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Registered number: 10899695 MERPAS (UK) LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
MERPAS (UK) LIMITED COMPANY INFORMATION
Directors | Fadi Freiha
| Edgard Frem
Registered number | 10899695
Registered office | Building 4
| Foundation Park
| Roxborough Way
| Maidenhead
| SL6 3UD
Independent auditor | MHA
| Building 4
| Foundation Park
| Roxborough Way
| Maidenhead
| SL6 3UD
MERPAS (UK) LIMITED CONTENTS
| Page
Group Strategic Report | 1 - 2
Directors' Report | 3 - 4
Independent Auditor's Report | 5 - 8
Consolidated Statement of Comprehensive Income | 9
Consolidated Statement of Financial Position | 10 - 11
Company Statement of Financial Position | 12
Consolidated Statement of Changes in Equity | 13 - 14
Company Statement of Changes in Equity | 15
Consolidated Statement of Cash Flows | 16 - 17
Consolidated Analysis of Net Debt | 18
Notes to the Financial Statements | 19 - 46
MERPAS (UK) LIMITED GROUP STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2024
Introduction
The directors present their strategic report together with the financial statements for the year ended 31 December 2024.
Business review
Merpas (UK) Limited, through its Subsidiaries (the “Group”) is active in various industries both in North America and in Europe. Through its US operations, the Group is a leading supplier of plastic packaging (heavy duty sacks, FFS film, sealant film, stretch hood film and shrink building film), flexible packaging and Building Products. Our experienced management, operations, and sales teams introduce innovations to optimize their product offerings, drive sustainability initiatives, and reinforce the group’s leadership position in the industry.
Principal risks and uncertainties
The slow down of the economy in the US and the impact that this would have on capital allocation decisions and further, on the valuation of the US entities. The expansion into Europe and the risks associated with such expansion; including, but not limited to, the continued risk as a result of the Brexit decision, the rising cost of energy prices, the challenges related to the economic slow-down in Europe. Despite these risks, the directors are confident in the Group’s prospects and financial strength.
Future developments of the business
We continue to support the growth of the US operations Indevco North America (“INA”) through the expansion of the current manufacturing capabilities as well as the acquisition of equipment. In Europe, we plan to continue investing in new manufacturing ventures throughout continental Europe, in the field of plastic films (and their derivatives), flexible packaging as well as paper and corrugated packaging.
Directors' statement of compliance with duty to promote the success of the Group
The Board of Directors always consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its employees and shareholders as a whole, having regard to the stakeholders and matters set out in s172(1) (a) - (f) of the Companies Act 2006, in the decisions taken during the year ended 31 December 2024. We have a one-year strategic business plan, designed to address the challenges we see in the current economic environment and set the Group for continued growth and future expansion. The plan is further designed to continue ensuring the long term beneficial impact of the Group’s activities and operations on its stakeholders, and to contribute to its success in delivering a high quality of service across all of its business divisions. We put people at the centre of everything we do and we embrace innovation and technology to be sustainable leaders in our chosen fields. Engagement with suppliers and customers is also key to our success. As the Board of Directors, our intention is to behave in a responsible manner, operating within the high standards of business conduct and good governance expected for a business such as ours and in doing so, will contribute to the delivery of our plan. The intention is to nurture our reputation, through both construction and delivery of our plan, that reflects our values, beliefs and culture. As the Board of Directors, our intention is to behave responsibly towards all our enlightened shareholders and Page 1
MERPAS (UK) LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 treat them fairly and equally, so they too may benefit from the successful delivery of our plan. This report was approved by the board and signed on its behalf.
................................................ Fadi Freiha Director
Date: 17 March 2026
Page 2
MERPAS (UK) LIMITED DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 The directors present their report and the financial statements for the year ended 31 December 2024.
Directors' responsibilities statement
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Group's financial statements and then 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; ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Results and dividends
The loss for the year, after taxation and minority interests, amounted to $4,705 thousand (2023 - loss $190,802 thousand). The directors have not recommended or paid a dividend for the year (2023 - $112,283 thousand).
Directors
The directors who served during the year were:
Fadi Freiha
Edgard Frem
Greenhouse gas emissions, energy consumption and energy efficiency action
The Group has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as Merpas (UK) Limited's energy consumption in the United Kingdom for the year is 40,000kWh or lower, by virtue of it's trade. No further Group entity is required to be included in the report due to the exemptions applicable to overseas entities and those subsidiaries which would not be obliged to report individually themselves. Page 3
MERPAS (UK) LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and ∙the director has 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 and the Group's auditor is aware of that information.
Auditor
The auditor, MHA, previously traded through the legal entity MacIntyre Hudson LLP. In response to regulatory changes, MacIntyre Hudson LLP ceased to hold an audit registration with the engagement transitioning to MHA Audit Services LLP. MHA will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. This report was approved by the board and signed on its behalf.
................................................ Fadi Freiha Director
Date: 17 March 2026
Page 4
MERPAS (UK) LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MERPAS (UK) LIMITED
Opinion
We have audited the financial statements of Merpas (UK) Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Analysis of Net Debt, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, 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'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's 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 United Kingdom, including the Financial Reporting Council'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 or 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. Page 5
MERPAS (UK) LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MERPAS (UK) LIMITED (CONTINUED)
Other information
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinion 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and ∙the Group Strategic Report and the 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 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 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 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. Page 6
MERPAS (UK) LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MERPAS (UK) LIMITED (CONTINUED)
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 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.
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 Group financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: ∙enquiry of management, those charged with governance around actual and potential litigation and claims; ∙performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias; ∙reviewing minutes of meetings of those charged with governance; ∙reviewing financial statement disclosures and testing to supporting documentation to asses compliance with applicable laws and regulations; and ∙maintaining professional skepticism throughout the course of our audit work. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities 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. Page 7
MERPAS (UK) LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MERPAS (UK) LIMITED (CONTINUED)
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. Katharine Arnott BSc FCA (Senior Statutory Auditor) for and on behalf of MHA Statutory Auditor Maidenhead, United Kingdom 20 March 2026 MHA is the trading name of MHA Audit Services LLP, a limited liability partnership in England and Wales (registered number OC455542). Page 8
MERPAS (UK) LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024
|  | As restated
| 2024 | 2023
Note | $000 | $000
Turnover | 3 | 219,737 | 214,692
Cost of sales |  | (184,510) | (183,725)
Gross profit |  | 35,227 | 30,967
Administrative expenses |  | (34,605) | (56,005)
Other operating income | 4 | 1,265 | 8,744
Other operating charges |  | - | (748)
Operating profit/(loss) | 5 | 1,887 | (17,042)
Share of profit of associates |  | (2,678) | (10,325)
Income from fixed assets investments |  | 77 | 3,133
Profit/(loss) on disposal of investments |  | 189 | (163,752)
Interest receivable and similar income | 9 | 2,279 | 2,774
Interest payable and similar expenses | 10 | (6,682) | (6,466)
Loss before taxation |  | (4,928) | (191,678)
Tax on loss | 11 | 998 | 1,463
Loss for the financial year |  | (3,930) | (190,215)
Currency translation differences |  | 2,271 | -
Total comprehensive income for the year |  | (1,659) | (190,215)
(Loss) for the year attributable to: |  |  |
Non-controlling interests |  | 775 | 587
Owners of the Parent Company |  | (4,705) | (190,802)
|  | (3,930) | (190,215)
There were no recognised gains and losses for 2024 or 2023 other than those included in the consolidated statement of comprehensive income.
The notes on pages 19 to 46 form part of these financial statements.
Page 9
MERPAS (UK) LIMITED REGISTERED NUMBER: 10899695 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024
|  |  |  | As restated
|  | 2024 |  | 2023
Note |  | $000 |  | $000
Fixed assets |  |  |  |  |
Intangible assets | 13 |  | 30,862 |  | 35,354
Tangible assets | 14 |  | 73,601 |  | 81,582
Investments | 15 |  | 887 |  | 779
|  |  | 105,350 |  | 117,715
Current assets |  |  |  |  |
Stocks | 16 | 27,418 |  | 23,548 |
Debtors | 17 | 36,041 |  | 50,223 |
Cash at bank and in hand | 18 | 3,015 |  | 3,434 |
|  | 66,474 |  | 77,205 |
Creditors: amounts falling due within one year | 19 | (52,368) |  | (63,765) |
Net current assets |  |  | 14,106 |  | 13,440
Total assets less current liabilities |  |  | 119,456 |  | 131,155
Creditors: amounts falling due after more than one year | 20 |  | (33,124) |  | (42,016)
Provisions for liabilities |  |  |  |  |
Deferred taxation | 23 | - |  | (294) |
|  |  | - |  | (294)
Net assets |  |  | 86,332 |  | 88,845
Capital and reserves |  |  |  |  |
Called up share capital | 24 |  | 38,323 |  | 38,323
Revaluation reserve | 25 |  | 8 |  | 8
Capital redemption reserve | 25 |  | 7,433 |  | 7,433
Merger reserve | 25 |  | (9,606) |  | (9,606)
Profit and loss account | 25 |  | 42,816 |  | 45,250
Equity attributable to owners of the Parent Company |  |  | 78,974 |  | 81,408
Non-controlling interests |  |  | 7,358 |  | 7,437
|  |  | 86,332 |  | 88,845
Page 10
MERPAS (UK) LIMITED REGISTERED NUMBER: 10899695 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED) AS AT 31 DECEMBER 2024 The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
................................................ Fadi Freiha
Director
Date: 17 March 2026
The notes on pages 19 to 46 form part of these financial statements. Page 11
MERPAS (UK) LIMITED REGISTERED NUMBER: 10899695 COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024
|  | 2024 |  | 2023
Note |  | $000 |  | $000
Fixed assets |  |  |  |  |
Investments | 15 |  | 108,428 |  | 107,980
|  |  | 108,428 |  | 107,980
Current assets |  |  |  |  |
Debtors | 17 | 42,072 |  | 42,484 |
Cash at bank and in hand | 18 | 4 |  | 44 |
|  | 42,076 |  | 42,528 |
Creditors: amounts falling due within one year | 19 | (1,173) |  | (10,162) |
Net current assets |  |  | 40,903 |  | 32,366
Total assets less current liabilities |  |  | 149,331 |  | 140,346
Net assets |  |  | 149,331 |  | 140,346
Capital and reserves |  |  |  |  |
Called up share capital | 24 |  | 38,323 |  | 38,323
Revaluation reserve | 25 |  | 5 |  | 5
Capital redemption reserve | 25 |  | 7,433 |  | 7,433
Profit and loss account brought forward |  | 94,586 |  | 238,689 |
Profit/(loss) for the year |  | 8,984 |  | (36,826) |
Other changes in the profit and loss account |  | - |  | (107,277) |
Profit and loss account carried forward |  |  | 103,570 |  | 94,585
|  |  | 149,331 |  | 140,346
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
................................................ Fadi Freiha
Director
Date: 17 March 2026
The notes on pages 19 to 46 form part of these financial statements. Page 12

|  | MERPAS (UK) LIMITED |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
|  | Called up share capital | Capital redemption reserve | Revaluation reserve | Merger reserve | Profit and loss account | Equity attributable to owners of Parent Company | Non-controlling interests | Total equity
|  | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000
| At 1 January 2023 (as previously stated) | 38,323 | 7,433 | 8 | (9,606) | 212,694 | 248,852 | 142,696 | 391,548
| Prior year adjustment - correction of error | - | - | - | - | (4,471) | (4,471) | - | (4,471)
| At 1 January 2023 (as restated) | 38,323 | 7,433 | 8 | (9,606) | 208,223 | 244,381 | 142,696 | 387,077
| Profit/(loss) for the year | - | - | - | - | (190,802) | (190,802) | 587 | (190,215)
| Dividends paid | - | - | - | - | (112,283) | (112,283) | - | (112,283)
| Removal of NCI on disposal of Merpas Hungary | - | - | - | - | 140,112 | 140,112 | (140,112) | -
| NCI on acquisition of Leclair Industries, Inc. | - | - | - | - | - | - | 4,265 | 4,265
| At 1 January 2024 | 38,323 | 7,433 | 8 | (9,606) | 45,250 | 81,408 | 7,436 | 88,844
| Profit/(loss) for the year | - | - | - | - | (4,705) | (4,705) | 775 | (3,930)
| Currency translation differences | - | - | - | - | 2,271 | 2,271 | - | 2,271
| Repurchase of shares | - | - | - | - | - | - | (853) | (853)
| At 31 December 2024 | 38,323 | 7,433 | 8 | (9,606) | 42,816 | 78,974 | 7,358 | 86,332
Page 13

|  | MERPAS (UK) LIMITED |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
| The notes on pages 19 to 46 form part of these financial statements.
Page 14

MERPAS (UK) LIMITED COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
| Called up share capital | Capital redemption reserve | Revaluation reserve | Profit and loss account | Total equity
| $000 | $000 | $000 | $000 | $000
At 1 January 2023 | 38,323 | 7,433 | 5 | 238,689 | 284,450
Loss for the year | - | - | - | (36,826) | (36,826)
Dividends paid | - | - | - | (107,277) | (107,277)
At 1 January 2024 | 38,323 | 7,433 | 5 | 94,586 | 140,347
Profit for the year | - | - | - | 8,984 | 8,984
At 31 December 2024 | 38,323 | 7,433 | 5 | 103,570 | 149,331
| The notes on pages 19 to 46 form part of these financial statements.
Page 15
MERPAS (UK) LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024
|  |  | 2024 | 2023
|  |  | $000 | $000
Cash flows from operating activities |  |
Loss for the financial year | (3,930) | (190,215)
Adjustments for: |  |
Amortisation of intangible assets | 5,569 | 4,823
Depreciation of tangible assets | 11,281 | 8,878
Loss on disposal of tangible assets | 79 | 744
Interest paid | 6,682 | 6,466
Interest received | (2,356) | (5,907)
Taxation charge | (998) | (1,463)
(Increase) in stocks | (3,870) | (441)
Decrease/(increase) in debtors | 12,137 | (10,002)
(Decrease) in creditors | (1,995) | (10,711)
Net fair value (gains)/losses recognised in P&L | (8,521) | 163,752
Share of operating profit in associates | 2,678 | 10,325
Corporation tax (paid) | (1,120) | (557)
Net cash generated from operating activities | 15,636 | (24,308)
Cash flows from investing activities |  |
Purchase of intangible fixed assets | (1,057) | (441)
Purchase of tangible fixed assets | (3,802) | (18,750)
Sale of tangible fixed assets | (59) | 585
Purchase of listed investments | - | (30,044)
Sale of listed investments | - | 68,978
Purchase of fixed asset investments | (82) | (46,108)
Sale of fixed asset investments | - | 113,386
Purchase of share in associates | (2,786) | (815)
Sale of share in associates | - | 338
Interest received | 2,279 | 2,774
Income from investments | 77 | 1,852
Dividends received | - | 1,281
Repurchase of shares in subsidiary | (853) | -
Net cash from investing activities | (6,283) | 93,036
Page 16
MERPAS (UK) LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
|  | 2024 | 2023
|  | $000 | $000
Cash flows from financing activities |  |
Proceeds on bank loans | - | 24,086
Repayment of bank loans | (5,845) | -
Proceeds on other loans | - | 1,709
Repayment of other loans and finance leases | (4,421) | -
Dividends paid | - | (112,283)
Interest paid | (6,682) | (6,466)
Net cash used in financing activities | (16,948) | (92,954)
Net (decrease) in cash and cash equivalents | (7,595) | (24,226)
Cash and cash equivalents at beginning of year | (6,332) | 17,894
Foreign exchange gains and losses | 2,271 | -
Cash and cash equivalents at the end of year | (11,656) | (6,332)
Cash and cash equivalents at the end of year comprise: |  |
Cash at bank and in hand | 3,015 | 3,434
Bank overdrafts | (14,671) | (9,766)
| (11,656) | (6,332)
The notes on pages 19 to 46 form part of these financial statements.
Page 17
MERPAS (UK) LIMITED CONSOLIDATED ANALYSIS OF NET DEBT FOR THE YEAR ENDED 31 DECEMBER 2024
| At 1 January 2024 | Cash flows | At 31 December 2024
| $000 | $000 | $000
Cash at bank and in hand | 3,434 | (419) | 3,015
Bank overdrafts | (9,765) | (4,905) | (14,670)
Debt due after 1 year | (30,614) | 6,082 | (24,532)
Debt due within 1 year | (6,569) | (237) | (6,806)
Finance leases | (14,456) | 4,421 | (10,035)
| (57,970) | 4,942 | (53,028)
The notes on pages 19 to 46 form part of these financial statements.
Page 18
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
1. | General information
Merpas (UK) Limited is a private company limited by shares incorporated in England and Wales, registration number 10899695. The principal activities of the Group during the year were that of investment and a supplier of heavy duty sacks, FFS film, sealant film, stretch hood film & shrink bundling film. 2.Accounting policies
| 2.1 | Basis of preparation of financial statements
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 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies. The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
| 2.2 | Basis of consolidation
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. Page 19
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.3 | Associates and joint ventures
An entity is treated as a joint venture where the Group is a party to a contractual agreement with one or more parties from outside the Group to undertake an economic activity that is subject to joint control. An entity is treated as an associated undertaking where the Group exercises significant influence in that it has the power to participate in the operating and financial policy decisions. In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated Statement of Comprehensive Income includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated Statement of Financial Position, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition. Any premium on acquisition is dealt with in accordance with the goodwill policy. Page 20
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.4 | Going concern
The Directors have assessed the appropriateness of preparing the financial statements on a going concern basis. In making this assessment, the Directors have considered the Group’s financial position, cash flow forecasts, available financing facilities and the principal risks that may impact the Group’s performance. The Directors have prepared cash flow forecasts covering a period of at least twelve months from the date of approval of these financial statements. These forecasts incorporate management’s expectations of trading performance across the Group’s operations and include assumptions regarding revenue growth, operating margins, capital expenditure and working capital requirements. The Group finances its operations through a combination of operating cash flows and external borrowing facilities. The Group has a number of banking arrangements, including revolving credit and term loan facilities, which provide liquidity to support the Group’s operational and investment activities. These facilities are subject to financial covenants which are monitored by management on a regular basis. Based on the forecasts prepared, the Directors expect the Group to remain in compliance with these covenants for the foreseeable future. In preparing the forecasts, the Directors have also considered reasonably possible downside scenarios, including reductions in revenue and margin pressures. Under these scenarios, the forecasts indicate that the Group would continue to have sufficient liquidity to meet its obligations as they fall due. The Directors have also considered the broader economic environment in which the Group operates, including potential impacts arising from economic conditions in the Group’s principal markets. The forecasts reflect management’s best estimates of the potential impact of these factors. Based on the above assessment, the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing these financial statements. Page 21
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.5 | Foreign currency translation
Functional and presentation currency The Company's functional and presentational currency is US Dollars. Transactions and balances Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. 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. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. On consolidation, the results of overseas operations are translated into US Dollars at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income. Page 22
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.6 | Revenue
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised: Sale of goods Turnover from the sale of goods is recognised when all of the following conditions are satisfied: ∙the Group has transferred the significant risks and rewards of ownership to the buyer; ∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; ∙the amount of turnover can be measured reliably; ∙it is probable that the Group will receive the consideration due under the transaction; and ∙the costs incurred or to be incurred in respect of the transaction can be measured reliably. Rendering of services Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied: ∙the amount of turnover can be measured reliably; ∙it is probable that the Group will receive the consideration due under the contract; ∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and ∙the costs incurred and the costs to complete the contract can be measured reliably.
| 2.7 | Operating leases: the Group as lessee
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
| 2.8 | Finance costs
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. Page 23
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.9 | Pensions
Defined contribution pension plan The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
| 2.10 | Interest income
Interest income is recognised in profit or loss using the effective interest method.
| 2.11 | Borrowing costs
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
| 2.12 | Current and deferred taxation
The tax expense for the year comprises current and deferred tax. 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. 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 and the Group operate and generate income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that: ∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; ∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and ∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date. Page 24
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.13 | Intangible assets
Goodwill Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life. Other intangible assets 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. All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years. The estimated useful lives range as follows:
|  |  |  | Goodwill | - | 10 | years
| 2.14 | Tangible fixed assets
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. The estimated useful lives range as follows:
|  |  |  | Long-term leasehold property | - | 25 years
|  |  |  | Plant and machinery | - | 5-10 years
|  |  |  | Motor vehicles | - | 5-10 years
|  |  |  | Office equipment | - | 5-10 years
|  |  |  | Computer equipment | - | 5-10 years
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. Assets in transit and under construction are added to the list of fixed assets but are not depreciated until they have been brought into use. They are included within the category of assets for which the item would otherwise belong. Page 25
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.15 | Impairment of fixed assets and goodwill
Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
| 2.16 | Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment. Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each reporting date. Gains and losses on remeasurement are recognised in the Consolidated Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
| 2.17 | Stocks
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 weighted average basis. Work in progress and finished goods include labour and attributable overheads. 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.
| 2.18 | Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
| 2.19 | Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management. Page 26
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.20 | Creditors
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
| 2.21 | Financial instruments
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments. Financial instruments are recognised in the Group's Statement of Financial Position when the Group becomes party to the contractual provisions of the instrument. Basic financial assets Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments. Basic financial liabilities Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities. Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. Page 27
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.22 | Provisions for liabilities
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made. Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties. Increases in provisions are generally charged as an expense to profit or loss.
| 2.23 | Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
3. | Turnover
| An analysis of turnover by class of business is as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Paper coating division | 173,939 | 176,311
| Plastics division | 45,798 | 38,381
|  | 219,737 | 214,692
Analysis of turnover by country of destination:
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| United Kingdom | 35,669 | 30,833
| Rest of the world | 184,068 | 183,859
|  | 219,737 | 214,692
4. | Other operating income
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Other operating income | 1,265 | 8,744
Page 28
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
5. | Operating loss
| The operating loss is stated after charging:
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Exchange differences | 60 | 2,421
| Other operating lease rentals | 97 | -
6. | Auditor's remuneration
| During the year, the Group obtained the following services from the Company's auditor and its associates:
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements | 92 | 89
| Fees payable to the Group's auditor and its associates in respect of: |  |
| All non-audit services not included above | 17 | 16
Page 29
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
7. | Employees
| Staff costs, including directors' remuneration, were as follows:
|  | Group | Group
|  | 2024 | 2023
|  | $000 | $000
| Wages and salaries | 32,837 | 29,341
| Social security costs | 2,769 | 2,359
| Cost of defined contribution scheme | 1,197 | 949
|  | 36,803 | 32,649
| The average monthly number of employees, including the directors, during the year was as follows:
|  |  | Group | Group | Company | Company
|  |  | 2024 | 2023 | 2024 | 2023
|  |  | No. | No. | No. | No.
|  | Directors | 2 | 2 | 2 | 2
|  | Employees | 575 | 575 | - | -
|  |  | 577 | 577 | 2 | 2
| The Directors did not receive any remuneration during the period (2023 - $NIL)
8. | Income from investments
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Income from fixed asset investments | (77) | (1,852)
| Dividends received from unlisted investments | - | (1,281)
9. | Interest receivable
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Other interest receivable | 2,279 | 2,774
Page 30
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
10. | Interest payable and similar expenses
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Bank interest payable | 34 | 45
| Other loan interest payable | 6,648 | 5,307
| Loans from group undertakings | - | 1,114
|  | 6,682 | 6,466
11. | Taxation
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Corporation tax |  |
| Current tax on profits for the year | 9 | 408
| Adjustments in respect of previous periods | 1,220 | 1,246
| Total current tax | 1,229 | 1,654
| Deferred tax |  |
| Origination and reversal of timing differences | (2,227) | (3,117)
| Total deferred tax | (2,227) | (3,117)
|  | (998) | (1,463)
Page 31
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 11.Taxation (continued)
| Factors affecting tax charge for the year
| The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 23.5%). The differences are explained below:
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Loss on ordinary activities before tax | (4,929) | (191,678)
| Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 23.5%) | (1,232) | (45,044)
| Effects of: |  |
| Expenses not deductible for tax purposes | (399) | 41,030
| Adjustments in respect of prior periods | - | 1,246
| State taxation | - | 403
| Non-taxable income | (144) | (301)
| Impact of overseas tax rates | 400 | 474
| Impact of disposal of shares | - | 405
| Amounts not recognised | 377 | 324
| Total tax charge for the year | (998) | (1,463)
| Factors that may affect future tax charges
There were no factors that may affect future tax charges. Page 32
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
12. | Dividends
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Dividends on ordinary shares | - | 112,283
13. | Intangible assets
| Group
|  | Trademarks | Goodwill | Total
|  | $000 | $000 | $000
| Cost |  |  |
| At 1 January 2024 | 9,700 | 41,757 | 51,457
| Additions | - | 1,057 | 1,057
| On acquisition of subsidiaries | 20 | - | 20
| At 31 December 2024 | 9,720 | 42,814 | 52,534
| Amortisation |  |  |
| At 1 January 2024 | 647 | 15,456 | 16,103
| Charge for the year | 1,293 | 4,276 | 5,569
| At 31 December 2024 | 1,940 | 19,732 | 21,672
| Net book value |  |  |
| At 31 December 2024 | 7,780 | 23,082 | 30,862
| At 31 December 2023 | 9,053 | 26,301 | 35,354
Page 33
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
14. | Tangible fixed assets
| Group
|  | Long-term leasehold property | Plant and machinery | Motor vehicles | Fixtures and fittings | Office equipment
|  | $000 | $000 | $000 | $000 | $000
| Cost |  |  |  |  |
| At 1 January 2024 | 36,131 | 81,733 | 532 | 25 | 1,417
| Additions | 121 | 3,378 | 30 | - | 95
| Acquisition of subsidiary | - | 23 | - | - | 38
| Disposals | - | - | (33) | - | -
| Exchange adjustments | (75) | (637) | - | - | (7)
| At 31 December 2024 | 36,177 | 84,497 | 529 | 25 | 1,543
| Depreciation |  |  |  |  |
| At 1 January 2024 | 6,113 | 30,799 | 335 | 10 | 1,275
| Charge for the year | 2,190 | 8,788 | 107 | 8 | 83
| Disposals | - | - | (13) | - | -
| Exchange adjustments | (13) | (161) | - | - | (6)
| At 31 December 2024 | 8,290 | 39,426 | 429 | 18 | 1,352
| Net book value |  |  |  |  |
| At 31 December 2024 | 27,887 | 45,071 | 100 | 7 | 191
| At 31 December 2023 | 30,018 | 50,934 | 197 | 15 | 142
Page 34
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 14.Tangible fixed assets (continued)
|  | Computer equipment | Total
|  | $000 | $000
| Cost |  |
| At 1 January 2024 | 776 | 120,614
| Additions | 178 | 3,802
| Acquisition of subsidiary | - | 61
| Disposals | - | (33)
| Exchange adjustments | (5) | (724)
| At 31 December 2024 | 949 | 123,720
| Depreciation |  |
| At 1 January 2024 | 500 | 39,032
| Charge for the year | 108 | 11,284
| Disposals | - | (13)
| Exchange adjustments | (4) | (184)
| At 31 December 2024 | 604 | 50,119
| Net book value |  |
| At 31 December 2024 | 345 | 73,601
| At 31 December 2023 | 276 | 81,582
| The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
| Plant and machinery | 8,806 | 8,806
Page 35
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
15. | Fixed asset investments
| Group
|  | Investments in associates
|  | $000
| Cost or valuation |
| At 1 January 2024 | 779
| Additions | 2,786
| Share of profit/(loss) | (2,678)
| At 31 December 2024 | 887
| Net book value |
| At 31 December 2024 | 887
| At 31 December 2023 | 779
Page 36
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
| Company
|  | Investments in subsidiary companies
|  | $000
| Cost or valuation |
| At 1 January 2024 | 122,978
| Additions | 1,000
| At 31 December 2024 | 123,978
| Impairment |
| At 1 January 2024 | 14,998
| Charge for the period | 552
| At 31 December 2024 | 15,550
| Net book value |
| At 31 December 2024 | 108,428
| At 31 December 2023 | 107,980
| Direct subsidiary undertakings
| The following were direct subsidiary undertakings of the Company:
| Name | Registered office | Principal activity | Class of shares | Holding
| Indevco North America, Inc | USA | 800 Jordan Valley Road, Longview, Texas, 75604 | Ordinary | 100%
| Merpas Co. S.a.r.l. | Luxembourg | 6 Rue Jean Monnet, 2180 Luxembourg | Ordinary | 100%
| Alesia Hungary Limited Liability Company | Hungary | 1062 Budapest, Vaci ut 1-3., "A" torony, 6.em. | Ordinary | 100%
| ePac Holdings Europe Limited | UK | Creative Industry Centre, University of Wolverhampton Science Park, Wolverhampton WV10 9TG | Ordinary | 100%
| ECCITY |  |  | Ordinary | 90%
Page 37
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
| Indirect subsidiary undertakings
| The following were indirect subsidiary undertakings of the Company:
| Name | Region | Registered Office | Class of shares | Holding
| Indevco Recycling, LLC | USA | 715 Prosperity Dr, Orangeburg SC 29115 | Ordinary | 100%
| Indevco Alternative Energy, Inc. | USA | 10351 Verdon Road, Doswell VA 23047 | Ordinary | 100%
| Indevco Plastics, LLC | USA | 715 Prosperity Dr, Orangeburg SC 29115 | Ordinary | 100%
| Indevco Plastics Orangeburg, LLC | USA | 715 Prosperity Dr, Orangeburg SC 29115 | Ordinary | 100%
| Indevco Plastics Longview, LLC | USA | 800 Jordan Valley Road, Longview, Texas, 75604 | Ordinary | 100%
| Indevco Paper, LLC | USA |  | Ordinary | 100%
| Specialty Coating & Laminating, LLC | USA | 10351 Verdon Rd, Doswell, VA 23047, United States | Ordinary | 98%
| Indevco Flexible Products, LLC | USA | 10351 Verdon Road, Doswell VA 23047 | Ordinary | 98%
| Indevco Building Products, LLC | USA | 10351 Verdon Road, Doswell VA 23047 | Ordinary | 98%
| ePac Lyon SAS | France | 5 Avenue de Chantereine, 38300 Bourgoin-Jalieu, France | Ordinary | 83%
| ePac UK Silverstone Limited | UK | Creative Industries Centre, Wolverhampton Science Park, Glaisher Drive,Wolverhampton, WV10 9TG | Ordinary | 64%
| ePac UK Sheffield Limited | UK | Creative Industries Centre, Wolverhampton Science Park, Glaisher Drive,Wolverhampton, WV10 9TG | Ordinary | 91%
| ePac GmbH | Austria | Tuchlauben 8/1. OG.1010 Vienna, Austria | Ordinary | 91%
| ePac Poland sp. Z.o.o* | Poland | ul. SW. Mikolaja 7, 50-125 Wroclaw, Poland | Ordinary | 45%
| LeClair Industries, Inc. | USA | 2604 Sunset Dr, Grenada MS 38901 | Ordinary | 90.8%
| Perma R Products Inc. | USA | 2604 Sunset Dr, Grenada MS 38901 | Ordinary | 90%
| Perma “R” Products Inc. of Tennessee | USA | 106 Perma R Rd, Johnson City TN 37604 | Ordinary | 90%
| Perma “R” Products of Georgia Inc. | USA | 606 Old Quitman Road, Adel GA 31620 | Ordinary | 90%
Page 38
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 Indirect subsidiary undertakings (continued)
| *ePac Poland sp. Z.o.o is deemed to be a subsidiary by virtue of ePac Holdings Europe Limited having overall control and full voting rights.
| Associates
| The following were associates of the Company:
| Name | Registered office | Class of shares | Holding
| ePac Austin, LLC | USA | Ordinary | 60%
| ePac Philadelphia, LLC | USA | Ordinary | 60%
| ePac Longview, LLC | USA | Ordinary | 60%
| ePac Louisville, LLC | USA | Ordinary | 60%
| ePac Holdings, LLC | USA | Ordinary | 42%
| The entities listed above are held as associates in these consolidated financial statements and are not consolidated as subsidiary undertakings due to Indevco North America, Inc. not holding the required 72% super-majority to establish control.
Page 39
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
16. | Stocks
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | $000 | $000 | $000 | $000
| Raw materials and consumables | 6,623 | 5,047 | - | -
| Work in progress (goods to be sold) | 389 | 3,497 | - | -
| Finished goods and goods for resale | 20,406 | 15,004 | - | -
|  | 27,418 | 23,548 | - | -
| The difference between purchase price or production cost of stocks and their replacement cost is not material.
17. | Debtors
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | $000 | $000 | $000 | $000
| Due within one year |  |  |  |
| Trade debtors | 23,062 | 28,397 | - | -
| Amounts owed by group undertakings | - | 1,378 | 41,049 | 32,846
| Amounts owed by joint ventures and associated undertakings | 4,374 | 4,742 | - | -
| Other debtors | 1,595 | 5,152 | - | 14
| Prepayments and accrued income | 5,322 | 2,475 | 819 | 274
| Tax recoverable | 51 | - | 51 | 1,271
| Deferred taxation | 1,484 | - | - | -
| Financial instruments | 153 | 8,079 | 153 | 8,079
|  | 36,041 | 50,223 | 42,072 | 42,484
18. | Cash and cash equivalents
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | $000 | $000 | $000 | $000
| Cash at bank and in hand | 3,015 | 3,434 | 4 | 44
| Less: bank overdrafts | (14,670) | (9,765) | - | -
|  | (11,655) | (6,331) | 4 | 44
Page 40
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
19. | Creditors: Amounts falling due within one year
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | $000 | $000 | $000 | $000
| Bank overdrafts | 14,670 | 9,765 | - | -
| Bank loans | 5,849 | 6,349 | - | -
| Other loans | 957 | 220 | - | -
| Trade creditors | 16,576 | 16,613 | 440 | 583
| Amounts owed to non-consolidated group undertakings | - | 3,207 | 353 | 781
| Corporation tax | 9 | 419 | - | -
| Other taxation and social security | 1,119 | 3,521 | - | -
| Obligations under finance lease and hire purchase contracts | 1,628 | 4,442 | - | -
| Other creditors | 2,410 | 1,717 | - | -
| Accruals and deferred income | 9,150 | 8,976 | 380 | 262
| Financial instruments | - | 8,536 | - | 8,536
|  | 52,368 | 63,765 | 1,173 | 10,162
20. | Creditors: Amounts falling due after more than one year
|  | Group | Group As restated
|  | 2024 | 2023
|  | $000 | $000
| Bank loans | 24,532 | 30,614
| Net obligations under finance leases and hire purchase contracts | 8,407 | 10,014
| Other creditors | 185 | 1,388
|  | 33,124 | 42,016
Details of the terms of any security given, payment or repayment and the rates of any interest payable on the amounts repayable more than five years after the reporting date are provided in Note 21. Page 41
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
21. | Loans
| Analysis of the maturity of loans is given below:
|  | Group | Group
|  | 2024 | 2023
|  | $000 | $000
| Amounts falling due within one year |  |
| Bank loans | 5,849 | 6,349
| Other loans | 957 | 220
| Amounts falling due 1-2 years |  |
| Bank loans | 4,405 | 6,349
| Amounts falling due 2-5 years |  |
| Bank loans | 20,127 | 24,265
| Amounts falling due after more than 5 years |  |
|  | 31,338 | 37,183
Page 42
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 21.Loans (continued)
| Revolving Credit Facility On July 20, 2018, the Group entered into a revolving credit agreement with a financial institution, which provided for borrowings up to $15,000,000. The revolving credit facility matures on July 20, 2023 and is collateralized by tangible assets and is subject to fixed charge covenant ratios. Interest is payable monthly at LIBOR plus applicable margin based on the fixed charge coverage ratio. With the third amendment agreement dated June 15, 2022, LIBOR was replaced with SOFR plus applicable margin based on the maximum debt to adjusted EBITDA, which was 6.73% and 7.73% as of December 31, 2024 and 2023, respectively. The revolving credit facility is classified as current due to its sweep feature. In 2022, the proceeds of the parent company subordinated loan for $20,000,000 were used to zero the revolver, and the $15,456,576 debit balance of the account is included in the cash and cash equivalents in the consolidated balance sheet as of December 31, 2024. With the fourth amendment agreement dated January 6, 2023, the maturity date of the revolver was extended to July 20, 2026 and the maximum revolving advance amount was increased to $20,000,000. Term Loan On July 20, 2018, the Company received a $10,000,000 term loan bearing interest at LIBOR plus applicable margin based on the fixed charge coverage ratio. With the third amendment agreement dated June 15, 2022, LIBOR was replaced with SOFR based on the maximum debt to adjusted EBITDA ratio. The effective interest rate as of December 31, 2024 and 2023 was 6.73% and 7.73%, respectively. With the fourth amendment agreement dated January 6, 2023, the Company received an additional $17,000,000 term loan bearing interest at SOFR plus 2.42%, maturing on July 20, 2026. The fourth amendment also amended the maturity date on the preexisting term loan to July 20, 2026. On March 29, 2024, the Company executed the fifth amendment to its term loan and fourth amendment to its equipment loan agreements. The amended agreements modify the Maximum Debt to Adjusted EBITDA ratio covenant to not greater than 4.00 to 1.00 from June 30. 2023, until December 31, 2024, and a ratio of not greater than 3.00 to 1.00 thereafter.. Term Equipment Loans During 2018, the Group entered into a revolving equipment term loan, which allows draws up to $4,600,000. Interest only payments were due until March 2020 at LIBOR plus applicable margin. During 2019, the Group entered into an additional revolving equipment term loan, which allowed draws up to $4,500,000 through December 2020. Interest only payments are due until February 2021 at LIBOR plus 1.90%, when principal repayments begin with 72 monthly installments. The maturity date of these equipment loans is in March 2027. With the third amendment agreement dated June 15, 2022, LIBOR was replaced with SOFR plus applicable margin based on the maximum debt to adjusted EBITDA. The third amendment also provided for an additional $10,000,000 of equipment loan borrowings, maturing in June 2029. The effective interest rates on the equipment loans for the period ending December 31, 2024 and 2023 was 6.73% and 7.73%, respectively. Real Estate Loan On January 6, 2023, the Group entered into a real estate loan agreement which provided for $4,087,500 bearing interest at SOFR plus 2.42%, maturing on July 20, 2026. The effective interest rate as of December 31, 2024 and 2023 was 6.73% and 7.73%, respectively. The long-term debt is collateralized by tangible assets and is subject to a fixed charge covenant and maximum long-term debt to adjusted EBITDA ratios. Future maturities of long-term debt are as follows for the years ended December 31: 2025 $5,889,407 2026 $24,345,469 2027 $3,135,023 2028 $3,816,038 2029 $13,179,383
Page 43
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 21.Loans (continued)
22. | Hire purchase and finance leases
| Minimum lease payments under hire purchase fall due as follows:
|  | Group | Group
|  | 2024 | 2023
|  | $000 | $000
| Between 1-5 years | 2,160 | 2,909
| Over 5 years | 2,916 | 5,905
|  | 5,076 | 8,814
23. | Deferred taxation
| Group
|  | 2024 | As restated 2023
|  | $000 | $000
| At beginning of year | (294) | (1,420)
| Charged to profit or loss | 1,778 | 3,803
| Arising on business combinations | - | (2,677)
| At end of year | 1,484 | (294)
|  | Group | Group As restated
|  | 2024 | 2023
|  | $000 | $000
| Accelerated capital allowances | (6,726) | 1,467
| Tax losses carried forward | 8,379 | (1,761)
| Temporary differences - trading | 2,773 | -
| Limited liability company interests | (2,942) | -
|  | 1,484 | (294)
Page 44
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
24. | Share capital
|  |  |  |  | 2024 | 2023
|  |  |  |  | $000 | $000
|  | Allotted, called up and fully paid |  |
|  | 38,322,844 (2023 - 38,322,844) Ordinary shares of $1 each | 38,323 | 38,323
25. | Reserves
Capital redemption reserve The capital redemption reserve represents cumulative non-distributable reserves as a result of buy back of the company's own shares Merger Reserve The merger reserve arises as a result of the group reconstruction which was enacted during a previous period. Profit and loss account The profit and loss account includes all current and prior period retained profits and losses.
26. | Capital commitments
| At 31 December 2024 the Group and Company had capital commitments as follows:
|  | Group | Group
|  | 2024 | 2023
|  | $000 | $000
| Contracted for but not provided in these financial statements | 2,028 | 553
27. | Pension commitments
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to $1,197,076 (2023 - $949,345). Contributions totaling $157,474 (2023 - $42,853) were payable to the fund at the reporting date and are included in creditors. Page 45
MERPAS (UK) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
28. | Commitments under operating leases
| At 31 December 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | $000 | $000 | $000 | $000
| Not later than 1 year | 938 | 1,311 | - | -
| Later than 1 year and not later than 5 years | 3,494 | 4,773 | - | -
| Later than 5 years | 2,796 | 3,936 | - | -
|  | 7,228 | 10,020 | - | -
29. | Related party transactions
| The Group enters into trade sale transactions with affiliates commonly owned by foreign affiliates of INDEVCO Group, headquartered in Lebanon. The transactions are a vendor relationship between one of the Group subsidiaries and INDEVCO affiliates. As of December 31, 2024, the Group owed $1,473,543 (2023 - $1,602,040) to INDEVCO foreign affiliates. Purchases from INDEVCO affiliates were $NIL (2023 - $NIL) for the year ended December 31, 2024. The Group had other various management-related transactions with INDEVCO Group affiliates with amounts due to the Group of $1,084,473 (2023 - $1,284,206). The Group has a $15,000,000 convertible line of credit with the ePac Holdings LLC, under which interest accrued at a rate of 7% per annum until October 18 2020 and 10% per annum from October 19 2020. The revenues of ePac Austin, LLC were produced and fulfilled by other operating plants of ePac Holdings, LLC. The associated cost of sales were charges from the other operating plants to ePac Austin, LLC for the product produced. The Group has taken advantage of the exemption in paragraph 1AC. 35 of FRS102 not to disclose transactions with wholly owned Group entities.
30. | Post balance sheet events
In April 2025, after the year end, the Company acquired 75% of the Ordinary share capital in Plume Tech.
31. | Controlling party
In the opinion of the directors, there is no ultimate controlling party.
Page 46