Par-Pak Europe Limited - Period Ending 2016-12-31

Registration number: 02919936

Par-Pak Europe Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 31 December 2016

Par-Pak Europe Limited

Contents

Company Information	1
Strategic Report	2
Directors' Report	3 to 4
Statement of Directors' Responsibilities	5
Independent Auditors' Report	6 to 7
Consolidated Profit and Loss Account	8
Consolidated Statement of Comprehensive Income	9
Consolidated Balance Sheet	10
Parent Balance Sheet	11
Consolidated Statement of Changes in Equity	12
Parent Statement of Changes in Equity	13
Consolidated Statement of Cash Flows	14
Parent Statement of Cash Flows	15
Notes to the Financial Statements	16 to 41

Par-Pak Europe Limited

Company Information

Directors

KA Ingram AJ Coverdale BR Turner RT Sansone

Registered office

37-39 Burners Lane Kiln Farm Milton Keynes Buckinghamshire MK11 3HA

Auditors

Milsted Langdon LLP Chartered Accountants and Statutory Auditors Winchester House Deane Gate Avenue Taunton Somerset TA1 2UH

Page 1

Par-Pak Europe Limited

Strategic Report for the Year Ended 31 December 2016

The directors present their strategic report for the year ended 31 December 2016.

Principal activity

The principal activity of the group is plastic thermoforming and extrusion of plastic film.

Fair review of the business

The company's key financial and other performance indicators during the year were as follows:

	Unit	2016	2015
Gross Profit	£	17,997,789	12,134,411
EBITDA	£	7,332,548	5,259,454

Principal risks and uncertainties

The group's financial performance is directly impacted by the economic environment as consumer spending is essential to achieve sales. In order to manage this risk the group strives to deliver competitively priced products and provide a quality supply chain.

Approved by the Board on 28 September 2017 and signed on its behalf by:

AJ Coverdale
Director

Page 2

Par-Pak Europe Limited

Directors' Report for the Year Ended 31 December 2016

The directors present their report and the for the year ended 31 December 2016.

Directors of the group

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

MJ Christopher (resigned 2 August 2016)

MG Evans (resigned 2 August 2016)

KA Ingram

AJ Coverdale (appointed 2 August 2016)

BR Turner (appointed 2 August 2016)

RT Sansone (appointed 2 August 2016)

Financial instruments

Objectives and policies

The directors are responsible for monitoring financial risk. Appropriate policies have been developed and implemented to identify, evaluate and manage the key risks.

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

Commodity price risk
The group is exposed to fluctuations of its raw materials since plastic is inherently a petroleum by-product. The risk is inherent to the plastic industry. The directors, in partnership with customers and the group's supplier base, mitigate these risks where possible through customers supply commitments and suppliers agreeing to fixed periodic pricing.

Currency risk
Global plastic resin prices are quoted in US Dollars and Euros. This adds to the risks of price movements in raw materials as discussed above. The directors consider that the most effective way of reducing this risk is in addition to the above, to peg the company's raw material pricing in sterling as much as possible and to hedge its foreign exchange exposure by purchasing US Dollar, Canadian dollar and Euro currencies forward when appropriate.

Liquidity risk
The group maintains stocks for supply to customers. There is a risk that these stocks may be illiquid. The directors minimise this risk through stock holding agreements and close partnership with customers to pro-actively predict the requirements of customers in order to reduce waste and lead times.

There is a risk that the trade debtors of the group may not be receivable. The directors obtain credit reports from an independent agency on all new customers and maintain close relationships with ongoing customers in order to reduce the risk of non-payment by debtors.

Interest rate risk
The directors have prepared detailed cash flow forecasts and consider this to be a minor risk to the group.

Page 3

Par-Pak Europe Limited

Directors' Report for the Year Ended 31 December 2016

Employment of disabled persons

Par-Pak Europe Limited is committed to employment policies that provide and promote equal employment and advancement opportunities and to providing an environment that ensures tolerance and respect for all employees. Par-Pak's policy is that no employee will be treated less favourably, victimised or harassed on the grounds of their disability, gender, marital or civil partnership status, race, nationality, colour, ethnicity, religion, sexual orientation, age, or any other class protected by applicable law.

Employee involvement

Par-Pak Europe Limited recognises the importance of engaging with and developing employees for both enhancing the performance of the business and in achieving and maintaining the highest standards in the workplace. The company continues to invest in people, processes and technology in order to deliver on its core people values.

Future developments

It is management's intention to continue to develop the group. The group is working to streamline costs, improve factory efficiencies and productivity levels in order to improve profitability going forward.

Research and development

The group has expended resources during the year on developing new products for both existing and potential customers. Much of this work is speculative and does not necessarily result in new products reaching the market place.

Disclosure of information to the auditor

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

Approved by the Board on 28 September 2017 and signed on its behalf by:

AJ Coverdale
Director

Page 4

Par-Pak Europe Limited

Statement of Directors' Responsibilities

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

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

•	select suitable accounting policies and apply them consistently;

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

•	state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 5

Par-Pak Europe Limited

Independent Auditor's Report to the Members of Par-Pak Europe Limited

We have audited the financial statements of Par-Pak Europe Limited for the year ended 31 December 2016, set out on pages 8 to 41. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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 auditors' 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.

Respective responsibilities of directors and auditor

As explained more fully in the Statement of Directors' Responsibilities (set out on page 5), the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors of the financial statements.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on the financial statements

In our opinion the financial statements:

•	give a true and fair view of the state of the group's and the company's affairs as at 31 December 2016 and of the group's profit for the year then ended;
•	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
•	have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

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

•	the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

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

Page 6

Par-Pak Europe Limited

Independent Auditor's Report to the Members of Par-Pak Europe Limited

Matters on which we are required to report by exception

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 company, or returns adequate for our audit have not been received, from branches not visited by us; or
•	the 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.

Nigel Fry (Senior Statutory Auditor)
For and on behalf of Milsted Langdon LLP, Statutory Auditor
Winchester House
Deane Gate Avenue
Taunton
Somerset
TA1 2UH

29 September 2017

Page 7

Par-Pak Europe Limited

Consolidated Profit and Loss Account for the Year Ended 31 December 2016

	Note	Year ended 31 December 2016  £	29 March 2015 to 31 December 2015  £
Turnover	3	72,150,572	47,521,493
Cost of sales		(54,152,783)	(35,387,082)
Gross profit		17,997,789	12,134,411
Distribution costs		(7,583,163)	(4,653,648)
Administrative expenses		(7,855,656)	(5,576,540)
Other operating income	4	5,008	3,294
Operating profit	6	2,563,978	1,907,517
Foreign exchange gain		-	1,428,862
Bonus and exercise of share options upon change of ultimate parent		-	(1,049,195)
Other interest receivable and similar income	8	828	28
Interest payable and similar charges	9	(534,149)	(727,437)
		(533,321)	(347,742)
Profit before tax		2,030,657	1,559,775
Taxation	13	(208,820)	(353,480)
Profit for the financial year		1,821,837	1,206,295
Profit/(loss) attributable to:
Owners of the company		1,821,837	1,206,295

The above results were derived from continuing operations.

The notes on pages 16 to 41 form an integral part of these financial statements.

Page 8

Par-Pak Europe Limited

Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2016

	Year ended 31 December 2016  £	29 March 2015 to 31 December 2015  £
Profit for the year	1,821,837	1,206,295
Surplus on revaluation of tangible assets	-	1,743,783
Deferred tax on revaluation of tangible assets	14,678	(349,598)
Capital contribution	-	85,692
Foreign currency translation gains/(losses)	1,010,143	(69,416)
	1,024,821	1,410,461
Total comprehensive income for the year	2,846,658	2,616,756

The notes on pages 16 to 41 form an integral part of these financial statements.

Page 9

Par-Pak Europe Limited

(Registration number: 02919936)
Consolidated Balance Sheet as at 31 December 2016

	Note	2016  £	2015  £
Fixed assets
Intangible assets	14	12,702,199	10,303,651
Tangible assets	15	15,955,404	13,114,039
		28,657,603	23,417,690
Current assets
Stocks	18	9,028,857	6,831,411
Debtors	19	17,988,761	15,439,780
Cash at bank and in hand	20	4,321,563	7,378,626
		31,339,181	29,649,817
Creditors: Amounts falling due within one year	21	(33,733,770)	(15,102,681)
Net current (liabilities)/assets		(2,394,589)	14,547,136
Total assets less current liabilities		26,263,014	37,964,826
Creditors: Amounts falling due after more than one year	21	(6,940,547)	(21,044,546)
Provisions for liabilities	22	(575,228)	(1,019,699)
Net assets		18,747,239	15,900,581
Capital and reserves
Called up share capital		100	100
Revaluation reserve		1,847,864	1,833,186
Other reserves		489,739	(520,404)
Profit and loss account		16,409,536	14,587,699
Total equity		18,747,239	15,900,581

Approved and authorised by the Board on 28 September 2017 and signed on its behalf by:

AJ Coverdale

Director

The notes on pages 16 to 41 form an integral part of these financial statements.

Page 10

Par-Pak Europe Limited

(Registration number: 02919936)
Parent Parent Balance Sheet as at 31 December 2016

	Note	2016 £	2015 £
Tangible assets	15	2,384,225	2,927,654
Investments	16	30,251,995	26,402,171
		32,636,220	29,329,825
Current assets
Stocks	18	1,605,049	1,617,068
Debtors	19	5,438,680	4,449,633
Cash at bank and in hand	20	4,134,200	4,343,548
		11,177,929	10,410,249
Creditors: Amounts falling due within one year	21	(24,404,952)	(5,774,723)
Net current (liabilities)/assets		(13,227,023)	4,635,526
Total assets less current liabilities		19,409,197	33,965,351
Creditors: Amounts falling due after more than one year	21	(5,000,000)	(20,235,625)
Provisions for liabilities	22	(11,211)	(79,722)
Net assets		14,397,986	13,650,004
Capital and reserves
Called up share capital		100	100
Revaluation reserve		439,001	439,001
Other reserves		85,692	85,692
Profit and loss account		13,873,193	13,125,211
Total equity		14,397,986	13,650,004

The company made a profit after tax for the financial year of £747,982 (2015 - profit of £57,025).

Approved and authorised by the Board on 28 September 2017 and signed on its behalf by:
 

AJ Coverdale

Director

The notes on pages 16 to 41 form an integral part of these financial statements.

Page 11

Par-Pak Europe Limited

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2016

	Share capital £	Foreign currency translation £	Revaluation reserve £	Other reserves £	Profit and loss account £	Total £	Total equity £
At 1 January 2016	100	(606,096)	1,833,186	85,692	14,587,699	15,900,581	15,900,581
Profit for the year	-	-	-	-	1,821,837	1,821,837	1,821,837
Other comprehensive income	-	1,010,143	14,678	-	-	1,024,821	1,024,821
Total comprehensive income	-	1,010,143	14,678	-	1,821,837	2,846,658	2,846,658
At 31 December 2016	100	404,047	1,847,864	85,692	16,409,536	18,747,239	18,747,239

	Share capital £	Foreign currency translation £	Revaluation reserve £	Other reserves £	Profit and loss account £	Total £	Total equity £
At 29 March 2015	100	(536,680)	439,001	-	13,381,404	13,283,825	13,283,825
Profit for the year	-	-	-	-	1,206,295	1,206,295	1,206,295
Other comprehensive income	-	(69,416)	1,394,185	85,692	-	1,410,461	1,410,461
Total comprehensive income	-	(69,416)	1,394,185	85,692	1,206,295	2,616,756	2,616,756
At 31 December 2015	100	(606,096)	1,833,186	85,692	14,587,699	15,900,581	15,900,581

The notes on pages 16 to 41 form an integral part of these financial statements.

Page 12

Par-Pak Europe Limited

Parent Statement of Changes in Equity for the Year Ended 31 December 2016

	Share capital £	Revaluation reserve £	Other reserves £	Profit and loss account £	Total £
At 1 January 2016	100	439,001	85,692	13,125,211	13,650,004
Profit for the year	-	-	-	747,982	747,982
Total comprehensive income	-	-	-	747,982	747,982
At 31 December 2016	100	439,001	85,692	13,873,193	14,397,986

	Share capital £	Revaluation reserve £	Other reserves £	Profit and loss account £	Total £
At 29 March 2015	100	439,001	-	13,068,186	13,507,287
Profit for the year	-	-	-	57,025	57,025
Other comprehensive income	-	-	85,692	-	85,692
Total comprehensive income	-	-	85,692	57,025	142,717
At 31 December 2015	100	439,001	85,692	13,125,211	13,650,004

The notes on pages 16 to 41 form an integral part of these financial statements.

Page 13

Par-Pak Europe Limited

Consolidated Statement of Cash Flows for the Year Ended 31 December 2016

	Note	Year ended 31 December 2016  £	29 March 2015 to 31 December 2015  £
Cash flows from operating activities
Profit for the year		1,821,837	1,206,295
Adjustments to cash flows from non-cash items
Depreciation and amortisation	6	4,737,588	2,972,270
(Profit)/loss on disposal of tangible assets	5	(3,074)	10,476
Finance income	8	(828)	(28)
Finance costs	9	534,149	727,437
Share based payment transactions		-	85,692
Income tax expense	13	208,820	353,480
Movement on foreign exchange reserve		1,010,143	(69,416)
		8,308,635	5,286,206
(Increase)/decrease in stocks		(1,947,283)	254,212
(Increase)/decrease in trade debtors		(1,395,838)	911,213
Increase in trade creditors		6,890,246	16,181,376
Decrease in deferred income, including government grants		(2,583)	(3,245)
Cash generated from operations		11,853,177	22,629,762
Income taxes paid		(1,103,727)	(254,000)
Net cash flow from operating activities		10,749,450	22,375,762
Cash flows from investing activities
Interest received		828	28
Acquisitions of tangible assets		(6,083,118)	(1,156,706)
Proceeds from sale of tangible assets		13,168	43,824
Acquisition of subsidiaries		(6,627,356)	(12,218,197)
Net cash flows from investing activities		(12,696,478)	(13,331,051)
Cash flows from financing activities
Interest paid		(485,245)	(680,963)
Repayment of other borrowing		-	(4,219,223)
Payments to finance lease creditors		(624,790)	(511,132)
Net cash flows from financing activities		(1,110,035)	(5,411,318)
Net (decrease)/increase in cash and cash equivalents		(3,057,063)	3,633,393
Cash and cash equivalents at 1 January		7,378,626	3,745,233
Cash and cash equivalents at 31 December		4,321,563	7,378,626

The notes on pages 16 to 41 form an integral part of these financial statements.

Page 14

Par-Pak Europe Limited

Parent Statement of Cash Flows for the Year Ended 31 December 2016

	Note	Year ended 31 December 2016  £	29 March 2015 to 31 December 2015  £
Cash flows from operating activities
Profit for the year		747,982	57,025
Adjustments to cash flows from non-cash items
Depreciation and amortisation		815,899	665,934
Loss on disposal of tangible assets		22	15,118
Finance income		(687)	(28)
Finance costs		454,750	680,963
Share based payment transactions		-	85,692
Income tax expense		236,188	118,984
		2,254,154	1,623,688
Working capital adjustments
Decrease in stocks	18	12,019	692,584
Increase in trade debtors	19	(989,047)	(744,727)
Increase in trade creditors		3,295,934	23,827,986
Cash generated from operations		4,573,060	25,399,531
Income taxes paid		(206,029)	(178,362)
Net cash flow from operating activities		4,367,031	25,221,169
Cash flows from investing activities
Interest received		687	28
Acquisition of subsidiaries	16	(3,849,824)	(17,997,840)
Acquisitions of tangible assets		(277,492)	(332,023)
Proceeds from sale of tangible assets		5,000	38,556
Net cash flows from investing activities		(4,121,629)	(18,291,279)
Cash flows from financing activities
Interest paid		(454,750)	(680,963)
Repayment of other borrowing		-	(4,219,223)
Net cash flows from financing activities		(454,750)	(4,900,186)
Net (decrease)/increase in cash and cash equivalents		(209,348)	2,029,704
Cash and cash equivalents at 1 January		4,343,548	2,313,844
Cash and cash equivalents at 31 December		4,134,200	4,343,548

The notes on pages 16 to 41 form an integral part of these financial statements.

Page 15

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

1	General information

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

The address of the company's registered office is:
37-39 Burners Lane
Kiln Farm
Milton Keynes
Buckinghamshire
MK11 3HA
United Kingdom

These financial statements were authorised for issue by the Board on 28 September 2017.

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

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

Statement of compliance

These financial statements are prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention modified to include the revaluation of certain fixed assets and as disclosed in the accounting policies, certain items are shown at fair value.

Page 16

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2016.

No Profit and Loss Account is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a profit after tax for the financial year of £747,982 (2015 - profit of £57,025).

A subsidiary is an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the period are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the Group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the Company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the Groups activities. Turnover is shown net of value added tax, returns, rebates and discounts.

The Group recognises revenue when all of the following conditions are satisfied:
- the amount of revenue can be reliably measured;
- all of the significant risks and rewards of ownership have been transferred to the customer;
- the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
- the costs incurred or to be incurred in respect of the transaction can be measured reliably;
- it is probable that future economic benefits will flow to the entity; and
- specific criteria have been met for each of the Group's activities.

Page 17

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Government grants

Government grants are recognised when the conditions for receipt are met and there is reasonable assurance that the grant will be received. Grants related to assets are initially taken to deferred income and then released to profit or loss on a systematic and rational basis over the useful lives of the related assets. The majority of grants received by the company are to assist with the purchase of plant and machinery. Grants related to income are deducted in reporting the related expense.

Government grants that are receivable as compensation for expenses or losses already incurred or of the purpose of giving immediate financial support to the company with no future related costs are recognised in profit or loss in the period in which they become receivable.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

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

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Research and development

Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off as incurred unless it meets the recognition criteria of a tangible asset, as defined by FRS 102 Section 18, in which case it is recognised as an asset of the group.

Tangible assets

Tangible assets is stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Page 18

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Depreciation

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

Asset class	Depreciation method and rate
Short leasehold property	6-100% straight line
Fixtures, fittings and equipment	20% straight line
Motor vehicles	20% straight line
Other property, plant and machinery	10-20% straight line on plant and equipment and varying rates for tools.

Business combinations

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

Goodwill

Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Intangible assets

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.

Negative goodwill arising on an acquisition is recognised on the face of the balance sheet on the acquisition date and subsequently the excess up to the fair value of non-monetary assets acquired is recognised in profit or loss in the periods in which the non-monetary assets are recovered.

Amortisation

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

Asset class	Amortisation method and rate
Goodwill	Amortised over ten years
Leasehold interest	Amortised over the lease term

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Page 19

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods comprises direct materials and where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

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

Cash and cash equivalents

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

For the purpose of the statement of cash flows only, cash and cash equivalents include bank overdrafts repayable on demand.

Since the characteristics of such banking arrangements are that the bank balance often fluctuates from being positive to overdrawn, they are considered an integral part of the company's cash management.

Trade creditors

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

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Page 20

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

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

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

3

Revenue

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

	Year ended 31 December 2016  £	29 March 2015 to 31 December 2015  £
UK	60,217,410	39,505,060
Europe	11,926,245	7,905,233
Rest of World	6,917	111,200
	72,150,572	47,521,493

4	Other operating income

The analysis of the group's other operating income for the year is as follows:

	Year ended 31 December 2016 £	29 March 2015 to 31 December 2015 £
Government grants	5,008	3,294

Page 21

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

5	Other gains and losses

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

	Year ended 31 December 2016  £	29 March 2015 to 31 December 2015  £
Profit/(loss) on disposal of other property, plant and equipment	3,074	(10,476)

6	Operating profit

Arrived at after charging/(crediting)

	Year ended 31 December 2016  £	29 March 2015 to 31 December 2015  £
Depreciation expense	3,436,802	2,133,311
Amortisation expense	1,300,786	838,959
Research and development cost	63,994	67,657
Foreign exchange (losses)/gains	(92,735)	263,110
Operating lease expense - property	1,199,203	772,554
Operating lease expense - plant and machinery	244,689	116,858
Operating lease expense - other	39,573	5,279
(Profit)/loss on disposal of other property, plant and equipment	(3,074)	10,476

7	Government grants

The majority of grants received by the group are to assist with the purchase of plant and machinery. Grants related to income are deducted in reporting the related expense.

The amount of grants recognised in the financial statements was £5,008 (2015 - £3,294).

8	Other interest receivable and similar income

	Year ended 31 December 2016 £	29 March 2015 to 31 December 2015 £
Interest income on bank deposits	817	28
Other finance income	11	-
	828	28

Page 22

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

9	Interest payable and similar expenses

	Year ended 31 December 2016  £	29 March 2015 to 31 December 2015  £
Interest on bank overdrafts and borrowings	125,881	457,181
Interest on obligations under finance leases and hire purchase contracts	48,904	46,474
Interest on group borrowings	359,364	223,782
	534,149	727,437

10	Staff costs

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

	Year ended 31 December 2016 £	29 March 2015 to 31 December 2015 £
Wages and salaries	14,616,847	7,927,590
Social security costs	928,686	577,444
Pension costs, defined contribution scheme	248,604	179,249
Other employee expense	5,000	-
	15,799,137	8,684,283

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

	Year ended 31 December 2016  No.	29 March 2015 to 31 December 2015  No.
Production	462	412
Administration and support	107	93
	569	505

Page 23

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

11	Directors' remuneration

The directors' remuneration for the year was as follows:

	Year ended 31 December 2016  £	29 March 2015 to 31 December 2015  £
Remuneration	278,408	90,667
Contributions paid to money purchase schemes	21,688	-
	300,096	90,667

During the year directors were remunerated a total of £Nil (2015: £758,500) through the exercise of share options and bonuses upon the change of parent undertaking, as a part of their employment package.

During the year the number of directors who were receiving benefits and share incentives was as follows:

	2016 No.	2015 No.
Accruing benefits under money purchase pension scheme	2	1

In respect of the highest paid director:

	2016 £	2015 £
Remuneration	224,241	90,667
Company contributions to money purchase pension schemes	21,255	-

12	Auditors' remuneration

	Year ended 31 December 2016 £	29 March 2015 to 31 December 2015 £
Audit of these financial statements	22,575	21,500
Audit of the financial statements of subsidiaries of the company pursuant to legislation	34,020	32,400
	56,595	53,900
Other fees to auditors
Taxation compliance services	-	828
All other assurance services	9,960	12,220
	9,960	13,048

 

Page 24

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

13

Taxation

Tax charged/(credited) in the income statement

	Year ended 31 December 2016 £	29 March 2015 to 31 December 2015 £
Current taxation
UK corporation tax	386,302	352,767
UK corporation tax adjustment to prior periods	(16,424)	(98,083)
	369,878	254,684
Foreign tax	280,960	263,649
Total current income tax	650,838	518,333
Deferred taxation
Arising from origination and reversal of timing differences	(442,018)	(164,853)
Tax expense in the income statement	208,820	353,480

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2015 - the same as the standard rate of corporation tax in the UK) of 20% (2015 - 20%).

The differences are reconciled below:

	Year ended 31 December 2016  £	29 March 2015 to 31 December 2015  £
Profit before tax	2,030,657	1,559,775
Corporation tax at standard rate	394,284	311,955
Effect of expense not deductible in determining taxable profit/(tax loss)	150,807	258,230
Effect of foreign tax rates	(140,518)	(112,986)
Increase/(decrease) in UK and foreign current tax from adjustment for prior periods	27,513	(31,580)
Tax increase (decrease) from effect of capital allowances and depreciation	(220,874)	32,322
Tax charge not recognised	(13,915)	-
Tax increase (decrease) from effect of unrelieved tax losses carried forward	4,425	-
Tax increase (decrease) arising from group relief	471	-
Tax increase (decrease) from effect of adjustment in research and development tax credit	(32,754)	(112,882)
Other tax effects for reconciliation between accounting profit and tax expense/(income)	39,381	8,421
Total tax charge	208,820	353,480

Page 25

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Deferred tax

Group

Deferred tax assets and liabilities

2016	Asset £	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	70,281	444,332
Other timing differences	11,630	-
Revaluation of other property, plant and machinery	-	212,807
Leases	-	-
	81,911	657,139

2015	Asset £	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	-	546,499
Other timing differences	153,430	-
Revaluation of other property, plant and machinery	-	349,598
Leases	-	277,032
	153,430	1,173,129

Company

Deferred tax assets and liabilities

2016	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	11,211
Other timing differences	-
	11,211

2015	Liability £
Difference between accumulated depreciation and amortisation and capital allowances	79,722
Other timing differences	-
	79,722

Page 26

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

14	Intangible assets

Group

	Goodwill  £	Other intangible assets  £	Total £
Cost or valuation
At 1 January 2016	8,833,783	2,406,306	11,240,089
Additions	3,699,334	-	3,699,334
At 31 December 2016	12,533,117	2,406,306	14,939,423
Amortisation
At 1 January 2016	743,195	193,243	936,438
Amortisation charge	947,832	352,954	1,300,786
At 31 December 2016	1,691,027	546,197	2,237,224
Carrying amount
At 31 December 2016	10,842,090	1,860,109	12,702,199
At 31 December 2015	8,090,588	2,213,063	10,303,651

The aggregate amount of research and development expenditure recognised as an expense during the period is £63,994 (2015 - £67,657).
 

Page 27

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

15	Tangible assets

Group

	Land and buildings £	Furniture, fittings and equipment  £	Motor vehicles  £	Other property, plant and equipment  £	Total £
Cost or valuation
At 1 January 2016	642,956	414,316	21,550	15,994,974	17,073,796
Additions	148,591	132,176	-	5,940,738	6,221,505
Acquired through business combinations	-	29,257	-	138,387	167,644
Disposals	(3,446)	-	-	(8,234)	(11,680)
At 31 December 2016	788,101	575,749	21,550	22,065,865	23,451,265
Depreciation
At 1 January 2016	37,280	97,990	2,718	3,821,769	3,959,757
Charge for the period	93,873	91,697	6,527	3,244,705	3,436,802
Acquired through business combinations	-	17,573	-	83,315	100,888
Eliminated on disposal	(115)	-	-	(1,471)	(1,586)
At 31 December 2016	131,038	207,260	9,245	7,148,318	7,495,861
Carrying amount
At 31 December 2016	657,063	368,489	12,305	14,917,547	15,955,404
At 31 December 2015	605,676	316,326	18,832	12,173,205	13,114,039

Included within the net book value of land and buildings above is £Nil (2015 - £Nil) and £657,064 (2015 - £605,676) in respect of short leasehold land and buildings.
 

Revaluation

The fair value of the company's land and buildings was revalued on 31 July 2015 by an independent valuer.
This was carried out Stout Risius Ross, Inc.
Had this class of asset been measured on a historical cost basis, their carrying amount would have been £407,074 (2015 - £468,777).
 

The fair value of the company's furniture, fittings and equipment was revalued on 31 July 2015 by an independent valuer.
This was carried out Stout Risius Ross, Inc.
Had this class of asset been measured on a historical cost basis, their carrying amount would have been £155,879 (2015 - £141,108).
 

The fair value of the company's motor vehicles was revalued on 31 July 2015 by an independent valuer.
This was carried out Stout Risius Ross, Inc.
Had this class of asset been measured on a historical cost basis, their carrying amount would have been £2,301 (2015 - £4,602).
 

Page 28

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

The fair value of the company's other property, plant and equipment was revalued on 31 July 2015 by an independent valuer.
This was carried out Stout Risius Ross, Inc.
Had this class of asset been measured on a historical cost basis, their carrying amount would have been £7,065,977 (2015 - £6,763,045).
 

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

	31 December 2016 £	31 December 2015 £
Other property, plant and equipment	1,646,390	2,261,949
Land and buildings	-	64,668
Motor vehicles	-	12,015
	1,646,390	2,338,632

Restriction on title and pledged as security

Other property, plant and equipment with a carrying amount of £1,646,390 (2015 - £2,261,949) has been pledged as security for finance lease and hire purchase liabilities.

Land and buildings with a carrying amount of £Nil (2015 - £64,668) has been pledged as security for finance lease and hire purchase liabilities.

Motor vehicles with a carrying amount of £Nil (2015 - £12,015) has been pledged as security for finance lease and hire purchase liabilities.

Company

	Land and buildings £	Furniture, fittings and equipment  £	Other property, plant and equipment  £	Total £
Cost
At 1 January 2016	-	108,926	5,349,162	5,458,088
Additions	37,187	11,064	229,241	277,492
Disposals	-	-	(6,234)	(6,234)
At 31 December 2016	37,187	119,990	5,572,169	5,729,346
Depreciation
At 1 January 2016	-	72,573	2,457,861	2,530,434
Charge for the period	2,450	16,139	797,310	815,899
Eliminated on disposal	-	-	(1,212)	(1,212)
At 31 December 2016	2,450	88,712	3,253,959	3,345,121
Carrying amount
At 31 December 2016	34,737	31,278	2,318,210	2,384,225
At 31 December 2015	-	36,353	2,891,301	2,927,654

Included within the net book value of land and buildings above is £34,737 (2015 - £Nil) in respect of short leasehold land and buildings.
 

Page 29

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

16	Investments in subsidiaries, joint ventures and associates

Company

	2016 £	2015 £
Investments in subsidiaries	30,251,995	26,402,171

Subsidiaries	£
Cost
At 1 January 2016	26,402,171
Additions	3,849,824
At 31 December 2016	30,251,995
Carrying amount
At 31 December 2016	30,251,995
At 31 December 2015	26,402,171

Details of undertakings

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

Undertaking	Country of incorporation	Holding	Proportion of voting rights and shares held
			2016	2015

Subsidiary undertakings
A & J Plastics Limited Winchester House Dane Gate Avenue Taunton Someset TA1 2UH	United Kingdom	Ordinary	100%	100%
Chiltern Thermoforming Limited Winchester House Dane Gate Avenue Taunton Someset TA1 2UH	United Kingdom	Ordinary	100%	100%

Page 30

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Deltaform Limited Winchester House Dane Gate Avenue Taunton Someset TA1 2UH	United Kingdom	Ordinary	100%	100%
Eureka Caterware B.V. 1e Barendrechtseweg 58 2992 XC Barendrecht Netherlands	Holland	Ordinary	100%	0%
Holfeld Plastics Limited Avoca River Park Arklow Co Wicklow	Republic of Ireland	Ordinary	100%	100%
Waddington Europe Limited 37 - 39 Burners Lane Kiln Farm Milton Keynes MK11 3HA	United Kingdom	Ordinary	100%	100%

The principal activity of A & J Plastics Limited is the extrusion of plastic film.

The principal activity of Chiltern Thermoforming Limited is plastic thermoforming.

The principal activity of Deltaform Limited is plastic thermoforming.

The principal activity of Eureka Caterware B.V. is plastic thermoforming.

The principal activity of Holfeld Plastics Limited is plastic thermoforming.

The principal activity of Waddington Europe Limited is Dormant.

The profit for the financial period of A & J Plastics Limited was £- and the aggregate amount of capital and reserves at the end of the period was £1,767,447.

The loss for the financial period of Chiltern Thermoforming Limited was £257,743 and the aggregate amount of capital and reserves at the end of the period was £1,534,844.

The profit for the financial period of Deltaform Limited was £166,303 and the aggregate amount of capital and reserves at the end of the period was £9,450,425.

The loss for the financial period of Eureka Caterware B.V. was £17,565 and the aggregate amount of capital and reserves at the end of the period was £190,410.

The profit for the financial period of Holfeld Plastics Limited was £2,093,356 and the aggregate amount of capital and reserves at the end of the period was £12,721,378.

The profit for the financial period of Waddington Europe Limited was £- and the aggregate amount of capital and reserves at the end of the period was £100.

For the year ending 31 December 2016 the subsidiary A & J Plastics Limited (Company No: 02524862) was entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies.

Page 31

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

17	Business combinations

On 12 January 2016, Par-Pak Europe Limited acquired 100% of the issued share capital of Eureka Caterware B.V., obtaining control.

Eureka Caterware B.V. contributed £2,197,968 revenue and £(17,565) to the group's profit for the period between the date of acquisition and the balance sheet date.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:
 

	31 December 2016  £
Assets and liabilities acquired
Financial assets	1,153,142
Stocks	250,163
Tangible assets	66,757
Financial liabilities	(1,319,573)
Total identifiable assets	150,489
Goodwill	3,699,334
Total consideration	3,849,823
Cash flow analysis:
Cash consideration	3,849,823

The useful life of goodwill is 10 years.

Page 32

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

18

Stocks

	Group		Company
	2016 £	2015 £	2016 £	2015 £
Raw materials and consumables	4,761,418	3,842,775	894,510	952,781
Work in progress	53,446	-	-	-
Finished goods and goods for resale	4,213,993	2,988,636	710,539	664,287
	9,028,857	6,831,411	1,605,049	1,617,068

Group

The cost of stocks recognised as an expense in the year amounted to £34,962,686 (2015 - £25,088,180).

Impairment of stocks

The amount of impairment loss included in profit or loss is £218,288 (2015 - £396,043).

Company

The cost of stocks recognised as an expense in the year amounted to £10,040,865 (2015 - £7,271,021).

19

Debtors

		Group		Company
	Note	2016 £	2015 £	2016 £	2015 £
Trade debtors		16,635,509	14,873,920	4,905,215	4,204,493
Amounts owed by related parties	29	29,962	-	217,034	518
Other debtors		526,583	99,501	169,357	99,501
Prepayments		796,707	466,359	147,074	145,121
		17,988,761	15,439,780	5,438,680	4,449,633

20	Cash and cash equivalents

	Group		Company
	2016 £	2015 £	2016 £	2015 £
Cash on hand	2,227	3,916	400	-
Cash at bank	4,319,336	7,374,710	4,133,800	4,343,548
	4,321,563	7,378,626	4,134,200	4,343,548

Page 33

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

21

Creditors

		Group		Company
	Note	2016  £	2015  £	2016  £	2015  £
Due within one year
Loans and borrowings	26	416,115	575,868	-	-
Trade creditors		6,750,510	6,455,500	881,366	611,815
Amounts due to related parties	29	22,180,455	4,863,601	22,164,145	3,960,038
Social security and other taxes		1,069,300	704,042	441,145	372,908
Outstanding defined contribution pension costs		14,486	16,183	38	-
Other payables		609,284	594,505	426,106	392,191
Accrued expenses		2,536,564	1,270,812	264,286	308,575
Income tax liability		157,056	622,170	227,866	129,196
		33,733,770	15,102,681	24,404,952	5,774,723
Due after one year
Loans and borrowings	26	376,503	792,636	-	-
Government grants		13,702	16,285	-	-
Amounts due to related parties	29	6,550,342	20,235,625	5,000,000	20,235,625
		6,940,547	21,044,546	5,000,000	20,235,625

22	Deferred tax and other provisions

Group

	Deferred tax £
At 1 January 2016	1,019,699
Increase/(decrease) in existing provisions	(444,471)
At 31 December 2016	575,228

Company

	Deferred tax £
At 1 January 2016	79,722
Increase/(decrease) in existing provisions	(68,511)
At 31 December 2016	11,211

Page 34

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

23	Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £248,604 (2015 - £179,249).

Contributions totalling £14,486 (2015 - £16,183) were payable to the scheme at the end of the year and are included in creditors.

24	Share capital

Allotted, called up and fully paid shares

	2016		2015
	No.	£	No.	£
Ordinary shares of £1 each	100	100	100	100

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions: These shares carry voting rights and are entitled to dividends. There are no restrictions in place.

25

Reserves

Group

Revaluation reserve

Following the change in ultimate parent company in the period ended 31 December 2015, the other property, plant and machinery of the acquired subsidiaries were revalued and consequently a revaluation reserve has arisen due to the uplift in the value of the other property, plant and machinery.

Other reserves

The group company of Holfeld Plastics Limited report in Euros and accordingly a foreign exchange variance has arisen upon the brought forward balances.

Other reserves

Upon the exercise of shares options in the period ended 31 December 2015, the company was transferred £85,692 on a permanent transfer and this has been treated as a contribution to capital in accordance with FRS 102.

The changes to each component of equity resulting from items of other comprehensive income for the current year were as follows:

Page 35

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

	Foreign currency translation £	Revaluation reserve £	Total £
Surplus on revaluation of tangible assets	-	14,678	14,678
Foreign currency translation gains/(losses)	1,010,143	-	1,010,143
	1,010,143	14,678	1,024,821

The changes to each component of equity resulting from items of other comprehensive income for the prior period were as follows:

	Foreign currency translation £	Revaluation reserve £	Other reserves £	Total £
Surplus on revaluation of tangible assets	-	1,394,185	-	1,394,185
Contribution to capital	-	-	85,692	85,692
Foreign currency translation gains/(losses)	(69,416)	-	-	(69,416)
	(69,416)	1,394,185	85,692	1,410,461

Company

Revaluation reserve

The revaluation reserve arose upon the company uplifting the value of the land and buildings to deemed cost under the transitional rules of FRS 102 section 35.

Other reserves

Upon the exercise of shares options in the period ended 31 December 2015, the company was transferred £85,692 on a permanent transfer and this has been treated as a contribution to capital in accordance with FRS 102.

The changes to each component of equity resulting from items of other comprehensive income for the prior period were as follows:

	Other reserves £	Total £
Contribution to capital	85,692	85,692

Page 36

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

26	Loans and borrowings

	Group		Company
	2016  £	2015  £	2016  £	2015  £
Non-current loans and borrowings
Finance and hire purchase lease liabilities	376,503	792,636	-	-

	Group		Company
	2016  £	2015  £	2016  £	2015  £
Current loans and borrowings
Finance and hire purchase lease liabilities	416,115	575,868	-	-

Group

Other borrowings

Finance lease and hire purchase liabilities with a carrying amount of £792,618 (2015 - £1,368,504) is denominated in GBP with a nominal interest rate of 7.8% to 16%. The final instalment is due on 4 April 2020.

The finance lease and hire purchase liability is secured over the assets under the finance lease and hire purchase agreement.

Page 37

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

27	Obligations under leases and hire purchase contracts

Group

Finance leases

The total of future minimum lease payments is as follows:

	2016  £	2015  £
Not later than one year	438,899	624,791
Later than one year and not later than five years	387,918	828,883
	826,817	1,453,674

Operating leases

The total of future minimum lease payments is as follows:

	2016  £	2015  £
Not later than one year	1,114,986	1,116,675
Later than one year and not later than five years	3,717,602	4,160,451
Later than five years	2,681,943	4,157,337
	7,514,531	9,434,463

The amount of non-cancellable operating lease payments recognised as an expense during the year was £1,483,465 (2015 - £894,691).

Company

Operating leases

The total of future minimum lease payments is as follows:

	2016  £	2015  £
Not later than one year	162,839	159,856
Later than one year and not later than five years	625,758	627,757
Later than five years	1,013,610	1,949,250
	1,802,207	2,736,863

The amount of non-cancellable operating lease payments recognised as an expense during the year was £243,623 (2015 - £213,101).

28

Dividends

The directors are proposing a final dividend of £Nil (2015 - £Nil) per share.

Page 38

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

29	Related party transactions

Group

Summary of transactions with parent

Parent and ultimate parent company
 During the year the group were provided services by the parent and ultimate parent company. The group also provided to and received loans from the parent and ultimate parent company upon which interest between 0% to 0.2% above the market rate is charged per annum.
 

Summary of transactions with associates

A company under the control of the ultimate parent company
 During the year Par-Pak Europe Limited received a loan upon which interest at 2% to 2.25% per annum is charged from another subsidiary of the ultimate parent company.
 

Expenditure with and payables to related parties

2016	Parent £
Rendering of services	608,366

2015	Parent £	Associates £
Purchase of goods	-	8,642
Rendering of services	177,409	-
	177,409	8,642

Loans to related parties

2016	Parent £
Advanced	29,962

Loans from related parties

2016	Parent £	Associates £
At start of period	19,199,225	5,900,000
Advanced	3,409,062	200,000
Interest charged	-	22,510
At end of period	22,608,287	6,122,510

2015	Parent £	Associates £
Advanced	19,199,225	5,900,000
Interest charged	223,782	-
Impairment	(223,782)	-
At end of period	19,199,225	5,900,000

Page 39

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Company

Summary of transactions with parent

Parent and the ultimate parent company
 During the year Par-Pak Europe Limited were provided services by the parent and ultimate parent company. Par-Pak Europe Limited also recevied loans from the parent and ultimate parent company upon which interest at 0.2% above the market rate is charged per annum.
 

Summary of transactions with subsidiaries

Subsidiary companies
 During the year Par-Pak Europe Limited bought goods from and sold goods to subsidiary compnies. Par-Pak Europe Limited also provided subsidiary companies with interest free loans which are repayable on demand.
 

Summary of transactions with associates

A company under the control of the ultimate parent company
 During the year Par-Pak Europe Limited received a loan upon which interest at 2.25% per annum is charged from another subsidiary of the ultimate parent company.
 

Income and receivables from related parties

2016	Subsidiary £
Sale of goods	1,282,150

2015	Subsidiary £
Sale of goods	546,293
Sale of property or other assets	38,555
	584,848

Expenditure with and payables to related parties

2016	Parent £	Subsidiary £
Purchase of goods	-	879,590
Rendering of services	139,043	-
	139,043	879,590

2015	Parent £	Subsidiary £	Associates £
Purchase of goods	-	833,880	8,642
Rendering of services	101,643	-	-
	101,643	833,880	8,642

Page 40

Par-Pak Europe Limited

Notes to the Financial Statements for the Year Ended 31 December 2016

Loans to related parties

2016	Parent £	Subsidiary £
At start of period	-	518
Advanced	8,068	208,966
Repaid	-	(518)
At end of period	8,068	208,966

Loans from related parties

2016	Parent £	Subsidiary £	Associates £
At start of period	19,195,563	100	5,000,000
Advanced	2,738,756	5,944	-
At end of period	21,934,319	6,044	5,000,000

2015	Parent £	Subsidiary £	Associates £
At start of period	4,219,223	-	-
Advanced	14,976,340	100	5,000,000
Interest charged	223,782	-	-
Interest paid	(223,782)	-	-
At end of period	19,195,563	100	5,000,000

30	Parent and ultimate parent undertaking

The company's immediate parent is Polarpak Inc, incorporated in the United States of America.

 The ultimate parent is Newell Brands Inc, incorporated in the United States of America.
 

Page 41