D plant.

- Early-stage licensing and project management revenue from the European partnership.

- Glasgow Medical production trials, which are expected to convert to commercial contracts in 2025.

Gross Profit and Operating Loss

Gross profit improved significantly, with losses narrowing to £505k despite the costs of 3D plant relocation and scale-up. The stabilisation of operating losses demonstrates the impact of process optimisation, staff training, and more efficient plant utilisation.

Cash Position and Funding

The Group maintained sufficient cash resources to fund ongoing operations and strategic projects. Active funding strategies - including grants, equity, and strategic partnerships - are in place to support commissioning of the Durham 2D plant and future commercial expansion.

Trends & Insights

Market Dynamics:

Demand for recycled plastics continues to strengthen, driven by regulatory measures such as Extended Producer Responsibility (EPR) and recycled content mandates. Brand owners are increasingly seeking reliable, high-quality recycled material, positioning the Group as a preferred supplier.

Technology Commercialisation:

Progress during 2024 translated the Group's technology into scalable, revenue-generating operations. Key steps included 3D plant relocation, commissioning of the 2D plant, and trials at Glasgow Medical.

Operational Efficiency:

Enhanced maintenance schedules, workforce training, and improved plant monitoring contributed to higher uptime, reduced unplanned downtime, and narrowing losses.

Strategic Partnerships:

The European licensing and project management agreement validated the Group's technology at scale and opened a new, capital-light revenue stream, with further growth opportunities anticipated from additional facility development.

Looking Ahead

The Group enters 2025 with:

- A strengthened operational base and proven technology platform.

- Growing commercial pipeline across all sites.

Key priorities:

- Converting Glasgow Medical trials into contracted volumes.

- Completing Durham 2D commissioning.

- Expanding 3D production capacity at the larger Durham site.

- Securing additional licensing agreements for capital-light revenue growth.

- Driving margin improvements through operational efficiency and disciplined cost management.

The Board remains confident in the Group's strategy and ability to deliver long-term shareholder value through operational excellence, technological leadership, and disciplined growth.

Going Concern and Financial Position

The Group ended 2024 with a cash position sufficient to support ongoing operations and strategic projects. During 2025, the Group encountered financial pressure arising from continued investment and the time lag in recouping funds from grant contributions.

To address these challenges, the Board has secured additional funding via a Convertible Loan Note (CLN), providing sufficient liquidity to support the Group's operational runway and strategic plans. Additional measures include:

- Phasing capital expenditure and operational expansion to preserve cash.

- Driving operational efficiencies and cost management across all sites.

PRINCIPAL RISKS AND UNCERTAINTIES

1. Financial Sustainability Risk

Risk: Recycling markets can be volatile, with commodity prices for recovered materials fluctuating. The company's history of operating losses, combined with rising energy and logistics costs, puts pressure on cash flow. If these pressures are not carefully managed, profitability could be delayed, limiting our ability to reinvest in new facilities or technology upgrades.

Mitigation: The Board tracks cash flow closely, adjusting operating plans in response to market conditions. Cost efficiencies are being driven through better plant utilisation, improved material recovery rates, and energy optimisation initiatives. Funding strategies include equity and debt financing, securing grants for innovation, and pursuing partnerships with waste management firms to stabilise revenue streams. A phased roadmap with clear financial milestones guides progress toward profitability.

2. Commercialisation and Market Adoption Risk

Risk: Although our patented recycling technology delivers higher recovery rates, market adoption can be slowed by conservative procurement processes, buyer education gaps, and price sensitivity among waste producers. Competing disposal routes, including landfill and incineration, may still appear cheaper in some regions.

Mitigation: We are actively engaging early customers - including local authorities, manufacturers, and waste management firms - to demonstrate real-world results and cost savings. Commercial models are flexible, offering options such as technology licensing and revenue-share partnerships to lower the entry barrier. Targeted marketing and participation in circular economy forums are building awareness and credibility in the market.

3. Technology Risk

Risk: Our competitive edge depends on keeping our technology efficient and ahead of alternative recycling methods. There is a risk that competitor innovations or legal challenges to our patents could erode our advantage, or that technology obsolescence could limit future growth.

Mitigation: We invest continuously in R&D to increase throughput, reduce costs, and expand the range of recyclable materials our process can handle. Our IP portfolio is actively protected and updated, and we maintain close collaboration with universities and research partners to stay ahead of market needs. Operational feedback loops from our plants ensure that technological improvements are quickly tested and deployed.

4. Regulatory and Policy Risk

Risk: Recycling is a highly regulated sector. Shifts in legislation - for example, extended producer responsibility (EPR) schemes, packaging taxes, or landfill diversion targets - could change demand dynamics or increase compliance costs. A reduction in government incentives could also affect investment decisions by customers.

Mitigation: We closely track UK and EU recycling policy developments and engage with industry associations to inform and anticipate change. Our technology is built with regulatory adaptability in mind, enabling us to process new material streams or meet stricter contamination thresholds if required. Geographic diversification and working with multiple sectors also reduce over-reliance on any single regulatory regime.

5. Operational Execution Risk

Risk: Our ability to scale relies on the smooth running of plants, consistent feedstock supply, and reliable equipment. Risks include supply chain disruptions (e.g., for spare parts or critical components), staffing shortages, and quality control issues that could reduce output or damage customer confidence.

Mitigation: We have implemented rigorous plant monitoring, preventative maintenance schedules, and supplier diversification strategies to reduce bottlenecks. Workforce training programs and cross-skilling initiatives ensure operational resilience. Expansion plans are staged and modular, reducing risk by proving performance at each scale-up stage before committing additional capital.

6. Reputation and Environmental Risk

Risk: As a recycling company, our reputation depends on delivering genuine environmental benefits. Failure to meet ESG commitments could undermine trust with customers, investors, and regulators.

Mitigation: We track ESG metrics, including verified recycling rates and carbon savings, and subject our data to third-party assurance where possible. Stakeholder engagement programs help us respond quickly to concerns. Continuous improvement programs ensure we stay ahead of environmental expectations, reinforcing our position as a trusted sustainability partner.

7. People and Workforce Risk

Risk: Our operations depend on a skilled, safety-conscious workforce to manage plants, equipment, and logistics. There is a risk of workplace incidents, staff turnover, or skills shortages - particularly in technical and engineering roles - which could disrupt production, raise costs, or harm our reputation as a responsible employer.

Mitigation: We maintain a strong focus on health and safety, with regular training, clear reporting procedures, and continuous improvement programs to reduce incidents. Competitive pay and benefits packages, along with apprenticeships and career development opportunities, help attract and retain skilled employees. Workforce planning ensures we have the right expertise in place as we scale operations, and succession plans are developed for key roles to maintain operational resilience.

ON BEHALF OF THE BOARD:

S McGladrigan - Director

29 September 2025

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2024.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of scientific research, product development and testing, business development and waste plastic recycling.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2024.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

Mr D Walsh

Mr F Doorenbosch

Other changes in directors holding office are as follows:

S McGladrigan was appointed as a director after 31 December 2024 but prior to the date of this report.

Mr G Bailey and Mr J C Finlayson ceased to be directors after 31 December 2024 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

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

-	select suitable accounting policies and then apply them consistently;

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

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

Drummond Laurie CA are deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

S McGladrigan - Director

29 September 2025

Opinion

We have audited the financial statements of Impact Recycling Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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 of the parent company 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 Auditors' 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

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 five, 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 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 group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud.

Based on our understanding of the group, we identified that the principal risks of non-compliance with laws and regulations related to fraudulent manipulation of the financial statements, including the risk of override of controls, to reduce profits and tax liabilities. We determined that the most likely method of manipulation would be the posting of inappropriate journal entries. Audit procedures performed by the audit engagement team consisted of a review of large and unusual journal entries, challenging assumptions and judgements made by management in significant accounting estimates, discussions with management related to known or suspected instances of non-compliance with laws and regulations, review of Board minutes where available, and an evaluation of management controls designed to prevent and detect irregularities.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations or through collusion.

A further description of our 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 Report of the Auditors.

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 a Report of the Auditors 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.

Greig Brown (Senior Statutory Auditor)

for and on behalf of Drummond Laurie CA

Statutory Auditor

Unit 5

Gateway Business Park

Beancross Road

Grangemouth

FK3 8WX

29 September 2025

TURNOVER

3

4,902,859

2,316,966

Cost of sales

(2,267,902

)

(1,838,446

)

GROSS PROFIT

2,634,957

478,520

Administrative expenses

(11,217,833

)

(5,060,245

)

(8,582,876

)

(4,581,725

)

Other operating income

6,327,726

863,907

OPERATING LOSS

5

(2,255,150

)

(3,717,818

)

Interest payable and similar expenses

6

(50,662

)

(34,604

)

LOSS BEFORE TAXATION

(2,305,812

)

(3,752,422

)

Tax on loss

7

325,711

105,300

LOSS FOR THE FINANCIAL YEAR

(1,980,101

)

(3,647,122

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(1,980,101

)

Prior year adjustment

(99,214

)

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

(3,746,336

)

Loss attributable to:

Owners of the parent

(1,980,101

)

(3,647,122

)

Total comprehensive income attributable to:

Owners of the parent

(1,980,101

)

(3,845,550

)

FIXED ASSETS

Tangible assets

9

10,226,778

8,247,970

Investments

10

-

-

10,226,778

8,247,970

CURRENT ASSETS

Stocks

11

1,451,463

1,231,697

Debtors

12

2,796,651

2,525,403

Cash at bank

519,575

1,024,571

4,767,689

4,781,671

CREDITORS

Amounts falling due within one year

13

(6,411,506

)

(3,912,524

)

NET CURRENT (LIABILITIES)/ASSETS

(1,643,817

)

869,147

TOTAL ASSETS LESS CURRENT LIABILITIES

8,582,961

9,117,117

CREDITORS

Amounts falling due after more than one year

14

(7,007,665

)

(5,561,720

)

NET ASSETS

1,575,296

3,555,397

CAPITAL AND RESERVES

Called up share capital

17

1,622,278

1,622,278

Share premium

18

5,665,275

5,665,275

Retained earnings

18

(5,712,257

)

(3,732,156

)

SHAREHOLDERS' FUNDS

1,575,296

3,555,397

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2025 and were signed on its behalf by:

S McGladrigan - Director

FIXED ASSETS

Tangible assets

9

3,415,686

3,864,543

Investments

10

7,497,256

3,013,289

10,912,942

6,877,832

CURRENT ASSETS

Stocks

11

666,415

764,758

Debtors

12

920,167

568,234

Cash at bank

481,009

276,815

2,067,591

1,609,807

CREDITORS

Amounts falling due within one year

13

(5,065,985

)

(796,753

)

NET CURRENT (LIABILITIES)/ASSETS

(2,998,394

)

813,054

TOTAL ASSETS LESS CURRENT LIABILITIES

7,914,548

7,690,886

CAPITAL AND RESERVES

Called up share capital

17

1,622,278

1,622,278

Share premium

18

5,665,275

5,665,275

Retained earnings

18

626,995

403,333

SHAREHOLDERS' FUNDS

7,914,548

7,690,886

Company's profit/(loss) for the financial year

223,662

(2,066,442

)

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2025 and were signed on its behalf by:

S McGladrigan - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2023

119,882

14,180

5,430,172

5,564,234

Prior year adjustment

-

(99,214

)

-

(99,214

)

As restated

119,882

(85,034

)

5,430,172

5,465,020

Changes in equity

Issue of share capital

1,502,396

-

235,103

1,737,499

Total comprehensive income

-

(3,647,122

)

-

(3,647,122

)

Balance at 31 December 2023

1,622,278

(3,732,156

)

5,665,275

3,555,397

Changes in equity

Total comprehensive income

-

(1,980,101

)

-

(1,980,101

)

Balance at 31 December 2024

1,622,278

(5,712,257

)

5,665,275

1,575,296

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2023

119,882

2,568,989

5,430,172

8,119,043

Prior year adjustment

-

(99,214

)

-

(99,214

)

As restated

119,882

2,469,775

5,430,172

8,019,829

Changes in equity

Issue of share capital

1,502,396

-

235,103

1,737,499

Total comprehensive income

-

(2,066,442

)

-

(2,066,442

)

Balance at 31 December 2023

1,622,278

403,333

5,665,275

7,690,886

Changes in equity

Total comprehensive income

-

223,662

-

223,662

Balance at 31 December 2024

1,622,278

626,995

5,665,275

7,914,548

Cash flows from operating activities

Cash generated from operations

1

4,123,483

(913,726

)

Interest paid

(50,662

)

(34,604

)

Tax paid

272,165

255,753

Net cash from operating activities

4,344,986

(692,577

)

Cash flows from investing activities

Purchase of tangible fixed assets

(7,846,316

)

(4,146,474

)

Sale of tangible fixed assets

-

593

Net cash from investing activities

(7,846,316

)

(4,145,881

)

Cash flows from financing activities

New loans in year

3,000,000

4,000,000

Loan repayments in year

(9,719

)

(9,719

)

Amount introduced by directors

6,053

-

Amount withdrawn by directors

-

(19,420

)

Share issue

-

1,737,499

Net cash from financing activities

2,996,334

5,708,360

(Decrease)/increase in cash and cash equivalents

(504,996

)

869,902

Cash and cash equivalents at beginning of year

2

1,024,571

154,669

Cash and cash equivalents at end of year

2

519,575

1,024,571

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.12.24

31.12.23

£

£

Loss before taxation

(2,305,812

)

(3,752,422

)

Depreciation charges

1,113,432

818,331

Loss on disposal of fixed assets

-

261

Impairment of fixed assets

4,754,076

-

Finance costs

50,662

34,604

3,612,358

(2,899,226

)

Increase in stocks

(219,766

)

(695,777

)

Increase in trade and other debtors

(217,702

)

(1,440,864

)

Increase in trade and other creditors

948,593

4,122,141

Cash generated from operations

4,123,483

(913,726

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

519,575

1,024,571

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

1,024,571

330,287

Bank overdrafts

-

(175,618

)

1,024,571

154,669

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

1,024,571

(504,996

)

519,575

1,024,571

(504,996

)

519,575

Debt

Debts falling due within 1 year

(10,000

)

-

(10,000

)

Debts falling due after 1 year

(4,017,384

)

(2,990,281

)

(7,007,665

)

(4,027,384

)

(2,990,281

)

(7,017,665

)

Total

(3,002,813

)

(3,495,277

)

(6,498,090

)

1.	STATUTORY INFORMATION

Impact Recycling Limited is a private company, limited by shares, domiciled in Scotland, registration number SC489143. The registered office is 100 Inchinnan Road, Bellshill Industrial Estate, Bellshill, ML4 3NT.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the company and all group undertakings. These are adjusted, where appropriate, to conform to group accounting policies. Acquisitions are accounted for under the acquisition method and goodwill on consolidation is capitalised and written off over five years from the year of acquisition. The results of companies acquired or disposed of are included in the profit and loss account after or up to the date that control passes respectively. As a consolidated profit and loss account is published, a separate profit and loss account for the parent company is omitted from the group financial statements by virtue of section 408 of the Companies Act 2006.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Turnover

Turnover represents net invoiced sales of goods and services in respect of scientific research, product development and testing, business development and waste plastic recycling excluding value added tax. Sales are recognised at the point at which the goods are delivered or the service is complete.

Tangible fixed assets and depreciation

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Short leasehold

-

10% on cost

Plant and machinery

-

14% on cost and 14% on cost

Fixtures and fittings

-

20% on cost

Motor vehicles

-

25% on cost

Computer equipment

-

33% on cost and 20% on cost

Tangible fixed assets are stated at cost less depreciation. Cost represent purchase price together with any incidental costs of acquisition.

The directors have considered the residual value of all tangible fixed assets to be immaterial and therefore all tangible fixed assets are depreciated to nil value.

Government grants

Grants are recognised in income when the grant proceeds are received or receivable provided that the terms of the grant do not impose future performance-related conditions. If the terms of a grant do impose performance-related conditions on the recipient, the grant is only recognised in income when the performance-related conditions are met. Any grants that are received before the revenue recognition criteria are met are recognised in the entity’s financial statements as a liability.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost is represented by purchase price.