annual report & accounts 2016 - ipl plastics · presented as discontinued in this annual report...

Annual Report& Accounts 2016

One51 at a Glance

Key Financial Performance

Directors and Other information

Chairman’s Statement

Chief Executive’s Review

Financial Review

Directors’ Biographies

Directors’ Report

Directors’ Statement on Corporate Governance

Report of the Nomination Committee

Report of the Audit Committee

Report of the Remuneration Committee on Directors’ Remuneration

Statement of Directors’ Responsibilities in respect of the Directors’ Report and the Financial Statements

Independent Auditor’s Report

Group Income Statement

Group Statement of Other Comprehensive Income

Consolidated Statement of Financial Position

Group Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

Company Statement of Financial Position

Company Statement of Changes in Equity

Company Statement of Cash Flows

Notes to the Company Financial Statements

Information for Shareholders

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Contents

Strategic Report

Directors’ Report

Financial Statements

Information

One51 Annual Report & Accounts 2016 1

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One51 Headquarters

Plastics Division

Specialist Environmental Services

Metals UK South

One51 employs c. 1,900 people in Ireland, the UK, Canada, the United States and China. The Group is headquartered in Dublin, Ireland.

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One51 Headquarters

Plastics Division

Specialist Environmental Services

Metals UK South

One Fifty One plc (“the Company”) and its subsidiaries (together, “One51” or “the Group”) comprised of two operating divisions during the year under review. These are our Plastics Division (“Plastics”) and our Environmental Services Division (“ClearCircle”).

One51 at a glance – Who we are

Plastics

Plastics consists of two sub-divisions, one being OnePlastics Group (“OPG”) and the other being IPL Inc. (“IPL”), the North American based business acquired in July 2015. IPL has expanded its North American footprint with the acquisition of Encore Industries Inc. (“Encore”) in the United States in November 2016.

Plastics supplies products to a broad range of customers across end markets in Ireland, the United Kingdom, North America and China from eleven production facilities (three in the UK; one in Ireland; one in China; and six in North America). Plastics is engaged in the supply and distribution of manufactured products across three primary business categories, as follows:

• Packaging – rigid plastic packaging for the food service, pharmaceutical, material handling, agricultural and adhesive coating industries;

• Environmental Containers – wheeled bins and caddies for the waste management and recycling industries; and

• Industrial Products – manufacturing partner to blue chip customers in the construction, furniture and material handling sectors.

ClearCircle

ClearCircle is the umbrella brand for Specialist Environmental Services (“SES”) which includes hazardous waste management, industrial services and materials recycling businesses in Ireland and the UK. It also includes the Group’s Metals Recycling businesses. During the year, the Group disposed of its Irish Metals Recycling businesses and is in the process of disposing of its Irish and UK SES businesses. The only remaining ClearCircle business will be our Metals South recycling businesses in the UK. The results of ClearCircle are presented as discontinued in this Annual Report with the exception of Metals UK South recycling which are presented within results from continuing operations.

more on page 15 more on page 19


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Key Financial Performance

2016 2015 2014

€’m €’m €’m

Group revenue 433.9 366.0 276.5

EBITDA(2) 55.2 36.1 21.6

EBIT(3) 30.9 20.2 12.5

Profit for the year before exceptional and non-recurring items and share of equity-accounted investee profits 17.9 11.4 7.3

Profit for the year 16.1 18.4 20.6

Adjusted diluted Earnings per Share (cent)(4) 11.04 6.98 5.35

Shareholders’ equity (excluding IPL Put Liability)(5) 190.9 184.9 134.2

Shareholders’ equity 118.6 152.6 134.2

(1) The numbers above represent the consolidated continuing and discontinued operations. The Income Statement on page 59 presents the results of continuing operations with discontinued operations results presented as a single line item. A full reconciliation of continuing operations is presented in note 3 while discontinued operations results are reconciled in notes 3 and 11. Assets and liabilities held-for-sale (including those relating to the SES businesses) are set out in note 21.

(2) Adjusted EBITDA represents earnings before interest, taxation, depreciation, amortisation, exceptional items, non-recurring items and the Group’s share of profits from its equity-accounted investees.

(3) Adjusted EBIT is Adjusted EBITDA less depreciation and amortisation.

(4) Adjusted diluted Earnings per Share is calculated by dividing the adjusted profit attributable to ordinary shareholders (which excludes exceptional and non-recurring items and the Group’s share of after tax profits of its equity-accounted investees) by the weighted average number of Ordinary Shares and options with a dilutive effect.

(5) Shareholders’ equity is stated prior to deduction being made for the IPL Put Liability. The Put Liability amounted to €72.2 million at year end (2015: €32.4 million; 2014: €Nil), is measured at fair value and represents the anticipated consideration required to acquire the IPL minority interests’ 33.33% shareholding in July 2021 (date from when the Put becomes exercisable), discounted to present value.

EBITDA and EBIT are reconciled to the Income Statement in note 3 to the financial statements and the Adjusted diluted Earnings per Share reconciliation is included in note 12.

Three Year Summary – Financial Information(1)

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2016 Revenue by Division

Revenue €’m

18.6% from 2015

2016 433.9

2015 366.0

2014 276.5

Adjusted diluted Earnings per Share** € cents

58.2% from 2015

2016 11.04

2015 6.98

2014 5.35

EBITDA* €’m

53.1% from 2015

2016 55.2

2015 36.1

2014 21.6

Total Equity*** €’m

3.2% from 2015

2016 190.9

2015 184.9

2014 134.2

2016 Revenue by Geography 2016 EBITDA* by Division

€433.9m

North America 47%

UK 31%

Ireland 21%

Rest of World 1%

€433.9m

Plastics 76%

ClearCircle 24%

€55.2m

Plastics 83%

ClearCircle 17%

* EBITDA excludes exceptional and non-recurring items and the Group’s share of after tax profits of its equity-accounted investees. In calculating EBITDA by division, central Group overheads have been attributed to the divisions on a pro-rata basis.** Adjusted diluted Earnings per Share is calculated by dividing the adjusted profit attributable to ordinary shareholders (which excludes exceptional and non-recurring items and the Group’s share of after tax profits of its equity-accounted investees) by the weighted average number of Ordinary Shares outstanding, as adjusted for the effects of all Ordinary Shares and options with a dilutive effect.*** Total equity excludes the Put Liability relating to the 33.33% of IPL not owned by the Group, which amounted to €72.2 million at year end (2015: €32.4 million; 2014: €Nil).

All amounts are accounted for under IFRSs.


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Non-Executive Chairman Denis Cregan

Executive Directors Alan Walsh (Chief Executive)Pat Dalton (Chief Financial Officer)

Non-Executive Directors Pat GilroyRose HynesHugh McCutcheonGeoff MeagherDalton Philips Company Secretary Susan Holburn

Board Committees as at 31 December 2016Audit CommitteeGeoff Meagher (Chair)Rose HynesHugh McCutcheon

Nomination CommitteeDenis CreganAlan Walsh (Executive)

Remuneration CommitteeHugh McCutcheon (Chair)Geoff Meagher

Principal Bankers Allied Irish Banks plcBank of Ireland Group HSBC Bank plcUlster Bank Ireland LimitedNational Bank of CanadaBank of MontrealCaisse Centrale DesjardinsRoyal Bank of CanadaLaurentian Bank of Canada

Solicitors A & L GoodbodyIFSCNorth Wall QuayDublin 1

LK Shields40 Upper Mount StreetDublin 2

McCann FitzGerald Riverside OneSir John Rogerson’s QuayDublin 2

Stikeman Elliott LLP1155 Boulevard René-Lévesque Ouest Montreal, QC H3B 3V2 Canada

Auditor KPMGChartered Accountants1 Stokes PlaceSt. Stephen’s GreenDublin 2

Registered Office Huguenot House35-38 St. Stephen’s GreenDublin 2

Directors and Other Information

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Chariman’s Statement


Financial Review

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Strategic Report


Financial performanceThe financial performance of the Group was ahead of expectations during 2016.

Group Revenue for the year was €433.9 million (2015: €366.0 million), with our core Plastics Division accounting for €331.1 million (2015: €231.8 million), 76.3% (2015: 63.3%) of the Group’s total, positively impacted by a full year’s contribution from IPL, acquired in July 2015.

EBITDA for the year was €55.2 million (2015: €36.1 million), representing a 53.1% increase year on year. Adjusted diluted Earnings per Share of 11.04 cents (2015: 6.98 cents) represents a 58.2% increase year on year.

Net debt1 (excluding Convertible Loan Notes) was €152.5 million at 31 December 2016 (2015: €120.3 million), the increase driven primarily by the drawdown of borrowings to fund the acquisition of Encore and significant development capital expenditure programmes in IPL and OPG.

A detailed review of the Group’s performance in the year is provided in the Chief Executive’s and Financial Review Reports.

Chairman’s Statement

I am pleased to report that One51 performed strongly in 2016. The Group experienced significant organic growth in its Plastics operations, particularly in North America (both Canada and the United States). In November 2016, the Group announced the acquisition of Encore, which will facilitate further expansion of the Group’s activities by increasing our manufacturing and sales footprint in the US marketplace. During the year, the Group disposed of its Irish Metals Recycling businesses and is in the process of disposing of its Irish and UK Specialist Environmental Services operations. These disposals will enable the Group to focus all its resources on the growth and development of its Plastics operations across its key markets.

1Net debt is a non GAAP measure as defined on page 28.

StrategyThe Group’s strategic vision is to become a leading global player in the rigid plastics market.

The Group has successfully integrated its transformative acquisition, IPL, acquired in July 2015. The results of this business have been strong and ahead of expectations in the year and this has enabled the Group to further expand its North American operational footprint through the November 2016 acquisition of Encore, an Ohio headquartered plastics manufacturer, with manufacturing operations in Ohio, Georgia and Minnesota. Furthermore, the Group announced in November 2016, a significant development capital expenditure plan for its North American (both Canada and the US) business to provide it with an enhanced platform so as to enable continued expansion of that business.

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We continued to develop OPG through further growth capital expenditure in its Irish and UK operations, including the development of a new food grade plastics packaging manufacturing facility at the OPG site in Cork, the official opening of which took place in September 2016. In addition, we reconfigured one of our UK manufacturing facilities to provide a broader product offering to a wider range of customers in the UK rigid plastic packaging market.

OPG has developed a dedicated product focused Innovation Centre of Excellence to foster innovation and new product development. The acquisition of IPL brought with it advanced product research and development capabilities. The Group operates in a growing and consolidating rigid plastic packaging marketplace and is continually working closely with a significant number of customers in designing, prototyping and testing a number of exciting new products. During the year, the Group launched a range of new products and these, together with ongoing research and development activities and close interaction with customers, provide the Group with considerable competitive advantage in its key markets.

During the year, the Group made the decision to dispose of its Irish Metals Recycling businesses and its Irish and UK SES businesses. The disposal process in respect of the Irish Metals Recycling businesses concluded in October 2016 and a disposal process has commenced with regard to the Group’s Irish and UK SES businesses.

The Group has now reached considerable scale on an international level with growth platforms in place across Plastics providing income streams in multiple geographies and end markets. As a result of the progress made during the year, the Group is now in a stronger position to capture further opportunities to drive future value growth.

DividendsThe Board is not currently contemplating the payment of a dividend to shareholders in respect of the 2016 financial year but will continue to keep this matter under review in line with our strategy of ensuring our capital allocation is appropriate for the needs of the Group over the medium term.

Board and GovernanceOne51 remains committed to high standards in corporate governance. The Board has undertaken to continue to comply with appropriate corporate governance arrangements having regard to best practice and taking into account the size of the Group and the nature of its activities. The Directors’ Statement on Corporate Governance describes the corporate governance arrangements in place.

On 1 September 2016, Mr. Dalton Philips and Mr. Pat Gilroy were co-opted to the Board. Dalton joins as an Independent Non-Executive Director, while Pat joins as a Non-Independent Non-Executive Director representing IIU Nominees Limited, the Group’s largest shareholder.

Management and EmployeesOne51 now has c. 1,900 employees in its global operations and I want to thank them for their continued support, loyalty, hard work and commitment to the development of the Group. On behalf of the Board and all shareholders, I would like to take this opportunity to note their significant contribution to One51’s performance.

The Group has now reached considerable scale on an international level with growth platforms in place across Plastics providing income streams in multiple geographies and end markets.


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OutlookRigid plastic packaging is the largest component of the global plastic packaging market. The rigid plastic packaging market is driven by innovation, the substitution effect versus traditional forms of packaging (e.g. glass, paper, metals), population growth and urbanisation. Growth in these factors lead to growth opportunities for rigid plastic packaging manufacturers, including One51. It is also a consolidating marketplace as evidenced by a number of significant recent merger and acquisition transactions.

The Group continues to experience strong demand for its products and its operations which is underpinned by favourable market dynamics, particularly in North America. The US now accounts for more than 50% of the Group’s end market Plastics sales. Further development of the Group’s strategy will be achieved through maximising efficiencies from the current asset base and product lines, geographic expansion (including through acquisition), further organic growth through developing new solutions for niche markets, penetrating new markets with new solutions and utilising our research and development capabilities to support sales and marketing initiatives.

The Group is cognisant of elevated levels of global risk factors, including currency and interest rate volatility, an uncertain geopolitical environment and other global economic uncertainties such as the impact of the UK’s decision to exit the European Union. Notwithstanding the impact of these uncertainties, trading in 2017 to date has been solid and in line with expectations.

Chairman’s Statement(continued)

One51 now has a global platform comprising of rigid plastic packaging products, a segment of the overall plastics marketplace generally characterised by attractive margins and significant barriers to entry. The business is subject to low demand volatility due to the globalised defensive end-markets served, providing stability to the business and greater visibility on future revenue flows as well as potential for continued market expansion.

The Board and management are pursuing a strategy focused on increasing shareholder value. Financing the organic growth and acquisition opportunities in order to drive that value, is an ongoing challenge. Maintaining the appropriate capital structure, having access to alternative forms of capital and enhancing liquidity in the Company’s shares, continue to remain key components of that strategy.

Denis CreganChairman16 March 2017

The Group continues to experience strong demand for its products and its operations which is underpinned by favourable market dynamics, particularly in North America.

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IPL – Lee’s Summit, Missouri, USA

Protech Performance Plastics – Cork, Ireland

Encore Industries – Sandusky, Ohio, USA


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The key operational highlights were as follows:

• The successful integration of IPL in North America following its July 2015 acquisition; providing the Group with a strong presence and a platform for future growth in the North American market.

• The acquisition in November 2016 of Encore in North America for a consideration of USD$35.0 million.

• Further significant development capital expenditure in our North American operations providing the Group with enhanced ability and capacity to service an expanding business.

• The commissioning of a state of the art food grade packaging manufacturing facility at our OPG Cork facility. This has enabled the design and manufacture of innovative plastic packaging products to support the Irish food industry and provides a platform for the cross sharing of both research and development and product offerings between IPL and OPG.

• The reconfiguration of one of our OPG UK manufacturing operations to provide a broader product offering to a wider range of customers in the UK rigid plastic packaging market from commencement of production in early 2017.

• The acquisitions of H&T Labour and Vacuumation Services Limited (“H&T”) on 31 January 2016 and the business and assets of Bale Group Limited (“Bale”) on 20 May 2016. Both acquisitions were in the UK SES business and expanded our geographic and operational footprint in that marketplace.

• Disposal of the Irish metals recycling businesses during September and October 2016.

• The decision to dispose of the Group’s SES businesses in Ireland and the UK which will enable the Group to focus its resources on its core Plastics operations.

• Renegotiated and extended the maturity date of the €92.0 million committed syndicated loan facility from the Irish Bank group with a new expiry date of December 2020 (previously January 2019).

• Renegotiated and extended the IPL Canadian syndicated loan facility to finance the acquisition of Encore and to provide further bank facilities to the IPL group with a revised expiry date of July 2020 (previously July 2019).

• Continuing to position One51 for future growth by identifying appropriate organic and acquisition opportunities which can drive shareholder value growth.


The year to 31 December 2016 was another year of significant progress, continued growth and refined strategic focus for One51. This was evidenced in particular by strong organic growth, primarily in our Plastics business in North America (Canada and the United States), the acquisition of Encore, the disposal of our Metals Ireland businesses and the decision to divest the Group’s SES businesses.

These divestments are part of the Group’s overall strategy of focusing its resources on its Plastics Division across what is now becoming a global platform. The integration of Encore is now a key priority for the Group following the successful integration of the July 2015 acquisition of IPL.

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Throughout 2016 your management team has continued to build on the positive momentum of recent years. Our strategy is clear and focused which is to exploit our strengths and competencies, to grow our Plastics business both organically and through acquisition where appropriate, and to increase shareholder value, within the envelope of our structures and capital resources.

Trading ResultsThe 2016 trading performance was ahead of expectations, largely driven by another year of strong performance from our Plastics division. This was achieved by the strong performance of IPL partially offset by a decrease in the year on year OPG performance, due to a number of factors, which are explained below. ClearCircle’s SES operations performed in line with expectations. The Irish Metals Recycling businesses were disposed of during the year. The decision has been made to dispose of the Irish and UK SES businesses and these, together with the results up to the date of disposal of the Irish Metals Recycling businesses, are presented as discontinued in the Income Statement and are also classified as assets and liabilities held for sale on the Statement of Financial Position. The Metals South recycling business in the UK had another strong performance year and was ahead of expectation.

Revenue for the year was €433.9 million (2015: €366.0 million). EBITDA was €55.2 million (2015: €36.1 million). The profit for the year before exceptional and non-recurring items and the Group’s share of equity-accounted investee profits amounted to €17.9 million (2015: €11.4 million). The profit for the year for 2016 amounted to €16.1 million (2015: €18.4 million). These results include both continuing and discontinued operations. Net debt (excluding Convertible Loan Notes) was €152.5 million at 31 December 2016 (2015: €120.3 million).

Our strategic goal is clear which is to grow our Plastics business both organically and through acquisition where appropriate.

Group Overview

PlasticsPlastics consists of two sub-divisions, one being IPL and the other being OPG. Plastics supplies products to a broad range of customers in Ireland, the UK, North America and China from eleven production facilities (three in the UK; one in Ireland; one in China; and six in North America). Plastics is engaged in the supply and distribution of manufactured products across three primary business categories as follows:

• Packaging – rigid plastic packaging for the food service, pharmaceutical, material handling, agricultural and adhesive coating industries;

• Environmental Containers – wheeled bins and caddies for the waste management and recycling industries; and

• Industrial Products – manufacturing partner to blue chip customers in the construction, furniture and material handling sectors.

ClearCircleClearCircle is the umbrella brand for SES which includes hazardous waste management, industrial services and materials recycling businesses in Ireland and the UK. It also includes the Group’s Metals Recycling businesses. During the year, the Group disposed of its Irish Metals Recycling businesses and is in the process of disposing of its Irish and UK SES businesses. The only remaining ClearCircle business will be our Metals South recycling businesses in the UK. The results of ClearCircle are presented as discontinued in this Annual Report with the exception of Metals UK South recycling which are presented within results from continuing operations.


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2016 2015*

€’m €’m

Revenue 331.1 231.8*

EBITDA 48.8 33.1*

EBTIDA Margin** 14.7% 14.3%

* IPL was acquired in July 2015.** EBITDA Margin is before the allocation of any One51 central overhead costs.

Plastics has a portfolio of injection moulding businesses which, as well as developing and designing its own products, offers a full contract manufacturing service. The strategy is to strengthen the position of the Plastics business as a leading provider of quality plastics products to a variety of end users across a global market while enhancing margins through innovation and operational excellence.

Plastics Division

Overall, Plastics recorded solid underlying trading in 2016 which was boosted significantly by the full year impact of IPL. Revenue was €331.1 million in 2016 (2015: €231.8 million) and EBITDA was €48.8 million (2015: €33.1 million). The reported revenues in 2016 were adversely impacted by foreign currency exchange rate movements in an amount of €10.8 million, when compared with 2015.

The Group has a strong and profitable product portfolio across retail packaging, industrial products, bulk packaging and environmental containers. The products range from food containers, bowls, lids and tubs, to wheeled bins and other waste disposal containers, to crates, trays and paint containers, amongst others.

There are 11 manufacturing facilities and two research and development facilities located in the US, Canada, the UK, Ireland and China. Customers are also predominantly based in these territories with the US representing the largest end market.

Chief Executive’s Review (continued)

Customers, many of whom are blue-chip organisations, are loyal, diversified and profitable. The current footprint of operations and customers presents an opportunity to expand into new markets to both sell to new and cross sell to existing customers, many of whom have global operations.

The key strategic objective is to continue to grow the Plastics business globally, expanding the range of customers and end markets served, through:

• Organic growth – including investing in enhanced operational capabilities, expanded geographic coverage and new technologies and product ranges;

• Optimising synergies – arising from the further integration of IPL and OPG – including sales, operations, R&D, finance, IT and procurement; and

• Acquiring companies – in the retail packaging and bulk packaging sectors with a European and North American presence.


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Plastics Division

IPL 2016 2015*

€’m €’m

Revenue 204.3 86.6*

EBITDA 31.6 12.6*


* IPL was acquired in July 2015.** EBITDA Margin is before the allocation of any One51 central overhead costs.

IPL, following the acquisition of Encore, now occupies approximately 1,200,000 square feet of manufacturing and warehousing space and employs approximately 1,000 people across six operating sites. IPL operates a modern and extensive suite of approximately 120 moulding machines across its sites.

The acquisition of IPL significantly increased the Group’s international reach and provided One51 with a platform for future growth in North America thereby providing the Group with access to significant new markets for existing products. It also allows One51 to bring a wide range of exciting new products, especially in food packaging and bulk containers, to existing OPG customers. I am pleased to note that both the financial and operational performance since acquisition and the integration of IPL has been a key driver of the recent success and transformation of the Group.

IPL is a leading North American manufacturer of injected moulded plastic products. From its original three manufacturing plants in Saint Damien (Canada), Edmundston (Canada) and Lee’s Summit (US), the company manufactures waste carts, bulk packaging, retail packaging and material handling containers.

It comprises two constituent divisions, namely Retail and Bulk & Environment (“B&E”) packaging. The former has two production facilities: Edmundston in New Brunswick which manufactures thin-wall containers primarily for the regional Canadian market; and Lee’s Summit,

Missouri, which services a national market for retail lids and over-caps. During the year, the Lee’s Summit facility operations have also been expanded to increase the supply of retail packaging in the US market. The B&E division has a single production facility in Saint Damien, Canada, which produces waste carts, bulk packaging and material handling containers.

In November 2016, IPL acquired, for a consideration of USD$35.0 million, a 100% shareholding in Encore, a company in the B&E sector, headquartered in Ohio, United States with manufacturing facilities in Ohio, Georgia and Minnesota. This acquisition provides the B&E division with a manufacturing presence in the United States and the ability to access a much wider customer base in that market. Furthermore during the year, IPL announced a significant development capital expenditure programme across both the B&E and Retail divisions (totalling CAD$36.0 million), thus positioning the business further on its growth strategy in North America.

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The acquisition of Encore and the capital investment plan being undertaken by IPL represents a significant opportunity for IPL to expand its geographic footprint and broaden its product offering across the growing North American rigid plastic packaging market – a key growth area for the Group.

The acquisition of Encore will be earnings enhancing from FY2017 and will provide expansion opportunities in the growing North American plastic industrial packaging market. In addition, Encore had a high quality and complementary customer base that will provide cross-selling opportunities for IPL and Encore’s products. Encore’s capital base is well invested, the manufacturing facilities are strategically and well located with capacity for material expansion to meet customer demand together with an extensive distribution network across the United States. Encore also deliver new product development opportunities across the Group through knowledge sharing and transfer and, furthermore, will provide the opportunity for procurement and other synergies.

IPL continues to perform strongly and is experiencing strong demand for its products in Canada and the United States. The acquisition of Encore together with the recently announced development capital expenditure programme will enable IPL to accelerate its geographic expansion and customer reach across Canada and the United States through the expansion of both IPL and Encore’s operations to meet this market demand.

OPG2016 2015

€’m €’m

Revenue 126.9 145.2

EBITDA 17.2 20.5

EBTIDA Margin* 13.5% 14.1%

* The EBITDA Margin is before the allocation of any One51 central overhead costs.

OPG operates from five sites across Ireland, the UK and China occupying approximately 400,000 square feet of manufacturing and warehousing space and employing over 500 people. OPG operates a modern and extensive suite of approximately 130 moulding machines across its sites.

OPG’s ambition is to continue to strengthen its market position in the three sectors in which it operates (i.e. Packaging, Environmental Containers and Industrial Products). The division plans to improve profitability by increasing volumes and enhancing margins through innovation and operational excellence. OPG focuses on operational excellence in production, procurement activities, customer service initiatives and in financial management. It has specific performance targets identified for each of these areas.

Revenue for the year in OPG was €126.9 million (2015: €145.2 million) and EBITDA was €17.2 million (2015: €20.5 million). OPG 2016 revenues as compared with 2015 revenues were negatively impacted in the amount of €11.0 million primarily by adverse movements in Pound Sterling to euro exchange rates. This principally arose following the UK’s decision to exit the European Union. The decrease in OPG EBITDA has been caused by currency movements driven by a weakening Pound Sterling during the year (unfavourable impact of €1.0 million on a constant currency basis year on year), the comparative year’s results having included one significant higher margin contract and by costs incurred in relation to the reconfiguration of certain production processes at one of our UK operations. The costs in


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Plastics Division

relation to the latter were incurred so as to align that business as it transitions its operations to service a broader range of customers in the UK packaging marketplace.

In Ireland, OPG supplies a range of containers to the agricultural and decorative coatings industries, and also manufactures bespoke products for multinational companies serving the nutrition, pharmaceutical and computer storage sectors. Its manufacturing plant in China supports the Irish operation by producing bespoke products for the computer storage sector which allows it to support the global supply chain of its customers. In the UK, MGB Plastics and Straight manufacture and supply wheeled refuse bins and other recycling containers for the UK market. OPG is the largest wheeled bin and recycling container producer in the UK, with customers in both the public and private sectors. In addition, the AAC business contract manufactures a range of other high-volume items, including construction products, school chairs and trays, for a number of blue-chip clients. As well as supplying paint containers to the decorative coatings industry in the UK, PPC following the reconfiguration of its production processes during the year, has expanded its product portfolio and now supplies plastic pail containers to a range of industries such as the fencing and adhesive markets.

OPG has a significant number of high-profile multinational customers in Ireland and the UK and has developed plastic products in partnership with a number of blue chip international companies. The OPG management team actively manages these relationships while continuously exploring opportunities to better

serve the ever changing requirements of customers. The OPG R&D design centre is increasingly working with OPG’s customers in designing new products, changing the design of existing products, testing and prototyping new designs in response to ongoing changes and needs in end markets.

OPG commissioned its €8.0 million investment in its state of the art food grade manufacturing facility located at its existing site in Cork during the year. The investment is targeted at enabling OPG to produce innovative packaging products to support the growing Irish food industry. The investment has resulted in the new food grade manufacturing facility adopting best in class production technologies and automation. The new investment commenced supplying customers in the final quarter of 2016.

The plastics manufacturing facility in Shanghai, China was originally developed to service the multinational operations of one large Electronics customer. During the year, the manufacturing footprint of the facility was doubled to cater for rising customer demand and also to ensure that our facilities are appropriately configured for an increased number of customers to be serviced in the future.

New food grade packaging manufacturing facility – Cork

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TM


ClearCircle Environmental

2016* 2015*

€’m €’m

Revenue 102.8 134.2

EBITDA 10.3 9.1


* ClearCircle results are presented as discontinued (see note 3) with the exception of Metals UK South recycling results which are presented as continuing and included as “other reconciling items” in note 3.** The EBITDA Margin is calculated before the allocation of any One51 central overheads.

ClearCircle is the umbrella brand for the Group’s held for sale Irish and UK SES activities, the recently disposed of Metals Recycling activities in Ireland and the continuing Metals South recycling activities in the UK.

The businesses within the division provide a range of environmental services including hazardous waste management activities and services and the recovery of resources for recycling and reuse in a sustainable manner. The division generated revenue of €102.8 million during the year (2015: €134.2 million) and EBITDA of €10.3 million (2015: €9.1 million), which includes the results of our continuing Metals UK South recycling businesses. In September and October 2016, the Group disposed of its Irish Metals recycling businesses, following on from the 2015 divestment of the Metals North recycling operations in the UK. Prior to year end, the Group made the decision to divest of its SES businesses in Ireland and the UK. The disposals and planned disposals will enable the Group to focus its resources on its core Plastics businesses.


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ClearCircle Environmental

Specialist Environmental Services (“SES”)ClearCircle’s island of Ireland SES businesses are Rilta Environmental Limited (“Rilta”) and ClearCircle Environmental (NI) Limited (“CCNI”). Rilta is licensed by the Environmental Protection Agency and has ISO 9001 and 14001 accreditations. The key activities of Rilta include waste brokerage, contaminated soil disposal, waste oil collection and recycling, industrial services, waste treatment, recycling waste packaging, recycling transformers, asbestos disposal and lead acid battery collection and disposal. A market leader within many of its chosen service segments, Rilta is well positioned to benefit from the continued upturn in domestic economic activity. Rilta remains focused on customer service, providing innovative solutions and adapting to new market opportunities. CCNI is a materials recycling operation located in Northern Ireland which is engaged in remediation of end-of-life white goods (principally refrigerators) and glass recycling. During the year, the Group completed its investment in a new refrigeration recycling facility at its Toomebridge, County Antrim facility. This facility has the ability to serve the marketplace for the whole of the island of Ireland.

ClearCircle’s UK SES business is Future Industrial Services Limited (“Future”). During the year, Future acquired H&T and the business and assets of Bale and this has enhanced the SES presence across the UK, providing the business with a much greater geographic footprint in that marketplace. These acquisitions follow the September 2015 acquisition of the Greenway Environmental Services Limited business (“Greenway”). Future is permitted by the UK Environmental Agency and holds ISO 9001 and 14001 accreditations. The business provides hazardous waste management and industrial services from locations in Liverpool, Newport, Berwick-upon-Tweed, Rugby, Portsmouth, Plymouth and Honiton.

The SES business delivered a solid performance during the year and is benefiting from the underlying economic recovery in the UK and Ireland.

Revenue in the SES businesses increased by 26.2% in 2016 to €57.3 million (2015: €45.4 million) as a result of an increase in project related work in Ireland and the bolt-on acquisitions in the UK. EBITDA for the business increased by 35.5% to €5.8 million (2015: €4.3 million) together with an increase in EBITDA margin to 10.1% (2015: 9.4%).

Metals RecyclingThe Metals Ireland business disposals during 2016 follow the 2015 divestment of the Metals North recycling operations in the UK.

Since the disposals of Metals Ireland, the Group’s metal recycling operations now consist of the highly performing Metals UK South recycling operations. These operations are engaged in scrap metal processing, end of life vehicle processing and ferrous/non-ferrous metals trading.

Revenue in the Metals recycling businesses decreased by 48.8% in 2016 to €45.4 million (2015: €88.8 million) primarily as a result of the disposal of our Irish metals recycling businesses in September and October 2016 and the divestment of our Metals North UK business during 2015. EBITDA for the combined businesses decreased by 6.1% to €4.6 million (2015: €4.9 million) and the EBITDA margin increased to 10.0% (2015: 5.5%).

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Environmental, Health and SafetyHealth and Safety is a key priority for the Group and for all divisional and operations general managers who, under the Group Health and Safety Policy adopted by the Board, are responsible for compliance with all Health and Safety legislation. Compliance with environmental legislation and regulation applicable to each business is also the responsibility of divisional and operations general managers. The Group continues to obtain and maintain various licences, environmental permits, exemptions and consents where applicable. Health and Safety performance at divisional and operational levels is monitored on an ongoing basis.

InvestmentsAltas Investments plcOne51 continues to hold a 23.6% interest in Altas Investments plc (‘Altas’). The Group’s share of Altas’ profits in the year amounted to €3.9 million (2015: €24.3 million). The prior year comparative included Altas’ profit on disposal of its US wind assets. The Group’s 23.6% interest in Altas is carried at €4.0 million at 31 December 2016.

Pioneer Green Energy LLCOne51 continues to hold its 13.7% stake in Pioneer Green Energy LLC (“Pioneer”). Pioneer is a US wind and solar energy development company. The Group originally invested €1.4 million in Pioneer. During 2016, we received €3.0 million of dividend income (2015: €2.3 million) from Pioneer. The fair value of our investment as at 31 December 2016 is €1.2 million (2015: €1.2 million).

Group StrategyThe Group’s strategy is focused on the development and growth of our core Plastics operations, through both organic and acquisition led initiatives.

The rationale for pursuing this strategy is clear. The rigid plastic packaging market is the largest component of the Plastics packaging market. The rigid plastic packaging segment is driven by innovation, the substitution effect (from traditional forms of packaging), increasing population growth and urbanisation. This growth has primarily come as a result of growing demand in emerging markets, but also at the expense of traditional pack types such as glass bottles and jars, liquid cartons and metal cans. Plastic is commonly preferable due to its lightweight construction, shatter resistance and the flexibility to mould into various shapes. High clarity polymers are also increasing opportunities for value-add (such as more convenient and easy to open packs). Demographic trends including older populations, urbanisation and emergence of smaller households have all altered the market. In Europe and North America, smaller pack sizes have become prominent due to smaller households. We believe that One51 is well positioned in terms of scale, size, technology capabilities, geographic footprint and management expertise to exploit these market opportunities.

The acquisition of Encore, along with the development capital expenditure programmes in North America, Ireland and the UK during the year, the disposal and planned disposal of the Metals Ireland and SES UK and Irish businesses (respectively) supports the strategic objectives of the One51 Group, which is to develop and grow organically and by acquisition our core Plastics business. This will be achieved through focusing on higher margin opportunities with good growth characteristics and clear competitive advantages and by implementing our lean operating processes and financial management experience, leveraging cross-selling opportunities and exploiting cost synergies from acquired businesses.

We are also focused on efforts to maximise synergies and leverage our expertise across our international locations.


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The operating model for the coming years is focused on:

• fully realising the synergy potential of OPG and IPL, including sharing of technical expertise, leveraging the collective intellectual property and customer relationships, and procurement efficiency;

• the pursuit and realisation of higher margin sales opportunities, focusing on customers with value-add requirements;

• a more systematic targeting of the larger US market (from a One51 perspective) for retail packaging, waste carts and bulk packaging through a stronger and more coordinated sales effort and through acquisition; and

• the realisation of cost efficiencies in production including, but not limited to, a more stringent commercial evaluation of capital investments and the increased automation of production.

Given the strong growth experienced by Plastics, including the recent acquisitions and development capital expenditure projects, we are investing to facilitate a broadening of the product range and to drive continued improvements in operating margins. We are also focused on efforts to maximise synergies and leverage our expertise across our international locations. In tandem with these organic initiatives, the division will continue to consider complementary acquisitions that make sound strategic sense.

Management and EmployeesThe last five years has seen profound change and development in the fortunes of One51. The culmination of many years of restructuring, divestment of non-core businesses, de-leveraging and subsequent growth has resulted in a focus on the Group’s core Plastics division.

I would like to thank management and employees, both long serving and more recent members of the Group, for their continued hard work, support, commitment and dedication. All that has been achieved in recent years is due to the significant efforts of all our people.

Chief Executive’s Review(continued)

The acquisitions of IPL in 2015 and Encore in 2016 together with a number of significant development capital expenditure programmes across Plastics, has significantly increased the geographic footprint, market offering and product range in Plastics and puts the business on a strong footing for future growth.

ConclusionWe continue to maintain a cautious stance around geopolitical risks, an uncertain global economic climate and the outlook for the UK economy in the wake of Brexit and the shape of Britain’s possible exit from the EU. Despite these challenges, we remain confident in the ability of the Group to grow profitably into the future.

2016 was a year characterised by a strong performance for the Group, notwithstanding the foreign exchange headwinds, with our businesses delivering despite facing and overcoming various challenges in their end markets. In addition, the acquisitions of IPL in 2015 and Encore in 2016 together with a number of significant development capital expenditure programmes across Plastics, has significantly increased the geographic footprint, market offering and product range in Plastics and puts the business on a strong footing for future growth. We have continued to seek cost efficiencies where appropriate and have also continued to invest in businesses to facilitate growth and to drive increased operational efficiencies.

As we move towards our next phase of growth, having the appropriate capital structure, having access to alternative forms of capital and enhancing liquidity in the Company’s shares are continuing key areas of focus. We have identified and are exploring a number of other growth opportunities, both organic and inorganic to further grow shareholder value, within the envelope of our capital resources and existing structures.

Alan WalshChief Executive Officer16 March 2017

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HighlightsThe operating financial highlights for 2016 were as follows:

• Revenue increased by 18.6% year on year to €433.9 million (2015: €366.0 million), due primarily to the full year impact of the July 2015 acquisition of IPL. It was also impacted, to a lesser extent, by the acquisitions of Encore in November 2016 and H&T and Bale earlier in the year.

• Revenue from continuing operations increased by 38.5% to €348.2 million (2015: €251.4 million), primarily due to the full year effect of IPL’s result in 2016.

• Group EBITDA (before exceptional items, non-recurring items and the Group’s share of equity-accounted investee profits) showed an increase from €36.1 million in 2015 to €55.2 million in 2016, despite some negative headwinds from a weakening Pound Sterling.

• Group profit for the year from continuing operations before tax and before exceptional items amounted to €25.4 million (2015: €36.5 million). Included in this number is a credit of €3.9 million (2015: €24.3 million), being the Group’s share of Altas’ profit for the year.

• Group profit for the year before exceptional and non-recurring items and the Group’s share of equity-accounted investee profits amounted to €17.9 million (2015: €11.4 million).

• Group profit for the year was €16.1 million compared with €18.4 million in 2015, an €8.9 million negative movement in exceptional, non-recurring and Altas profits being the key reasons for the decrease.

• Total equity at 31 December 2016 amounted to €118.6 million compared with €152.6 million at 31 December 2015, the €37.8 million increase in the fair value of the Put Liability relating to the IPL 33.3% shareholding not owned by the Group, being the key driver. Total equity was also negatively impacted by unfavourable foreign currency translation movements of €12.3 million. Excluding the effect of the Put Liability, there was a 3.2% increase year on year.

• Net debt (excluding Convertible Loan Notes) increased during the year by €32.2 million to €152.5 million at year end (2015: €120.3 million), the increase caused primarily by the draw down of bank borrowings to fund the Encore acquisition and capital expenditure projects.

Group profit was impacted favourably by €3.9 million (2015: €24.3 million), being the Group’s share of after tax profits of its equity-accounted investee, Altas Investments plc. It was impacted unfavourably by a net €6.2 million charge (pre-tax) relating to exceptional and non-recurring items (2015: €17.7 million). These items are summarised below in this Review, and in notes 4 and 7 to the financial statements.

Financial Review

The trading performance of the Group in 2016 was ahead of expectations and the Group ended 2016 in a solid financial position.

Overall EBITDA Margins improved from 9.9% in 2015 to 12.7% in 2016 and the Adjusted Earnings per Share metrics improved considerably from prior year as a consequence of the strong performance of IPL driven by the strong organic growth in Plastics in North America (both Canada and the United States). We invested heavily in development capital expenditure projects in 2016, the benefit of which should flow to earnings in future years. Free cash flow conversion was strong in the year at 67% of EBITDA, up from 51% in 2015.

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Amounts included in the Group Income Statement relating to discontinued operations include those of the Metals Ireland recycling businesses and the Irish and UK SES businesses. The comparative Income Statement amounts have also been restated as discontinued in respect of these operations. Furthermore, the comparative amounts have been restated to include the results of the Metals North UK recycling business, divested during 2015, as discontinued. A full segmental analysis including continuing and discontinued operations results is set out in note 3.

Key Performance MetricsThe Group uses a number of key performance metrics to assess its financial performance.

2016 2015 2014

Revenue growth 18.6% 32.4% 10.2%

EBITDA growth 53.1% 67.1% 5.9%

EBITDA margin1 – overall 12.7% 9.9% 7.8%

EBITDA margin1 – Plastics 14.7% 14.3% 12.8%

EBITDA margin1 – ClearCircle 10.1% 6.8% 7.0%

Adjusted diluted EPS growth 58.2% 30.5% 30.8%

Total equity growth (excluding Put Liability) 3.2% 37.8% 59.0%

Operating cash flow €55.5m €33.7m €24.7m

Free cash flow €36.9m €18.4m €8.4m

Net debt (increase)/decrease (€32.2m) (€112.9m) €32.9m

EBITDA Interest cover (times) 6.2x 6.3x 5.5x

Net Debt: EBITDA (times) 2.8x 3.3x 0.3x

1. EBITDA margin represents EBITDA as a percentage of revenue.

Accounting Policies and basis of preparation of the 2016 Financial StatementsThe Group’s financial statements are prepared in accordance with International Financial Reporting Standards (‘IFRSs’) and their interpretations issued by the International Accounting Standards Board (‘IASB’) as adopted by the EU. Details of the basis of preparation and the significant accounting policies of the Group are included in note 1 on page 65.

RevenueGroup revenue increased in 2016 to €433.9 million from €366.0 million in 2015. Revenue can be analysed as follows:

2016 2015

€’m €’m

Plastics 331.1 231.8

ClearCircle 102.8 134.2

433.9 366.0

Revenue in Plastics grew significantly in the year, primarily due to the impact of strong organic growth in North America and the full year’s revenue from IPL, acquired in July 2015 and, to a lesser extent, the impact of the Encore acquisition in November 2016. The decrease in revenue in ClearCircle was driven by the disposals of the Metals Ireland businesses in September and October 2016 and the Metals North UK business divested during 2015. €85.7 million (2015: €114.6 million) of ClearCircle revenue relates to discontinued operations, including the SES businesses in Ireland and the UK.

A detailed commentary on the trading performance for the year is included in the Chief Executive’s review on pages 12 to 22.

EBITDAManagement believes that EBITDA, while not defined under IFRSs, provides a fair reflection of the underlying trading performance of the Group. The Group believes that this measure provides useful historical financial information to help investors evaluate the performance of the underlying business and is a measure commonly used by certain investors and securities analysts for evaluating the performance of the Group. EBITDA represents earnings before interest, tax, depreciation, amortisation, exceptional items, non-recurring items and the Group’s share of profit from its equity-accounted investee. EBITDA is reconciled to the Income Statement in note 3 to the financial statements.

Total EBITDA increased by 53.1% to €55.2 million in 2016 (2015: €36.1 million). This is analysed as follows:

2016 2015

€’m €’m

Plastics 48.8 33.1

ClearCircle 10.3 9.1

Other reconciling items (3.9)* (6.1)*

55.2 36.1

* Other reconciling items represents the Group’s central costs of €3.9 million (2015: €6.1 million). Included in central costs is a credit of €1.6 million (2015: €0.2 million) arising from the translation of certain intergroup balances.


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EBITDA has improved markedly in Plastics despite OPG EBITDA being negatively impacted in the amount of €1.0 million year on year due to a weakening Pound Sterling and costs incurred in relation to the re-configuration of certain production process at one of our UK operations. OPG’s prior year results also included one significant higher margin contract. The overall Plastics result was positively impacted by the inclusion of IPL’s results for the full year 2016. IPL contributed €31.6 million (2015: €12.6 million) to EBITDA in the year. This was partially offset by a decrease in OPG’s EBITDA to €17.2 million (2015: €20.5 million). EBITDA in ClearCircle increased from €9.1 million in 2015 to €10.3 million in 2016, reflecting an improved performance in the SES businesses and a further year of strong performance from Metals UK South recycling.

Exceptional & Non-Recurring Items – continuing and discontinued operationsThe table below summarises the exceptional and non-recurring items which have impacted on the 2016 financial results.

2016 2015

€’m €’m

Non-recurring items (credit)/charge (1.3) 3.7

Gain on settlement of loan with third party (4.0) -

Costs incurred with deferred IPO process 2.1 -

Acquisition, aborted acquisition and post acquisition integration costs 2.6 8.2

Loss on disposal of subsidiary/discontinuation of operations 5.7 7.0

Impairment charge on property, plant and equipment 0.3 3.0

Impairment charge on available-for-sale financial asset - 2.1

Gain on disposal of associate undertaking - (6.6)

Other items 0.8 0.3

Total net charge to income statement 6.2 17.7

Of the net charge of €6.2 million (2015: €17.7 million), a net credit of €0.6 million (2015: net charge of €4.4 million) relates to continuing operations and a net charge of €6.8 million (2015: €13.3 million) relates to discontinued operations.

Non-recurring items in the current year include income of €3.0 million (2015: €2.3 million) relating to the Group’s investment in Pioneer Green Energy LLC. This has been included in other operating income. Non-recurring items also include redundancy costs and costs associated with restructuring activities within the Group. Also included is manufacturing profits in inventory when Encore was acquired. These costs have been included in other operating expenses in the current year.

Further details on the nature of these exceptional and non-recurring items are included in notes 4 and 7 to the financial statements.

Net Finance CostsNet interest payable increased by €3.2 million to €8.9 million in 2016 (2015: €5.7 million) due primarily to the full year effect of the drawdown of bank borrowings and subordinated term debt for the purposes of acquiring IPL in July 2015 and, to a lesser extent, the Encore acquisition in November 2016.

Included in the 2016 charge is an amount of €0.1 million for convertible loan note interest (2015: €0.1 million).

The EBITDA to interest cover ratio at 31 December 2016 was 6.2 times (2015: 6.3 times).

TaxationThe tax charge for the year was €3.8 million (2015: €2.7 million), the increase primarily due to the full year impact of IPL results in 2016. €0.2 million (2015: €0.1 million) of the tax charge relates to discontinued operations.

Profit for the yearProfit for the year was €16.1 million compared to €18.4 million for the prior year.

Adjusted Earnings per ShareManagement believe that Adjusted Earnings per Share provides a fair reflection of the underlying trading performance of the Group before taking into account the impact of exceptional and non-recurring items and the Group’s share of after tax equity-accounted investee profits.

Adjusted Earnings per Share and Adjusted fully diluted Earnings per Share is calculated by dividing the Adjusted profit attributable to ordinary shareholders (which excludes exceptional and non-recurring items and the Group’s share of after tax equity-accounted investee profits) by the weighted average number of Ordinary Shares outstanding. In the case of Adjusted fully diluted Earnings per Share, the number of

Financial Review(continued)

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outstanding Ordinary Shares is adjusted for the effects of all Ordinary Shares and options with a dilutive effect.

In the current year, the Adjusted basic Earnings per Share is 11.46 cent (2015: 7.26 cent). The adjusted diluted Earnings per Share is 11.04 cent (2015: 6.98 cent).

Further details on earnings per share are included in note 12.

Group Statement of Other Comprehensive IncomeThe table below summarises the movements in the Group’s Statement of Other Comprehensive Income (excluding the profit for the year).

2016 2015

€’m €’m

Foreign currency translation differences1 (10.2) 0.7

Share of Altas Investments plc’s other comprehensive income (1.2) (1.3)

Put Liability – other equity movements2 (39.9) 0.1

Available-for-sale financial assets – net change in fair value3 0.8 -

Total other comprehensive income (50.5) (0.5)

1. The statement of other comprehensive income on page 60 contains a €10.2 million net accounting loss on the retranslation of the net investment in foreign operations (2015: net gain of €0.7 million). This is a non-cash adjustment in the Group financial statements and represents an accounting adjustment for the impact of translating non-euro assets and liabilities into euro from the end of the previous financial year to the end of the current financial year for assets/liabilities held throughout the year, and for the impact of the movement in exchange rates from the date of acquisition to the end of the current financial year for those assets/liabilities acquired during the year. The most significant exchange rate movements which impacted on the Group were the euro/Sterling rate which moved from 73.4p at 31 December 2015 to 85.6p at 31 December 2016 and the euro/Canadian dollar rate which moved from CAD$1.5116 on 31 December 2015 to CAD$1.4188 at 31 December 2016.

2. The Group applies the anticipated-acquisition method of accounting in respect of its 66.67% shareholding in IPL due to the presence of a Put Option in the Shareholders’ Agreement. The Group, therefore accounts for a Put Liability with movements in fair value accounted for through equity. The net impact of fair value and currency movements during the year amounted to a charge of €39.9 million (2015: credit of €0.1 million).

3. Included in the statement of other comprehensive income are the fair value movements on the Group’s available-for-sale financial assets. In the current year, the Group recognised a gain of €0.8 million (2015: €Nil) in the statement of other comprehensive income, arising on an increase in the fair value of the shares held by the Group in Aryzta AG.

Put Liability in respect of IPL 33.33% Minority ShareholdingThe Group’s liability in respect of the 33.33% shareholding in IPL that it does not own amounted to €72.2 million at year end (2015: €32.4 million).

When the Group acquired its 66.67% controlling interest in IPL in July 2015, it applied a basis of accounting called the “anticipated-acquisition” methodology on the basis of there being a Put and Call option in the Shareholders’ Agreement. This effectively meant that the Group anticipated acquiring the remaining 33.33% in July 2021, the date from which the Put and Call option becomes exercisable.

The effect of this is that instead of attributing a share of profit or loss, other comprehensive income and net assets to the minority shareholders, the Group carries a Put Liability, measured at fair value, representing the anticipated consideration required to acquire the minority interests’ shareholdings in July 2021, discounted to present value.

An anomaly from an accounting perspective is that the Group carries its 66.67% shareholding in IPL on a historic cost book value basis whereas the Put Liability is carried at fair value, taking into account future profitability, growth and indebtedness.

The net asset value of IPL in the Group’s financial statements on a historic cost book value basis is €99.0 million at 31 December 2016, which would imply the minority shareholders’ share of these being €33.0 million. Due to the fair value accounting methodology being applied, the Put Liability in respect of the minority shareholdings is carried at €72.2 million at year end.

The reason for the significant increase in the Put Liability from 31 December 2015 is primarily due to increases in IPL’s actual trading performance, change in capital structure, budgeted future earnings performance due to growth in its existing business and also the effect of the Encore acquisition in November 2016. These projections are based on the Board approved IPL Budget plan for 2017, 2018 and 2019, applying a steady growth rate to earnings after that period and then discounting these to present value.

Note 28 to the financial statements outlines in more detail the assumptions and judgements used in the Put Liability calculation and also the effect of the key sensitivities on the calculation.


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Total EquityTotal equity, excluding the IPL Put Liability, has increased from €184.9 million in the prior year to €190.9 million at the end of 2016. Including the Put Liability, total equity has decreased from €152.6 million to €118.6 million. The table below explains the main drivers of the increase in the total equity of the Group:

2016 2015

€’m €’m

Total equity at the beginning of the year 152.6 134.2

Profit for year 16.1 18.4

Movement in Put Liability relating to IPL (including translation movement) (39.9) 0.1

Foreign currency translation differences (10.2) 0.6

Other amounts included in other comprehensive income - (0.7)

Total equity at the end of the year 118.6 152.6

Put Liability at 31 December relating to IPL 72.2 32.4

Total equity at year end (excluding Put Liability) 190.9 184.9

Net debt

2016 2015

€’m €’m

Cash1 39.92 25.5

Bank loans relating to IPL (104.6) (76.2)

Bank loans non-IPL (55.3) (38.9)

Other loans relating to IPL (includes subordinated term borrowings) (32.5) (30.7)

Net debt (152.5) (120.3)

1. €23.3 million of the cash balances are held by IPL (2015: €3.5 million).

2. €0.6 million (2015: €Nil) is included within assets held for sale (see note 21).

The definition of net debt is defined by the Group as cash at hand and in bank less bank overdrafts and loans, less finance lease obligations. The definition of net debt excludes Convertible Loan Notes (see note 25).

Bank and subordinated term loans included above are different by €4.5 million (2015: €3.8 million) from those amounts included in the statement of financial position as the above amounts reflect the actual balances due to the lenders at the year end. The amounts included within the statement of financial position are calculated under the effective interest rate method as prescribed by IAS 39.

Capital StructureThe Group is financed principally through a combination of equity, bank borrowings, subordinated debt and free cash flow generated from operations.

At 31 December 2016, the Group had net debt of €152.5 million (2015: €120.3 million). Bank facilities are provided by separate Irish and Canadian banking syndicates. The Irish banking syndicate has provided €92.0 million of committed funding facilities. They have also provided significant uncommitted funding lines, including an invoice discounting facility of €15.0 million which was entered into in November 2015. The Irish banking syndicate committed facilities are due to mature in December 2020, with an extension negotiated during the year from the original maturity date of January 2019. On the acquisition of IPL in July 2015, the Group entered into a credit agreement with a syndicate of Canadian banks. During 2016, prior to the acquisition of Encore, this facility was further renegotiated and increased. The amended credit agreement provides for committed facilities of CAD$203.4 million (€143.4 million), with CAD$148.4 million (€104.6 million) provided by way of term loan (including a USD$33.5 million term loan) and CAD$55.0 million (€38.8 million) provided under a revolving facility. This credit agreement expires in July 2020, with an extension negotiated during the year from the original maturity date of July 2019. The Canadian facility is separate to the Group’s other facility and is “ring-fenced” to the IPL business.

The subordinated loans, which amounted to €31.7 million at 31 December 2016 (2015: €29.8 million), are provided by the Canadian minority shareholders in IPL.

The Group’s bank debt facilities provide the Group with the flexibility to take advantage of opportunities to develop the business, focusing on organic growth and strategic acquisitions which enhance shareholder value.


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Translation of Foreign CurrenciesThe presentation currency of the Group is euro which is the functional currency of the parent.

One51 has significant investments in non-euro denominated operations. The Group seeks to manage the resultant foreign currency translation risk through borrowings, where possible, denominated in the relevant currency. To the extent that such borrowings are not sufficient to fully hedge the investment in non-euro denominated operations, the Group has a net foreign exchange exposure in non-euro net assets.

Adjustments arising on the translation of the results of the foreign currency denominated operations at the average rates, and on the restatement of the opening net assets at closing rates, are accounted for within a separate translation reserve within equity (i.e., within the statement of other comprehensive income), net of differences on related foreign currency borrowings to the extent they are effective. The total movement in the year through other comprehensive income was a charge of €10.2 million (excluding movements relating to the Put liability).

Results and cash flows of the foreign currency denominated operations have been translated into euro at the average monthly exchange rates for the year and the related statements of financial position have been translated at the rates of exchange prevailing at the statement of financial position date.

All other translation differences are recorded in the income statement. The principal rates used in the translation of the results and statements of financial position into euro were as follows:

Average rate Closing rate

2016 2015 % Change 2016 2015 % Change

Canadian Dollar* 1.4669 1.4647 (0.2%) 1.4188 1.5116 6.2%

Chinese Renminbi 7.3494 6.9733 (5.4%) 7.3202 7.0608 (3.7%)

Pound Sterling 0.8187 0.7262 (12.7%) 0.8562 0.7340 (16.6%)

US Dollar* 1.1068 1.1003 (0.6%) 1.0541 1.0887 3.2%

* Canadian Dollar and US Dollar average rates are from the date of acquisition of IPL on 23 July 2015 to 31 December 2015.

Given its substantial non-euro denominated operations, approximately 95% of the Group’s EBITDA for the year ended 31 December 2016 was denominated in currencies other than euro, primarily Canadian Dollar, US Dollar and Pound Sterling. One51 hedged a significant amount of its translation exposure on the profits of these non-euro subsidiaries during the year. This was done in accordance with the Group’s internal Treasury Management policy, overseen by the Group’s Treasury function, which reports regularly to Group management and the Group’s Audit Committee.

The Group has ongoing operational trading exposures to multiple currencies, principally euro, Pound Sterling, Canadian Dollar and US Dollar, in the course of ordinary trading. Management requires all Group operations to manage their foreign exchange risk against their functional currency. The translation gain on these transactions included in other operating income (note 4) during the year amounted to €2.0 million (2015: €1.4 million) in respect of continuing operations. Where significant amounts of sales or purchases are invoiced in currencies other than the local currency, this is managed by the utilisation of forward foreign currency contracts.


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Free Cash Flow Free cash flow represents cash generated by Group activities and available for reinvestment elsewhere, including the early repayment of debt. Free cash flow for 2016 was an inflow of €36.9 million (2015: €18.4 million) analysed as follows:

2016 2015

€’m €’m

EBITDA before exceptional and non-recurring items and Group’s share of equity-accounted investee after tax profits 55.2 36.1

Foreign exchange gains (1.9) (1.4)

Exceptional and non-recurring items with a cash effect (excluding acquisition and disposal related exceptional costs) (2.0) (0.8)

Working capital movements1 9.9 2.5

Other (0.5) -

Net cash inflow from operating activities (before tax) 60.7 36.4

Maintenance capital expenditure2 (10.2) (9.5)

Finance costs paid (net) (9.2) (5.8)

Income tax paid (4.4) (2.7)

Free cash flow 36.9 18.4

Development capital expenditure (21.5) (14.3)

Disposals (including disposal costs) 3.4 3.7

Share redemption proceeds from equity-accounted investee (net of costs) - 51.2

Acquisitions (including related costs) (22.2) (177.9)

Equity issued - 0.1

Net (debt)/cash acquired on purchase of subsidiary (21.1) 0.6

Other – including effect of movements in exchange rates3 (7.7) 5.3

Movement in net debt in the year (32.2) (112.9)

1. Excludes €0.9 million (2015: €Nil) of working capital funding post acquisitions.

2. Maintenance capital expenditure is the minimum capital expenditure that a business must spend to maintain current output and continue to exist in its current state. Maintenance capital expenditure in respect of continuing operations amounted to €7.7 million in the year (2015: €7.6 million).

3. The most significant amount included in this balance is foreign exchange movement arising on Canadian borrowings.

Risk ManagementThe Group’s international operations expose it to different financial risks that include currency risk, credit risk, liquidity risk and interest rate risk. The Group has a risk management programme in place, which includes a Group Treasury Policy, which seeks to limit the impact of these risks on the financial performance of the Group.

The Board has determined the policies for managing these risks. It is the policy of the Board to manage these risks in a non-speculative manner. Details of the Group’s risk exposures and the controls in place to monitor such exposures are set out in Note 35 to the financial statements.

Pat DaltonChief Financial Officer16 March 2017


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Directors’ Biographies

Directors’ Report





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Directors’ Report


Denis Cregan*

Alan Walsh

Pat Dalton

Pat Gilroy*

Board of Directors

Denis Cregan (71) was appointed as Chairman of the Board of One51 with effect from 31 December 2012, having been co-opted to the Board on 26 April 2012. Denis is a member of the Nomination Committee. Denis also currently serves as Chairman of Kerry Airport and is a Director of Ornua (formerly the Irish Dairy Board). He is a retired Director of Kerry Group plc and Tourism Ireland and has previously worked with the Irish Department of Finance, Express Foods, Grand Metropolitan Hotels, as well as Kerry Group, where he was a member of the founding management team and served as an Executive Director.

Alan Walsh (40) (FCA, AITI) was appointed to the Board on 16 September 2009. In November 2011, Alan was appointed as Chief Executive Officer, having served since 1 July 2011 as interim Chief Executive Officer. Prior to that he was the Chief Financial Officer of the One51 Group from July 2009. Alan qualified as a Chartered Accountant with KPMG and subsequently worked with Matheson and AXIS Capital. He graduated from University College Dublin with a degree in International Commerce. Alan is a member of the Nomination Committee and is also a Non-Executive Director of Altas Investments plc and Pioneer Green Energy LLC.

Pat Dalton (51) (FCA, AITI) joined the Group in 2012 as Chief Financial Officer, and was appointed as an Executive Director to the Board on 31 December 2012. Pat worked for GPA Group plc from 1992 and was appointed CFO of debis AirFinance B.V, which acquired GPA Group plc in 2000. He was then CFO of Bord Gáis Éireann from 2002, before joining a privately held international Property group as CFO in 2006. Pat is a graduate of University College Dublin.

Pat Gilroy (45) was co-opted to the Board on 1 September 2016. Pat is an engineering graduate of University of Dublin, Trinity College and joins the Board as a Non-Independent Non-Executive Director representing IIU Nominees Limited. Pat was previously Country Director of Veolia Ireland and the Chief Operating Officer for the Industrial Customers Group of Veolia UK and Ireland. He is currently Managing Director of Designer Group in Ireland. Pat was made a Chevalier Ordre Du Merit by the French President in November 2015. Pat also previously held roles in the ESB, Amdahl Ireland Limited and EEL FM Limited before heading up FP2 Limited. Pat is a Board Member of the Sustainable Energy Authority of Ireland (SEAI) and a member of the IBEC National Council and was formerly Secretary of the Energy Institute in Ireland and President of the Ireland France Chamber of Commerce. Pat won an All-Ireland Senior football medal with Dublin in 1995 and at club level with St Vincent’s in 2008. In 2011, Pat helped the Dublin Senior Gaelic football team to All Ireland success.

Group Chairman Chief Executive Officer Chief Financial Officer

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Rose Hynes*

Hugh McCutcheon*

Geoff Meagher*

Dalton Philips*

Rose Hynes (59) was appointed Senior Independent Director of One51 with effect from 31 December 2012. Rose was co-opted to the Board on 26 April 2012, and is a member of the Audit Committee. She is currently Chairman of Origin Enterprises plc and also chairs Shannon Group plc and is the Senior Independent Director of Total Produce plc. Rose previously held a number of senior management positions with GPA Group plc and is a former Board member of a number of companies including Fyffes plc, Aer Lingus Group plc, Bank of Ireland and a former Chairman of Ervia. Rose is a lawyer and is also an Associate of the Irish Institute of Taxation and the Chartered Institute of Arbitrators.

Hugh McCutcheon (63) was co-opted to the Board on 19 January 2015. He is Chairman of the Remuneration Committee and a member of the Audit Committee. Hugh is a Chartered Accountant and was formerly head of corporate finance at Davy. He joined Davy in 1989 from PwC, where he qualified as a Chartered Accountant in 1979. Hugh is the Senior Independent Director of Origin Enterprises plc. Hugh is also an Alternate Director at the Irish Takeover Panel.

Geoff Meagher (67) was co-opted to the Board on 20 February 2013. He is Chairman of the Audit Committee and is a member of the Remuneration Committee. He is a Certified Public Accountant. Geoff worked with PwC and Kilkenny Engineering Products, and served with Glanbia plc from 1992 to 2009, where he was Group Finance Director, and latterly Deputy Group Managing Director. Since 2009, Geoff has operated his own consultancy business. He also serves on the Board of Enterprise Ireland and Bon Secours Health System Limited.

Dalton Philips (49) was co-opted to the Board on 1 September 2016. Dalton has a BA from University College Dublin, a MBA from Harvard Business School and an honorary Doctorate of Management from Bradford University and joins the Board as an Independent Non-Executive Director. Dalton is currently a Senior Advisor with The Boston Consulting Group, Chairman of Byron Burger and The Ridgeons Group and is a non-Executive Director of Wilko and The Social Innovation Fund. Dalton was previously Chief Executive Officer of Wm Morrison Supermarkets Plc in the UK, Chief Operations Officer of the Weston Family’s Canadian business Loblaw Companies Limited and Chief Executive Officer of the Brown Thomas Group. Dalton previously also held senior roles with Walmart in Brazil and Germany and with Jardine Matheson in New Zealand, Australia and Spain.

* Non-Executive


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Results Revenue at €433.9 million was 18.6% higher than 2015 (2015: €366.0 million). EBITDA before exceptional items, non-recurring items and the Group’s share of equity-accounted investee profits amounted to €55.2 million (2015: €36.1 million), an increase of 53.1% on the prior year. The Group made a profit for the year of €16.1 million after accounting for exceptional items, giving rise to a basic earnings per share from continuing operations of 13.02 cent and diluted earnings per share of 12.55 cent compared with a basic and diluted earnings per share in 2015 from continuing operations of 19.92 cent and 19.15 cent, respectively.

The financial statements for the year ended 31 December 2016 are set out on pages 59 to 141.

DividendsThe Directors do not recommend the payment of a dividend (2015: €Nil).

Board of DirectorsFull details regarding Directors required to retire by rotation in accordance with the Articles of Association and their decision to offer themselves for re-election, where eligible, can be found in the Directors’ Statement on Corporate Governance on pages 41 to 45.

Directors, Secretary and their interestsInformation in relation to the beneficial and non-beneficial interests in the share capital of Group companies held by the Directors and Secretary who held office at 31 December 2016 is contained within the Report of the Remuneration Committee on Directors’ Remuneration on pages 50 to 54.

Risk management, including principal risks and uncertaintiesRisk management is the responsibility of the One51 plc Board of Directors and is under continuous review and assessment given its significance to the Group’s ongoing performance and the achievement of the Group’s overall strategic objectives.

The Board is responsible for establishing and ensuring that appropriate systems and controls are in place and maintained throughout the Group to ensure that compliance is maintained.

Under delegation from the Board, the Audit Committee monitors the risk management systems and compliance with the systems.

Directors’ Report

The Directors present the annual report and audited consolidated financial statements of the Group for the year ended 31 December 2016.

Principal activities, business review and future developmentsThe principal area of activity of One51 plc (“the Group”) is its Plastics Division.

The Group is in the process of divesting its Specialist Environmental Services businesses, having disposed of its Irish Metals Recycling businesses during the year.

Key operating subsidiary companies are listed in note 33.

The information to be included with respect to the review of the business and future developments as required by Section 327 of the Companies Act 2014 is contained in the Chief Executive’s Review on pages 12 to 22.

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The Group has in place a “three lines of defence” model which is headed by the One51 Board, with appropriate delegation to the Audit Committee who in turn maintain ongoing oversight of and communication with the Executive Risk Management Group. The Risk Management Framework in place includes a divisional structure whereby separate Risk Registers are maintained by each Division/sub-division.

The Group is required under Irish Company Law to give a description of the principal risks and uncertainties that it faces. The principal risks and uncertainties are set out below, including risk description and what mitigating actions the Group has in place in respect of these risks:

Risk area Risk description Mitigating actions Other comments/changes

Economic, strategic and operational

Customer demand and end market geopolitical environment

Demand for goods and services in the Group’s businesses is influenced by global and national economic circumstances. The geopolitical environment in those markets can be an influencer of customer demand.

The Group maintains ongoing communication with customers to understand key market impacting factors and to gauge the future impact of key events that have taken place or other events foreseen. The Group also aims to ensure that it can maintain a flexibility to an ever evolving geopolitical marketplace.

To a large extent, this is outside of the Group’s control, but the Group’s aim is to be in a position whereby it can react in a fast and an efficient manner to market changes caused by key geopolitical events.

Key customer relationships and competitor activity

The Group operates in a competitive marketplace and has a number of key customer relationships. There is a risk that customers may be lost or move to a competitor.

Part of the Group’s ongoing communication channels with its customers is to understand customer requirements, expectations, key performance indicators and other operational and customer service requirements. The Group works continually with a significant number of customers in designing, prototyping and testing of new products. On that basis, there is a mutual dependency in terms of delivering a high quality product offering.

The trend towards “partnering” with customers in terms of product design and testing is a key strengthening factor in the ongoing relationship with those customers and in increasing the Group’s competitive advantage.

Environmental or health and safety incident

The Group operates in production and processing environments where there is a risk of an environmental or other health and safety incident occurring.

During the year, the Group recruited a Head of Environmental, Health & Safety who reports to Executive Management.

The Group’s acquisition due diligence processes involve a detailed environmental due diligence programme.

The disposal/planned disposal of the majority of the Group’s Environmental Services businesses, means that the Group’s potential exposure in this regard also decreases.

Incident logs are maintained by the Group’s operations and maintained as a key performance indicator.

Notwithstanding the Group’s divestment of the majority of its Environmental Services businesses, Environmental, Health & Safety is at the forefront of the Group’s risk assessment across each of its operations.


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Significant product failure due to a failure in the Group’s quality assurance processes

A failure of a quality assurance system in any of the Group’s manufacturing operations which result in a sub-standard product being released into the marketplace could expose the Group to legal liability and negatively impact the Group’s financial performance and reputation.

The Group has in place quality assurance processes across each of its operations including having the appropriate quality accreditations in place. Monitoring and testing of product quality and specification is an ongoing process in the Group’s operations and forms part of individual plant key performance indicators. Where issues are encountered, swift responsive action is taken to understand the issue and to ensure that customer satisfaction is maintained.

Consistent approach with prior year.

Inability to complete acquisitions, identification of a poor acquisition target and failure to successfully integrate recently acquired businesses

Should the funding not be available to the Group, it would be unable to complete target acquisitions.

Should an inappropriate acquisition be completed, this could negatively impact the Group’s financial performance.

On the basis that acquisitions are completed, there is a risk that these are not successfully integrated into the Group’s existing operations.

Prior to pursuing a potential acquisition, the Group engages with its funders to ensure that funding will be in place.

Prior to any acquisition being made, the Group undertakes detailed due diligence procedures including financial, taxation, commercial, legal and environmental. Formal Board approval is required for all acquisitions and the Board is regularly updated on due diligence projects in progress.

For each significant acquisition made, the Group implements an integration plan, a “100 day” plan so as to ensure the integration process is monitored, measurable and delivered within a reasonable timeframe.

To date, the “100 day” plan mechanism has been successful in respect of IPL, a transformational acquisition for the Group, and Encore.

Maintaining the Group’s strategic growth plan

As the Group continues to grow in relatively new marketplaces for the Group (e.g. North America), there is a risk that the appropriate infrastructure will not be in place to support the expanding business.

The Group has in place experienced management teams across its businesses, in particular, in new market environments.

Three year plans are in place for each division and this includes an assessment of capital expenditure and funding requirements.

Furthermore, there is ongoing communication between Executive and Divisional/Operations management teams to understand local requirements from both a financing and resource perspective.


Directors’ Report(continued)

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Input cost inflation

A number of the Group’s businesses have inputs and outputs which are commodities (e.g. resin). There is a risk that fluctuating raw material costs, fluctuating selling prices, unusual competitor actions and the resultant difficulties in adjusting prices appropriately, could have a negative impact on operating margins and overall financial performance.

The Group maintains ongoing communication with customers and suppliers with regard to planning its production requirements.

The Group aims to maintain a number of suppliers of key materials and equipment so as not to become overly dependent on any one supplier.

The Group also endeavours to maintain flexibility in its relationships with its key Plastics customers whereby material price input changes can be passed through to the customer on an agreed, “no surprises” basis.

The geopolitical uncertainties currently being experienced, including the impact of Brexit, result in the management of this process being more challenging.

Recruitment and retention of key personnel

As the Group continues to evolve and expand into new marketplaces, it becomes of increasing importance that the Group is able to attract and retain high quality management and employees across its operations. If the Group is unable to achieve this, the achievement of the Group’s strategic objectives could become jeopardised.

The Group maintains an ongoing assessment of its succession planning and resource requirements, including consideration by the Nomination Committee. It maintains competitive remuneration incentives by reference to the external market environment.


IT related – Disaster Recovery and Cyber Security

The Group operates across a multi-jurisdictional operational platform. Were there to be a significant disaster recovery issue from an IT perspective or a breach of the Group’s IT security systems from a cyber-crime perspective, this could significantly impact the Group’s operational and financial performance.

The Group has an IT disaster recovery plan in place across its operations and this is monitored by Group IT management, who report to the Group CFO. The Group has cyber security controls in place and these are monitored by Group IT management. The Group circulates awareness updates to employees periodically on cyber security risks.

The Group has experienced an increased level of cyber security fraud attempts during the year. This has led to the requirement for more frequent alerts to employees to remain cognisant and vigilant in this regard and to ensure that the Group’s Internal Control Standards are complied with, in particular, in respect of payments.


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Compliance and regulatory

Compliance with laws and regulations

The Group operates in jurisdictions where there are stringent legal and compliance obligations including statutory, taxation, financial, employment and environmental regulation. Non-compliance could lead to reputational damage to the Group along with a potential significant impact on financial performance.

The Group has experienced management teams across its operations who understand the requirements in this regard. There is also a support mechanism in place from the Group’s central management function. The Group engages with external advisers in relation to matters whereby the technical expertise is not available internally. In addition, the Group’s Risk Management Framework is in place to identify any potential shortfalls in relation to any of these matters.


Financial and reporting

Financial and reporting, including foreign exchange rates

The principal foreign exchange risk to which the consolidated financial statements are exposed to is the risk of adverse movements in reported results from Pound Sterling, Canadian Dollar, US Dollar and Chinese Renminbi when translated into euro, the Group’s reporting currency.

This risk is actively managed by the Group’s Treasury management team. The Group Treasury Policy is Board approved and provides the Treasury management team with a framework which it can operate within. Where appropriate and possible, the Group enters into hedging arrangements to manage these risks.

In particular, the impact of the Brexit decision during the year, had a significant negative impact on the translation of the Group’s Pound Sterling denominated operations. This uncertainty is ongoing and is likely to continue throughout 2017.

Financial risk management

The Group’s operations expose it to different financial risks that include currency risk, credit risk, liquidity risk, interest rate risk and market risk.

These risks are actively managed by the Group’s Treasury management team. The Group Treasury Policy is Board approved and provides the Treasury management team with a framework which it can operate within. The Group utilises appropriate hedging arrangements with commercial banks such as forward currency purchase and sales contracts.

In particular, the impact of the Brexit decision during the year, had a significant negative impact on the translation of the Group’s sterling operations. This uncertainty is ongoing and is likely to continue throughout 2017.

Significant underperformance of any of the Group’s cash generating units

This could give rise to a material impairment of goodwill, intangible assets and property, plant and equipment which would have a negative impact on the Group’s financial performance, net assets and banking covenants.

A difficult risk to mitigate apart from ongoing assessment of the performance of the Group’s cash generating units and appropriate challenge of the financial information by reference to the future/forecasted operating targets.

If impairment is indicated, it is assessed in line with the Group’s accounting policies and the relevant asset written down accordingly.

Directors’ Report(continued)

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Funding and valuation of IPL Put Liability

Ability to obtain appropriate funding

The Group may not be able to achieve its strategic growth objectives were the required capital resources not available to fund the Group’s organic and inorganic growth strategy.

The Group is primarily funded by Committed Bank Facilities, with separate Irish and Canadian banking syndicates. The Irish banking syndicate has provided €92.0 million of committed funding with significant uncommitted funding including an invoice discounting facility of €15.0 million which was entered into in November 2015. The Irish banking committed facilities are due to mature in December 2020. On the acquisition of IPL in July 2015, the Group entered into a credit agreement with a syndicate of Canadian banks. During 2016, prior to the acquisition of Encore, this facility was further renegotiated and increased. The credit agreement provides for committed facilities of CAD$203.4 million (€143.4 million), with CAD$148.4 million (€104.6 million) provided by way of term loan (including a USD$33.5 million term loan) and CAD$55 million (€38.8 million) provided under a revolving facility. This credit agreement expires in July 2020.

During the year, the Group extended its Irish banking facility from an expiry date of January 2019 to December 2020.

Furthermore, it extended its Canadian banking facility from an expiry date of July 2019 to July 2020.

Inability to fund IPL minority shareholding buy-out in July 2021 when the Put Option becomes exercisable

The Group anticipates that it will acquire the 33.33% of IPL that it does not own once the Group’s Put Option becomes exercisable in July 2021. Given the significance of the Put Liability at year end and the growth plans for that business, there is a risk that the Group will not have the ability to fund the acquisition when the Put Option becomes exercisable.

In the event that the funding is not available at the date the Put Option becomes exercisable, IPL could be put up for sale. However, the Group continues to assess its funding requirements on an ongoing basis.

The Put Liability has increased from €32.4 million at the end of 2015 to €72.2 million at the end of 2016.

Shareholder related

The shares are traded on the grey market

The Group may not be able to manage shareholder expectations in terms of share price performance due to a lack of liquidity.

The Group maintains an active Investor Relations calendar including investor and broker engagement.

Accounting recordsThe Directors believe that they have complied with the requirements of Sections 281 to 285 of the Companies Act 2014 with regard to adequate accounting records by employing accounting personnel with appropriate expertise and by providing adequate resources to the finance function. The accounting records of the Company are maintained at Huguenot House, 35 – 38 St. Stephen’s Green, Dublin 2.


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Change of registered officeOn 27 June 2016, the Company changed its registered office to Huguenot House, 35-38 St. Stephen’s Green, Dublin 2.

Post balance sheet eventsThere have been no significant events since year-end affecting the Group which would require disclosure in, or adjustment to, the financial statements.

Political donationsNo political donations were made by the Group during the year (2015: €Nil).

Corporate governanceThe Company presents a corporate governance statement within the Directors’ Statement on Corporate Governance on pages 41 to 45.

Directors’ remunerationThe Report of the Remuneration Committee on Directors’ Remuneration is set out on pages 50 to 54.

Substantial holdings As at 31 December 2016, the following shareholders are interested in 3% or more of the issued share capital of the Company.

Company Name %

IIU Nominees Limited 22.31

Kerry Co-operative Creameries Limited 4.70

Vevan 4.42

Dairygold Co-operative Society Limited 3.14

Lakeland Securities Limited 3.05

As far as the Company is aware, other than as stated above, no other person or company has an interest in 3% or more of the issued share capital of the Company.

Directors’ Compliance StatementThe Directors acknowledge that they are responsible for securing compliance by the Company with its relevant obligations as defined in the Companies Act 2014 (hereinafter called the Relevant Obligations).

The Directors confirm that they have drawn up and adopted a compliance policy statement setting out the Company’s policies that, in the Directors’ opinion, are appropriate to the Company in respect of its compliance with its Relevant Obligations.

The Directors further confirm that the Company has put in place appropriate arrangements or structures that are, in the Directors’ opinion, designed to secure material compliance with its Relevant Obligations and that they have reviewed the effectiveness of these arrangements or structures during the financial period to which this Annual Report relates.

Disclosure of Information to Auditors The Directors in office at the date of this report have each confirmed that:

• As far as he/she is aware, there is no relevant audit information of which the Company’s statutory auditors are unaware; and

• He/she has taken all the steps that he/she ought to have taken as a Director in order to make himself/herself aware of any relevant audit information and to establish that the Company’s statutory auditors are aware of that information.

Share priceThe Company’s shares are traded on a ‘grey market’. The share price at 31 December 2016 was €1.35 (2015: €1.60). The price of the Company’s Ordinary Shares ranged between €1.35 and €1.80 during the year.

AuditorPursuant to Section 383(2) of the Companies Act, 2014 the auditor, KPMG, Chartered Accountants, will continue in office.

Issue of shares and purchase of own sharesAt the Company’s Annual General Meeting held on 21 April 2016, shareholders passed a resolution that the Directors be generally and unconditionally authorised to exercise all the powers of the Company to allot and issue relevant securities, as defined by Section 1021 of the Companies Act 2014 up to an amount equal to the authorised but unissued share capital of the Company.

The authority conferred shall expire at the next Annual General Meeting of the Company after the passing of this resolution and the date which is 15 calendar months after the passing of this resolution, unless previously renewed, varied or revoked by the Company in accordance with the provisions of the Companies Act 2014 save that the Company may make an offer or agreement before the expiry of this authority which would or might require relevant securities to be allotted or issued after this authority has expired and the Directors may allot and issue relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.

Details of the Company’s capital structure can be found in Note 22 to the financial statements on pages 108 to 110. Details of the rights attaching to shares and the deadlines for exercising voting rights are set out in the Directors’ Statement on Corporate Governance on pages 41 to 45. Details of Employee Share Schemes, and the rights attaching to shares held in these schemes, can be found in Note 31 to the financial statements on pages 118 to 122 and the Report of the Remuneration Committee on Directors’ Remuneration on pages 50 to 54.

On behalf of the Board

Denis Cregan Alan WalshDirector Director16 March 2017 16 March 2017

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The Board of One51 plc is firmly committed to business integrity, strong ethical values and professionalism in all of its activities and operations. It is therefore committed to maintaining the highest standards of corporate governance. As an unlisted Company, One51 plc is not required to report on its application of the UK Corporate Governance Code (the UK Code) as issued by the Financial Reporting Council in September 2014. However, the Directors are committed to maintaining high standards and have undertaken to continue to apply appropriate corporate governance arrangements having regard to best practice taking into account the size of the Group and the nature of its activities. This Directors’ Statement on Corporate Governance describes the corporate governance arrangements in place.

Board of DirectorsRoleThe Board is responsible for the overall leadership and control of the Group and for determining the nature and extent of the significant risks it is willing to take in achieving the Group’s strategic objectives. A formal policy in respect of matters reserved to the Board for decision remains in place and includes the approval of:

• Group strategic plans;

• annual budgets;

• financial statements;

• significant capital expenditure items;

• major acquisitions and disposals;

• Executive and Director remuneration;

• changes to capital structure;

• Board appointments; and

• the review of the Group’s corporate governance arrangements and system of internal control.

The roles of Chairman and Chief Executive are separate with a clear division of responsibility between them. Formal documentation in respect of this division of responsibility is in place. The Board oversees and delegates responsibility for the management of the Group through the Chief Executive to executive management. The Board also delegates some of its responsibilities to Board Committees, details of which are set out below.

Individual Directors may seek independent professional advice at the Company’s expense, where they determine it necessary to discharge their responsibilities as Directors. The Group has an insurance policy in place which indemnifies the Directors in respect of legal action taken against them.


There is a Board approved policy in place in respect of Executive Directors and Senior Management occupying any position in a non-associated and unrelated company to the One51 Group. Neither of the Executive Directors is a Non-Executive Director or Chairman of a listed company.

MembershipAt 31 December 2016, the Board comprised of eight Directors; two Executive and six Non-Executive (including the Chairman). Mr. Pat Gilroy and Mr. Dalton Philips were co-opted as Non-Executive Directors on 1 September 2016.

The biographical details of the current Directors are set out on pages 32 and 33.

At least half the Board, excluding the Chairman, consists of independent Non-Executive Directors. All of the Directors bring independent judgement to bear on issues of strategy, performance, resources, key appointments and standards.

Each of the Non-Executive Directors who served during the year was deemed to be independent except for Mr. Gilroy who was deemed to be non-independent as he represents a significant shareholder. A policy remains in place which was approved by the Board in respect of the assessment of Non-Executive Directors’ independence. This policy is based on the principles relating to independence set out in the UK Code including:

If the Director:

1. has been an employee of the Company or Group within the last five years;

2. has, or has had within the last three years, a material business relationship with the Company either directly, or as a partner, shareholder, Director or senior employee of a body that has such a relationship with the Company;

3. has received or receives additional remuneration from the Company apart from a Director’s fee, participates in the Company’s share option or a performance-related pay scheme, or is a member of the Company’s pension scheme;

4. has close family ties with any of the Company’s advisers, Directors or senior employees;

5. holds cross-directorships or has significant links with other Directors through involvement in other companies or bodies;

6. represents a significant shareholder; or

7. has served on the Board for more than nine years from the date of their first election.


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ChairmanMr. Denis Cregan has held the position of Chairman of the Company since 31 December 2012. The Chairman is responsible for the efficient and effective working of the Board. Mr. Cregan is responsible for ensuring that the Board considers the key strategic issues facing the Group and that the Directors receive accurate, timely, relevant and clear information.

Senior Independent DirectorMs. Rose Hynes has held the position of Senior Independent Director of the Company since 31 December 2012. Ms. Hynes is available to shareholders if they have concerns that contact through the Chairman, Chief Executive or the other Executive Director has failed to resolve and is available to meet shareholders on request. Ms. Hynes is also available to act as a sounding board and intermediary for the Chairman and the other Directors, if necessary.

Company SecretaryThe appointment and removal of the Company Secretary is a matter for the Board. All Directors have access to the Company Secretary who is responsible to the Board for ensuring that Board procedures are complied with and ensuring good governance and compliance by the Company of its legal and regulatory requirements. The Company Secretary is Susan Holburn (FCIS, BA) who has held the position since the incorporation of the Company in 2004.

Terms of appointmentAll Non-Executive Directors were issued with formal letters of appointment setting out the terms and conditions on which they are appointed to the Board and to each Committee of the Board as appropriate. The standard terms of the letter of appointment for Non-Executive Directors, which states that they are generally expected to serve two terms of three years, are available for inspection at the Company’s registered office and at the Annual General Meeting (“AGM”). A Non-Executive Director’s term of office is subject to his/her re-election by shareholders at least every three years and the letter of appointment does not provide for any compensation for loss of office. Letters of appointment set out the time commitment of the role. Other time commitments of Non-Executive Directors are disclosed to the Board prior to appointment.

Retirement and re-election Under the Company’s Articles of Association, at least one-third of Directors must retire at each AGM and all Directors must submit themselves for re-election at least every three years. Directors appointed by the Board must submit themselves for election at the first AGM

following their appointment. Mr. Alan Walsh and Mr. Denis Cregan retire and offer themselves for re-election at the forthcoming AGM. Mr. Pat Gilroy and Mr. Dalton Philips who were co-opted to the Board on 1 September 2016 retire and offer themselves for re-election at the forthcoming AGM. The Company can confirm that each of the Directors seeking re-election continue to perform effectively and demonstrate commitment to the role. The Board recommends the re-election of the Directors who are standing for re-election.

Induction and developmentAll new Directors, on appointment, receive briefing material in addition to briefings from management in relation to Group operations, management and structures. Ongoing briefings for Directors are also held on a regular basis with management and the opportunity is afforded to Directors to visit Group operations. An assessment of the Board’s requirements for additional training and/or professional development was conducted in respect of the year to 31 December 2016 in line with the internal Board performance evaluation process. In addition, the Chairman is available to Directors to review their training and development needs on an ongoing basis.

MeetingsMeetings of the Board normally take place on a monthly basis but may take place at other times as the Board considers appropriate. Members of the Board, and in particular the Audit Committee, usually make at least one visit per year to at least one of the operating subsidiaries. In addition, the Board continually reviews the Group’s strategy on an ongoing basis, while also dedicating two days per year for a full formal review. During the year under review, there were 14 scheduled meetings of the Board. Details of Directors’ attendance at these scheduled meetings are set out in the table on page 45. In addition, at least one meeting per year provides an opportunity for Non-Executive Directors and the Chairman to meet without the Executive Directors present.

The Chairman sets the agenda for each meeting in consultation with the Chief Executive and Company Secretary. The agenda and Board papers, which provide the Directors with relevant information to enable them fully consider the agenda items in advance, are circulated via BoardPad prior to each meeting. Directors are encouraged to participate in debate and engage in constructive challenge.

Directors’ Statement on Corporate Governance(continued)

42

Activities during the yearThe activities of the Board and its Committees during the year are outlined in the sections of this report to which they relate.

Performance evaluationAn external performance evaluation of the Board, its Committees, its individual Directors and the Chairman was carried out by the Institute of Directors in December 2015. An internal performance evaluation of the Board and its Committees, was carried out in respect of the year to 31 December 2016. The evaluations of the Board and its Committees were formally documented.

RemunerationDetails of remuneration paid to Directors (Executive and Non-Executive) are set out in the Report of the Remuneration Committee on pages 50 to 54.

Share ownership and dealingDetails of Directors’ shareholdings are set out on pages 52 to 54.

A policy remains in place in respect of dealing in Company shares for Directors, senior managers and those employees who may, from time to time, be considered to have insider information. This policy sets out the clearance required prior to dealing.

CommitteesThe Board has established three permanent Committees to assist in the execution of its responsibilities. These are the Audit Committee, the Nomination Committee and the Remuneration Committee. Ad-hoc committees are formed from time to time to deal with specific matters. Each of the permanent Board Committees has terms of reference under which authority is delegated to them by the Board. These terms of reference are available on the Company’s website and on request from the Company Secretary. The Chairman of each Committee regularly updates the Board as to its activities. The Committees have access to sufficient resources in order to carry out their duties, including access to the company secretariat for assistance as required.

The membership of each Committee as at 31 December 2016 is set out on page 6. Attendance at meetings held is set out in the table on page 45. The Chairman of each Committee attends the Annual General Meeting and is available to answer questions from shareholders.

Internal Control and Risk Management The Board of Directors has overall responsibility for the system of internal control, for monitoring its effectiveness and for confirming that there is a process

for identifying, evaluating and managing the significant risks to the achievement of the Group’s strategic objectives. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable, but not absolute, assurance against material misstatement or loss.

The consolidated financial statements are prepared subject to the oversight and control of the Chief Financial Officer, ensuring correct data is captured from Group locations and all required information for disclosure in the consolidated financial statements is provided. A control framework has been put in place around the recording of appropriate eliminations and other adjustments. The consolidated financial statements are reviewed by the Audit Committee and approved by the Board of Directors.

The Board confirms that the Group’s ongoing process for identifying, evaluating and managing its significant risks and uncertainties has been in place for the year under review and up to the date of approval of the financial statements.

Group management has responsibility for major strategic development and financing decisions. Responsibility for operational issues is devolved, subject to limits of authority, to operating business management. Management at all levels is responsible for internal controls over the business functions that have been delegated. This embedding of the system of internal control throughout the Group’s operations ensures that the organisation is capable of responding quickly to evolving business risks and that significant internal controls issues, should they arise, are reported promptly to appropriate levels of management.

The key risk management and internal control procedures, which are supported by detailed controls and processes, include:

• a clearly defined organisational structure with clearly defined lines of authority and responsibility;

• skilled and experienced Group, divisional, and business unit management;

• a comprehensive system of financial reporting involving budgeting, monthly reporting and variance analysis to the Board;

• a comprehensive system of management reporting encompassing trading activities, operational issues, financial performance, working capital, cash flow and asset management;

• the operation of Board approved internal control, treasury and risk management policies;


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• Group Internal Audit and Group Risk functions; and

• a formally constituted Audit Committee which approves audit plans and deals with significant control issues raised by the Group Internal Audit and Risk functions or external audit.

During the year, the Board and the Audit Committee received, on a regular basis, reports from management on the key risks to the business and the steps being taken to manage such risks and considered whether the significant risks faced by the Group were being identified, evaluated and appropriately managed having regard to the balance of risk, cost and opportunity.

During the year, the Audit Committee met with the Group Internal Auditor on a regular basis to review reports of the activities conducted by this function and any significant control issues identified in these reports.

The Board has reviewed the results of the Audit Committee’s annual assessment of the effectiveness of the Group’s system of risk management and internal controls. Where areas for improvement have been identified the necessary actions in respect of the relevant control procedures have been or are being taken.

The Directors, through the use of appropriate procedures, systems and the employment of competent persons, have ensured that measures are in place to secure compliance with the Company’s obligation to keep adequate accounting records. The accounting records are maintained at the registered office of the Company.

Communications with shareholdersThe Group attaches considerable importance to shareholder communications and has an established investor relations programme whereby periodic updates are circulated to all shareholders via the Company’s website. In addition, the Chairman and the Senior Independent Director are available to meet with shareholders. The Chairman of the Board and of each Committees attend the Company’s Annual General Meeting and are available to answer questions from shareholders. The Group’s website www.one51.com provides the full text of the annual report and financial statements and other releases. Presentations given to shareholders are also made available on the website.

During 2016, Executive Directors met with significant shareholders on a number of occasions and briefed the Board on the views, and any concerns, raised at these meetings.

General MeetingsThe Company’s AGM affords shareholders the opportunity to question the Chairman and the Board. The Notice of AGM, the Form of Proxy and the annual report are issued to shareholders at least 21 days before the meeting. At the meeting, resolutions are voted on by a show of hands of those shareholders attending, in person or by proxy. After each resolution has been dealt with, details are given of the level of proxy votes cast on each resolution and the number of votes for, against and withheld. If validly requested, resolutions can be voted by way of a poll whereby the votes of shareholders present and voting at the meeting are added to the proxy votes received in advance of the meeting and the total number of votes for, against and withheld for each resolution are announced.

All other general meetings are called Extraordinary General Meetings (EGMs). An EGM called for the passing of a special resolution must be called by providing at least 21 days notice.

A quorum for a general meeting of the Company is constituted by three or more members present in person or by proxy and entitled to vote.

The passing of resolutions at a meeting of the Company, other than special resolutions, requires a simple majority. To be passed, a special resolution requires a majority of at least 75% of the votes cast.

Shareholders have the right to attend, speak, ask questions and vote at general meetings. In accordance with Irish Company law, the Company specifies record dates for general meetings, by which date shareholders must be registered in the Register of Members of the Company to be entitled to attend. Record dates are specified in the Notice of AGM. Shareholders may exercise their right to vote by attending the meeting or by appointing a proxy in writing. The requirements for the receipt of valid proxy forms are set out in the Notice of AGM. A shareholder, or a group of shareholders, holding at least one tenth of the issued paid up share capital of the Company has the right to request a general meeting.

At the AGM, presentations are given by the Chief Executive and the Chief Financial Officer in relation to the performance of the Group throughout the year and the plans for the year ahead.

Memorandum and Articles of AssociationA copy of the Memorandum and Articles of Association of the Company may be inspected at the registered office of the Company.

Directors’ Statement on Corporate Governance(continued)

44

Going concern The Group has considerable financial resources and operates in established business sectors across different geographical areas and industries. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully despite the current challenging economic environment.

After making enquiries, the Directors have formed a judgement, at the time of approving the financial statements, that the Company and the Group as a whole have adequate resources to continue in operational existence for the foreseeable future. In forming their view, the Directors have taken into consideration the future financial requirements of the Group and Company and the existing Irish bank facilities which mature in December 2020. In addition, the “ring-fenced” IPL Canadian bank facilities mature in July 2020. For this reason, they continue to adopt the going concern basis in preparing the financial statements. The Directors’ responsibility for preparing the financial statements is explained on page 56 and the reporting responsibilities of the auditor are set out in their report on pages 57 and 58.

Attendance at Meetings Attendance at scheduled Board meetings and Board Committee meetings during the year was as follows:

Board Audit Remuneration Nomination

A B A B A B A B

D Cregan 14 14 - - - - 3 3

P Dalton 14 14 - - - - - -

P Gilroy¹ 4 4 - - - - - -

R Hynes 14 14 5 5 - - - -

G Meagher 14 14 5 5 7 7 - -

H McCutcheon 14 14 5 5 7 7 - -

D Philips² 4 4 - - - - - -

A Walsh 14 14 - - - - 3 3

Column A – indicates the number of meetings held during the period the Director was a member of the Board and/or Committee

Column B – indicates the number of meetings attended during the period the Director was a member of the Board and/or Committee

Changes in the composition of Board Committees during the year were as follows:

1. Mr. Gilroy was appointed to the Board on 1 September 2016.

2. Mr. Philips was appointed to the Board on 1 September 2016.


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The Nomination Committee is comprised of Mr. Denis Cregan and Mr. Alan Walsh. The Committee has defined terms of reference under which authority is delegated to it by the Board. These terms are available on the Company’s website and on request from the Company Secretary. The Committee regularly updates the Board as to its activities. It meets a minimum of twice a year and during the year under review met on three occasions. Attendance at meetings held is set out in the table on page 45.

The Committee’s responsibilities include:

• reviewing the structure, size and composition (including the skills, knowledge and experience) required of the Board and making recommendations regarding any changes in order to ensure that the composition of the Board and its Committees is appropriate to the Group’s needs;

• overseeing succession planning for the Board and senior management;

• establishing processes for the identification of suitable candidates for appointment to the Board; and

• making recommendations to the Board on membership of Board Committees.


During 2016, the Committee:

• considered the composition (including the skills, knowledge and experience) of the Board and sub-committees of the Board;

• considered and recommended to the Board the co-option of Mr. Dalton Philips and Mr. Pat Gilroy to the Board of One51;

• considered and issued a formal letter of appointment to each of Mr. Dalton Philips and Mr. Pat Gilroy in respect of their appointment to the Board;

• considered the re-election of Directors in respect of those Directors who were due to retire by rotation at the Annual General Meeting during the year;

• considered and recommended approval by the Board of a policy in respect of Non-Executive Directorships; and

• considered succession planning across the Group.

46

Composition and terms of referenceThe Audit Committee is comprised of independent Non-Executive Directors, Mr. Geoff Meagher (Chair), Ms. Rose Hynes and Mr. Hugh McCutcheon. The Committee has defined terms of reference under which authority is delegated to it by the Board. There were a number of amendments made to the Committee’s terms of reference at its meeting on 9 March 2016, which were formally approved by the Board at its meeting on 20 July 2016. The terms of reference are available on the Company’s website and on request from the Company Secretary. The Committee Chairman regularly updates the Board as to its activities. The Audit Committee meets a minimum of four times a year and, during the year under review, met on five occasions. Attendance at meetings held is set out in the table on page 45.

The Committee has determined that Mr. Geoff Meagher is the Audit Committee financial expert. The Chief Financial Officer, the Group Financial Controller and the Group Head of Internal Audit attend Committee meetings as appropriate, while the external auditor attends as required and has direct access to the Committee Chairman.

The Committee’s responsibilities include:

• monitoring the integrity of the financial statements of the Group and any formal announcements relating to financial performance including reviewing any significant financial reporting issues and judgements contained therein before submission to the Board and reviewing and monitoring of all material information presented within the financial statements, such as business review/financial review and the corporate governance statement (insofar as it relates to the audit and risk management) prior to approval by the Board;

• monitoring and reviewing the adequacy and effectiveness of the Group’s internal financial controls, internal controls and risk management systems;

• monitoring and reviewing the effectiveness of the Group’s internal audit function in the context of the Group’s overall risk management system;

• approving the appointment and removal of the head of the internal audit function;

• making recommendations to the Board in relation to the appointment and removal of the Group’s external auditor;

• evaluating the performance of the external auditor including their independence and objectivity;

• reviewing the annual internal and external audit plans;

• ensuring compliance with the Group’s policy on the provision of non-audit services by the external auditor;


• reviewing arrangements by which staff of the Group and contractors may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters and periodically reviewing the methods by which “whistleblowing” can take place;

• advising the Board on the current risk exposures of the Group and future risk strategy;

• keeping under review the Group’s overall risk assessment processes that inform the Board’s decision making, ensuring both qualitative and quantitative metrics are used;

• recommending to the Board the appointment and/or removal of the Group Head of Risk; and

• reviewing and monitoring management’s responsiveness to the findings and recommendations of the Group Head of Risk.

Committee meetings in 2016As noted above, the Audit Committee schedules four routine meetings annually. There is a formal agenda for all meetings, which follows the financial reporting cycle of the Group. Meetings are attended as appropriate by the Group Chief Executive, the Group Chief Financial Officer, the Group Financial Controller, the Head of the Internal Audit and risk functions and representatives of the external auditor. The main items addressed at the five audit committee meetings held during 2016 were as follows:

9 March meeting

• Review with the external auditor the status of the 2015 financial statements audit.

• Update from the external auditor as to any significant issues arising at individual operating sites during the external audit process in respect of the 2015 financial statements.

• Consideration of the items included in the external auditor’s summary of adjusted and unadjusted audit difference schedule and the potential impact of these on the draft financial statements.

• Re-assessment of the independence of the external auditor was made and no issues noted.

• During this meeting, the Committee met with the external auditor with no members of the management team present.

• Consideration of key areas of judgement raised by the external auditor in their Audit Plan including acquisition accounting in respect of IPL Inc and provisional fair values attributed to the net assets acquired, the basis of accounting in respect of the IPL Inc Put Liability and the fair value thereof,


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the change in accounting policy with regard to the Group’s shareholding in Altas Investments plc and the resulting restatement of the 2014 financial statements, inventory valuation, asset impairment considerations, accounting for available-for-sale financial assets, judgemental provisions and accruals, presentation of exceptional and non-recurring items of income and expense, and accounting for discontinued operations.

• Review of the draft Annual Report and financial statements for 2015, including the relevant notes and disclosures.

• Review and consideration of the Group Risk Presentation. The One51 Risk Management Framework, as outlined in the Group Risk Presentation, was reviewed.

• Review of the 2016 Internal Audit Plan with the Group Head of Internal Audit.

18 March meeting

• Consideration of the items included in the external auditor’s summary of adjusted and unadjusted audit difference schedule and the potential impact of these on the draft financial statements.

• Review of the draft Annual Report and financial statements for 2015, including the relevant notes and disclosures.

• Review of the draft representation letter from the external auditor including specific representations requested.

18 May meeting

• Review of presentation in respect of the Half Year Review Process.

• Review of Internal Audit Reports with the Group Head of Internal Audit and updates to the 2016 Internal Audit Plan.

• Group Risk Presentation with Group Financial Controller in relation to the risk assessments currently ongoing.

• Consideration of the Group’s obligations with regard to Compliance Statement matters, disclosure of which will be required with respect to One Fifty One plc (entity) in the 2016 Annual Report.

• Review of updates made to the Group’s Treasury Policy.

24 August meeting

• Review of the draft Interim Financial Information documentation in respect of the six month period ended 30 June 2016.

• Review of the external auditor’s interim review report for the six month period ended 30 June 2016.

• Recommendation of the draft interim financial statements to the Board.

• Review of internal audit reports for recent site visits undertaken by the Group Head of Internal Audit and discussion of key findings.

• Group Risk Presentation with Group Financial Controller in relation to the risk assessments currently ongoing.

24 November meeting

• Review of the Audit Committee’s Terms of Reference prior to full Board approval.

• An assessment questionnaire in respect of the performance appraisal of the Audit Committee in respect of the year ended 31 December 2016 had been circulated to each member in advance of the meeting. Collation of findings and assessment in respect of this process will be considered at the March 2017 meeting.

• Review of internal audit reports for recent site visits and meeting with the Internal Auditor to discuss key findings.

• Receipt and approval of the external auditor’s Audit Plan for the year ended 31 December 2016. Consideration of key areas of judgement raised by the external auditor in their Audit Plan including acquisition accounting in respect of Encore, H&T and Bale and provisional fair values attributed to the net assets acquired, the fair value assessment and respect of the IPL Inc. Put Liability accounting in respect of disposals/divestments, inventory valuation, judgemental provisions and accruals, presentation of exceptional and non-recurring items of income and expense, and accounting for discontinued operations.

• Review of the proposed external audit fees for 2016.

• Consideration of the independence and objectivity of the external auditor, including assessment of the impact, in this regard, of any non-audit services provided.

• Review of the Group Risk Presentation and Group Risk Registers with the Group Financial Controller.

Report of the Audit Committee(continued)

48

Independence of external auditorAs part of its annual review of the independence of the external auditor, the Audit Committee seeks confirmation from the external auditor that they are, in their professional judgement, independent of One51 plc. The Group has a policy in place governing the conduct of non-audit work by the external auditor.

Under this policy, the auditor is prohibited from performing services where the auditor would participate in activities that would normally be undertaken by management; be remunerated through a “success fee” structure; or would act in an advocacy role for the Group.

The engagement of the external auditor in non-audit work must be pre-approved in certain circumstances by the Audit Committee, in particular when the level of fees involved could be considered to impact on external auditor independence. There is a policy in place in respect of Auditor Independence Services to be provided by the external auditor which was approved by the Audit Committee.

The amounts paid to the external auditor during the year, for audit and non-audit services, are disclosed on page 83. The level of tax advisory and other non-audit services fees is significant, due primarily to the costs incurred by the Group in relation to the provision by KPMG of taxation advisory and due diligence services in connection with the deferred IPO process, the divestment projects undertaken and certain acquisition/aborted acquisition projects. The directors believed that, given KPMG’s extensive knowledge of the Group’s history and operations, KPMG was best placed to provide these services. However, the Group has increasingly engaged a number of other professional services firms (other than KPMG) to undertake non-audit services, as and when required.

Four key principles underpin the provision of non-audit services by the external auditor, namely that the auditor shall not:

• audit its own firm’s work;

• make management decisions for the Group;

• have a mutuality of financial interest with the Group; or

• be put in the role of advocate for the Group.

The Committee also reviewed the Group’s practices in respect of the hiring of former employees of the external auditor in order to assess whether such appointments might affect, or appear to affect, the external auditor’s independence. The Committee is advised in advance of any such proposed appointments.

The Audit Committee does, from time to time, consider whether it would be appropriate to put the audit out to tender. The Audit Committee is conscious of the recent significant changes in the Group and is satisfied that the existing external auditor is effective in the conduct of the audit.


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Composition and terms of referenceThe Remuneration Committee consists solely of Non-Executive Directors, Mr. Hugh McCutcheon (Chair) and Mr. Geoff Meagher. The Committee has defined terms of reference under which authority is delegated to it by the Board. These terms of reference include, amongst other matters, the following:

• determine and agree with the Board the framework or broad policy for the remuneration of the Company’s Chairman, Chief Executive, the Executive Directors, the Company Secretary and such other members of the Executive Management as it is designated to consider;

• in determining such policy, take into account all factors which it deems necessary including relevant legal and regulatory requirements. The objective of such policy shall be to ensure that members of the Executive Management of the Company are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Company;

• when setting remuneration policy for Directors, review and have regard to the remuneration trends across the Company;

• review the ongoing appropriateness and relevance of the remuneration policy; and

• within the terms of the agreed policy and in consultation with the Chairman and/or Chief Executive, as appropriate, determine the total individual remuneration package of the Chairman, each Executive Director, Company Secretary and other designated senior executives including bonuses, incentive payments and share options or other share awards.

The Remuneration Committee, as it considers appropriate, obtains external advice from benefit and compensation consultants and other independent firms on current market trends with regard to remuneration policy and philosophy, market remuneration data, as well as incentive arrangements.

Remuneration policy The Remuneration Committee is committed to ensuring that the Group has in place a remuneration structure that incentivises and retains highly skilled and motivated individuals, while at the same time aligning individual rewards with key corporate metrics which drive shareholder value creation.

The main elements of the remuneration package for senior management are basic salary and benefits, performance related annual bonus, long term incentive


arrangements (i.e. share schemes) and pension benefits.

Bonus awards are made under the One51 Short Term Incentive Programme, or similar short term incentive arrangements. Bonuses are paid in respect of the attainment of targets agreed with employees for 2016.

PensionsDuring the year, pension contributions made to a Defined Contribution Scheme on behalf of Executive Directors were made in respect of Messrs. Walsh and Dalton. No pension contributions were made in respect of Non-Executive Directors during 2016.

During the year, the Remuneration Committee approved the payment of cash in lieu of employer pension contributions to Mr. Dalton’s defined contribution pension scheme. This arrangement became effective from 1 July 2016 and accordingly, €18,000 of Mr. Dalton’s annual pension entitlement was paid by way of taxable non-pensionable cash allowance in lieu of pension benefits forgone.

Members of senior management accrue benefits under defined contribution schemes, as applicable. Payments in respect of pensions are calculated on basic salary only and no incentive or benefit elements are included.

Share SchemesThe Group currently has two long term equity-settled share schemes that are active. The purpose of the Group Share Schemes is to incentivise executives to deliver shareholder value and the achievement of financial targets. Details of each of the schemes are outlined in note 31 to the financial statements.

The active schemes are:

The One Fifty One plc 2014 Share Option SchemeDetails of the interests of the Directors and Company Secretary in share options granted under The One Fifty One plc 2014 Share Option Scheme are set out on page 52. The estimated cost of the vesting of the awards is included in the financial statements over the vesting periods which range from October 2017 to July 2019. There are 7,552,250 options outstanding under this scheme at the year end (1,477,250 of which relate to grants under the scheme in July 2016).

One51 Group Share Option Scheme 2006Details of the interests of the Directors and Company Secretary in share options granted under the One51 Group Share Option Scheme 2006 are set out on page 52. The cost of the vesting of the original awards was included in the financial statements for the year ended

50

31 December 2007. In the 2012 and 2013 financial years, further options were granted under this scheme with the cost of these awards included in the financial statements over the vesting periods, 2012 and 2013. There are 3,711,120 options outstanding under this scheme at the year end.

Other SchemesThe Group operates a short term incentive plan (“STIP”) and other incentive arrangements which award cash bonuses on the attainment of certain financial and other pre-agreed targets. The Group also operates a long term cash settled bonus scheme which provides for cash awards to certain employees on the satisfaction of both a share price performance condition and an earnings per share performance condition over a three year period from the date of the awards. The estimated cost of the likely vesting of the awards is included in the financial statements for the year ended 31 December 2016.

Non-Executive Directors’ remunerationThe remuneration of the Non-Executive Directors is determined by the Board, in the absence of the relevant Non-Executive Director. The remuneration of the Chairman is determined by the Remuneration Committee and the Board of One51, in the absence of the chairman. The fees paid to Non-Executive Directors are set at a level which aims to attract individuals with the necessary experience and ability to make a significant contribution to the Group.

Service contractsThe Company has two Executive Directors, Messrs. Walsh and Dalton at 31 December 2016. The letters of employment for Mr. Walsh and Mr. Dalton contain neither a notice period in excess of 12 months nor provision for compensation on termination of greater than 12 months basic salary.

Directors’ remuneration and interest in share capitalDetails of the overall Directors’ remuneration charged to the Income Statement are shown in note 36 on page 133. Individual Director remuneration and pension benefits for the year ended 31 December 2016 are set out below.

Remuneration – Executive Directors

Executive Director Basic salary Bonus(1)

Benefits in kind(2)(3)

Pension contributions(3) Total 2016 Total 2015

€ € € € € €

Alan Walsh 395,000 268,600 42,502 71,100 777,202 863,632

Pat Dalton 300,000 159,000 48,400 18,000 525,400 635,834

Total 695,000 427,600 90,902 89,100 1,302,602 1,499,466

Notes:

1. The Executive Directors’ annual bonuses are recommended by the Remuneration Committee and approved by the Board, with the creation of shareholder value and realising the Group’s strategic vision being the primary aims when setting performance targets.

2. The bonuses are based on both financial and personal objectives. Actual EBITDA (as defined in note 3 to the financial statements) versus budget is the key financial benchmark upon which bonuses are calculated.

3. The BIK amounts represent car allowances and health insurance paid on behalf of Messrs. Walsh and Dalton.

4. For the reason outlined on page 50, €18,000 of Mr. Dalton’s annual pension entitlement was paid by way of taxable non-pensionable cash allowance in lieu of pension benefits foregone.

5. During the year, Mr. Walsh served as a Director of Altas Investments plc. The fee that he received in fulfillment of his duties €32,500 (2015: €55,000) was paid to the One51 Group.

6. During the year, Mr. Walsh served as a director of Pioneer Green Energy LLC. The fee earned in fulfillment of his duties €17,172 (2015: €6,341) was paid to the One51 Group.

7. During the year, amounts of €134,822 and €95,328 were charged to the Income Statement for equity settled share based payment schemes, for Messrs. Walsh and Dalton respectively (2015: €91,417 and €68,937 respectively). This charge to the Income Statement represents the fair value of each option granted, spread over the vesting period of the awards. Details of share options granted to Executive Directors during the year are set out on page 52.


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Remuneration – Non-Executive Directors

Non-Executive Director Basic Fees Other Fees (1) Total 2016 Total 2015

€ € € €

Denis Cregan 41,000 42,000 83,000 83,000

Pat Gilroy(2) 13,667 - 13,667 -

Rose Hynes 41,000 13,000 54,000 54,000

Hugh McCutcheon 41,000 11,000 52,000 48,947

Geoff Meagher 41,000 21,000 62,000 62,000

Dalton Philips(2) 13,667 - 13,667 -

Total 191,334 87,000 278,334 247,947

Notes:

1. Other fees are additional fees paid to the Chairman of the Company, Senior Independent Director and the Chair of the Sub-Committees of the Board for these activities.

2. Messrs. Gilroy and Philips were co-opted to the Board on 1 September 2016.

Share Options Details as at 31 December 2016 of the Directors’ and Company Secretary’s holdings of options to subscribe for shares under the One51 Group Share Option Scheme 2006 and The One Fifty One plc 2014 Share Option Scheme are set out in the table below.

No. of options at 31 December

2015

No. of options granted during

the year

No. of options exercised during

the year

No. of options at 31 December

2016 Exercise price € Exercise dates

Executive Directors

Alan Walsh 750,000 - - 750,000 0.20 2013 – 2020

1,525,000 - - 1,525,000 0.90 2017 – 2021

- 705,500 - 705,500 1.68 2019 – 2023

Pat Dalton 625,000 - - 625,000 0.20 2013 – 2020

1,150,000 - - 1,150,000 0.90 2017 – 2021

- 428,750 - 428,750 1.68 2019 – 2023

Company Secretary

Susan Holburn 258,970 - - 258,970 0.20 2013 – 2020

175,000 - - 175,000 0.90 2017 – 2021

- 118,000 - 118,000 1.68 2019 – 2023

The market price of shares in One51 plc was €1.35 at 31 December 2016 and the range during the year was €1.35 to €1.80. The share price on 16 March 2017 was €1.65.

2012 grants under the One51 Group Share Option Scheme 2006In 2012, the Group granted the Executive Directors and the Company Secretary options over Ordinary Shares in One Fifty One plc under the One51 Group Share Option Scheme 2006 which may be exercisable upon the attainment of specified share price targets. The term of expiry of these options is seven years from date of grant. The share price growth target was attained in 2013 and consequently the options are exercisable.

2014 grants under The One Fifty One plc 2014 Share Option SchemeIn 2014, the Group granted the Executive Directors and the Company Secretary options over Ordinary Shares in One Fifty One plc under The One Fifty One plc 2014 Share Option Scheme which may be exercisable upon the attainment of specified performance targets and service criteria. Regarding specified performance targets, the options granted in 2014 are exercisable on the satisfaction of both a share price performance condition and an earnings per share (“EPS”) performance condition.

Report of the Remuneration Committee on Directors’ Remuneration(continued)

52

Up to 50% of the shares subject to an option shall vest according to the share price Performance Condition. The extent to which the share price Performance Condition is satisfied shall be determined by reference to the cumulative compound growth in the price of a share over the Performance Period in accordance with the following table:

Cumulative compound share price growth Proportion of the total option award vesting (subject to satisfaction of the minimum Vesting target under the share price growth Condition)

Below 7.5 percentage points 0%

7.5 percentage points 25%

Between 7.5 and 11.25 percentage points 25% - 37.5% pro rata

Between 11.25 and 15 percentage points 37.5% - 50% pro rata

15 percentage points or more 50%

The growth in a share’s price shall be calculated by reference to the average price of a share over the 30 day period following the announcement date prior to vesting against the price of €0.90 per share.

Up to 50% of the shares subject to an option shall vest according to the EPS Performance Condition. The extent to which the EPS Performance Condition is satisfied shall be determined by reference to the cumulative compound growth in the Company’s EPS during the Performance Period in accordance with the following table:

Company’s cumulative compound EPS growthProportion of the total option award vesting (subject to satisfaction of the minimum Vesting target under the EPS Performance Condition)

Below 5 percentage points 0%

5 percentage points 25%

Between 5 and 7.5 percentage points 25% - 37.5% pro rata



The growth in the Company’s EPS shall be calculated by reference to the EPS of the accounting period immediately preceding the start of the Performance Period and the EPS of the three accounting periods of the Performance Period.

2016 grants under The One Fifty One plc 2014 Share Option SchemeIn 2016, the Group granted the Executive Directors and the Company Secretary options over Ordinary Shares in One Fifty One plc under The One Fifty One plc 2014 Share Option Scheme which may be exercisable upon the attainment of specified performance targets and service criteria. Regarding specified performance targets, the options granted in 2016 are exercisable on the satisfaction of both a Free Cash Flow Ratio (“FCFR”) performance condition and an EPS performance condition. FCFR in this context means Free Cash Flow before Growth Capital Expenditure as a percentage of EBITDA. Free Cash Flow before Growth Capital Expenditure means EBITDA adjusted to take account of interest, tax, maintenance capital expenditure, working capital cash-flows and dividends received.

Up to 50% of the shares subject to an option shall vest according to the FCFR Performance Condition. The extent to which the FCFR Performance Condition is satisfied shall be determined by reference to the Group’s FCFR over a three year Performance Period starting on the first day of the Accounting Period (1 January) in which the award date occurs, determined in accordance with the table below:

Average Annual FCFRProportion of the total option award vesting (subject to satisfaction of the minimum Vesting target under the FCFR Performance Condition)

Below 40% 0%

40% 25%

Between 40% and 75% 25% - 50% pro rata

75% and above 50%


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Below 5 percentage points 0%

5 percentage points 25%

Between 5 and 7.5 percentage points 25% - 37.5% pro rata




Other information relevant to share option schemesOptions will not vest unless the minimum vesting target is met under each condition. Options will normally vest no earlier than the third anniversary of the grant date. The options must be exercised within seven years of the grant date.

The fair value of each option granted is charged to the Income Statement over the vesting period of the award. Further details regarding the One51 Group Share Option Scheme 2006 and The One Fifty One plc 2014 Share Option Scheme are outlined in note 31.

Interests in Ordinary Shares The interests of the Directors and Company Secretary in office at 31 December 2016 in the ordinary share capital of One Fifty One plc, together with their interests at 31 December 2015 are as follows:

Name Type of Stock Held

As at31 December

2016

As at 31 December

2015

Directors

Alan Walsh Ordinary Shares of €0.01 each 425,032 425,032

Pat Dalton Ordinary Shares of €0.01 each 111,112 111,112

Denis Cregan Ordinary Shares of €0.01 each 241,112 241,112

Rose Hynes Ordinary Shares of €0.01 each 7,500 7,500

Hugh McCutcheon Ordinary Shares of €0.01 each 170,000 111,111

Secretary

Susan Holburn Ordinary Shares of €0.01 each 71,031 71,031

Apart from the interests disclosed above, the Directors and the Company Secretary had no other interests in the share capital of the Company or any other Group undertaking at 31 December 2016.

The Company’s Register of Directors’ Interests (which is open to inspection) contains full details of Directors’ shareholdings and share options.

No other transactions occurred impacting the disclosures above between 31 December 2016 and the date of signing the annual report.

Report of the Remuneration Committee on Directors’ Remuneration(continued)

54

56

57

59

60

61

62

64

65

135

136

137

138

Financial StatementsStatement of Directors’ Responsibilities in respect of the Directors’ Report and the Financial Statements

Independent Auditor’s Report

Group Income Statement

Group Statement of Other Comprehensive Income

Consolidated Statement of Financial Position

Group Statement of Changes in Equity

Consolidated Statement of Cash Flows


Company Statement of Financial Position

Company Statement of Changes in Equity

Company Statement of Cash Flows



The Directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and applicable law.

Under company law the Directors must not approve the Group and Company Financial Statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the Group’s profit or loss for that year. In preparing each of the Group and Company financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with IFRSs as adopted by the EU; and

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

The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial position and profit or loss of the Company and which enable them to ensure that the financial statements of the Group are prepared in accordance with applicable IFRSs, as adopted by the EU and comply with the provisions of the Companies Act 2014. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and the Company and to prevent and detect fraud and other irregularities. The Directors are also responsible for preparing a Directors’ Report that complies with the requirements of the Companies Act 2014.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.


Denis Cregan Alan WalshDirector Director 16 March 2017 16 March 2017

Statement of Directors’ Responsibilities in respect of the Directors’ report and the financial statements

56

We have audited the Group and Company financial statements (‘‘financial statements’’) of One Fifty One plc for the year ended 31 December 2016 which comprise the Group Income Statement, the Group Statement of Other Comprehensive Income, the Consolidated and Company Statement of Financial Position, the Group and Company Statement of Changes in Equity, the Consolidated and Company Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is Irish law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and, as regards the Company financial statements, as applied in accordance with the provisions of the Companies Act 2014. Our audit was conducted in accordance with International Standards on Auditing (ISAs) (UK and Ireland).

Opinions and conclusions arising from our audit 1 Our opinion on the financial statements is unmodifiedIn our opinion:

• the Group financial statements give a true and fair view of the assets, liabilities and financial position of the Group as at 31 December 2016 and of its profit for the year then ended;

• the Company statement of financial position gives a true and fair view of the assets, liabilities and financial position of the Company as at 31 December 2016;

• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

• the Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union, as applied in accordance with the provisions of the Companies Act 2014; and

• the Group financial statements and Company financial statements have been properly prepared in accordance with the requirements of the Companies Act 2014.

2 Our conclusions on other matters on which we are required to report by the Companies Act 2014 are set out belowWe have obtained all the information and explanations which we consider necessary for the purposes of our audit.

In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited and the financial statements are in agreement with the accounting records.

In our opinion the information given in the Directors’ Report is consistent with the financial statements.

3 We have nothing to report in respect of matters on which we are required to report by exception ISAs (UK & Ireland) require that we report to you if, based on the knowledge we acquired during our audit, we have identified information in the annual report that contains a material inconsistency with either that knowledge or the financial statements, a material misstatement of fact, or that is otherwise misleading.

In addition, the Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions required by sections 305 to 312 of the Act are not made.

Basis of our report, responsibilities and restrictions on use As explained more fully in the Statement of Directors’ Responsibilities set out on page 56, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014. Our responsibility is to audit and express an opinion on the financial statements in accordance with Irish law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council’s Ethical Standards for Auditors.

Independent Auditor’s report to the members of One Fifty One plc

57One51 Annual Report & Accounts 2016

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An audit undertaken in accordance with ISAs (UK & Ireland) 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 Group and 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.

Whilst an audit conducted in accordance with ISAs (UK & Ireland) is designed to provide reasonable assurance of identifying material misstatements or omissions it is not guaranteed to do so. Rather the auditor plans the audit to determine the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements does not exceed materiality for the financial statements as a whole. This testing requires us to conduct significant audit work on a broad range of assets, liabilities, income and expense as well as devoting significant time of the most experienced members of the audit team, in particular the engagement partner responsible for the audit, to subjective areas of the accounting and reporting.

Our report is made solely to the Company’s members, as a body, in accordance with section 391 of the Companies Act 2014. 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.

Colin O’Brienfor and on behalf ofKPMG Chartered Accountants, Statutory Audit Firm1 Stokes PlaceSt. Stephen’s GreenDublin 2

16 March 2017

Independent Auditor’s Report to the members of One Fifty One plc(continued)

58

2016

Exceptional items

(note 7) Total

2015(restated -

see note 1)

Exceptional items

(note 7)

Total(restated -

see note 1)

Note €’000 €’000 €’000 €’000 €’000 €’000

Continuing operationsRevenue 3 348,214 - 348,214 251,388 - 251,388

Cost of sales (266,096) - (266,096) (186,707) - (186,707)

Gross profit 82,118 - 82,118 64,681 - 64,681Operating expenses, net (including non-recurring items) 4 (51,731) (1,526) (53,257) (46,791) (2,664) (49,455)

Operating profit 30,387 (1,526) 28,861 17,890 (2,664) 15,226Finance costs 9 (8,875) - (8,875) (5,684) - (5,684)Share of profit of equity-accounted investee 8 3,933 - 3,933 24,260 - 24,260

Profit before taxation 25,445 (1,526) 23,919 36,466 (2,664) 33,802Income tax (expense)/credit 10 (3,850) 330 (3,520) (3,068) 446 (2,622)

Profit from continuing operations 21,595 (1,196) 20,399 33,398 (2,218) 31,180

Discontinued operationsProfit/(loss) from discontinued operations, net of tax 11 1,539 (5,881) (4,342) (1,511) (11,270) (12,781)Profit for year: all attributable to equity holders of the parent 23,134 (7,077) 16,057 31,887 (13,488) 18,399

Earnings per shareBasic earnings per share (cents) 12 - - 10.25 - - 11.76Diluted earnings per share (cents) 12 - - 9.88 - - 11.30

Earnings per share – continuing operationsBasic earnings per share (cents) 12 - - 13.02 - - 19.92Diluted earnings per share (cents) 12 - - 12.55 - - 19.15



Group Income StatementFor the year ended 31 December 2016


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2016 2015

Note €’000 €’000

Other comprehensive income

Profit for the year 16,057 18,399

Items that are or may be reclassified to profit or lossForeign operations – foreign currency translation differences from non-euro entities 22 (10,189) 640Share of equity-accounted investee’s other comprehensive income 8 (1,237) (1,256)Increase in fair value of Put liability 22 (37,764) (1,925)Foreign currency translation movement relating to Put liability 22 (2,116) 2,073Available-for-sale financial assets -net change in fair value 16 841 -

Other comprehensive income (50,465) (468)

Total other comprehensive income (50,465) (468)

Total comprehensive income: all attributable to equity holders of the parent (34,408) 17,931

Group Statement of Other Comprehensive IncomeFor the year ended 31 December 2016

60

2016

2015(restated - see

note 1)

Note €’000 €’000

AssetsProperty, plant and equipment 13 159,739 161,929Goodwill and intangible assets 14 137,382 140,712Equity-accounted investees 8 4,046 1,527Investment property 15 1,401 1,500Available-for-sale financial assets 16 5,519 1,279Trade and other receivables 19 5,983 4,106Deferred tax assets 29 5,243 5,811

Non-current assets 319,313 316,864Inventories 18 39,102 30,428Trade and other receivables 19 52,085 67,901Cash and cash equivalents 20 39,350 25,499Assets held for sale 21 57,718 2,418

Current assets 188,255 126,246

Total assets 507,568 443,110

EquityShare capital 22 1,571 1,570Share premium 22 88,587 88,577Reserves 22 (43,435) 5,344

Retained earnings 71,916 57,089

Total equity 118,639 152,580

LiabilitiesLoans and borrowings 23 175,397 132,271Trade and other payables 24 4,413 3,191Deferred contingent consideration 28 72,288 32,826Government grants 26 1,918 1,763Provisions 27 496 866Deferred tax liabilities 29 33,653 26,684

Non-current liabilities 288,165 197,601Loans and borrowings 23 12,497 9,763Trade and other payables 24 73,782 77,139Deferred contingent consideration 28 350 357Government grants 26 333 187Provisions 27 294 900

Corporation tax payable 2,370 4,583Liabilities held for sale 21 11,138 -

Current liabilities 100,764 92,929

Total liabilities 388,929 290,530

Total equity and liabilities 507,568 443,110



Consolidated Statement of Financial Position As at 31 December 2016


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Group Statement of Changes in Equity For the year ended 31 December 2016

62

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Group Statement of Changes in Equity For the year ended 31 December 2015


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2016 2015

Note €’000 €’000

Net cash flows from operating activities before working capital movements 32 46,453 31,210Movements in working capital 32 9,064 2,477Net cash flows from operating activities 55,517 33,687Cash flows from investing activitiesProceeds from sale of property, plant and equipment & intangible assets 288 2,520Disposal/discontinuation of subsidiary undertakings, net of cash disposed 501 (871)Share redemption proceeds from equity-accounted investee (net of associated costs) - 51,241Dividend received from equity-accounted investee 8 177 -Disposal of investment property and property held-for-sale 2,564 2,050Acquisition of property, plant and equipment (31,737) (23,821)Acquisition of intangible assets 14 (527) (423)Acquisition of subsidiaries, including associated costs and net of cash acquired (21,297) (175,855)Deferred consideration paid 28 (366) (397)Grants received 26 723 175Net cash used in investing activities (49,674) (145,381)Cash flows from financing activitiesFinance costs paid (9,183) (5,770)Net proceeds from equity issued 11 63Net drawdown of bank borrowings 17,439 54,660Drawdown of other borrowings - 29,092Payment of finance lease liabilities - (325)Net cash from financing activities 8,267 77,720Net increase/(decrease) in cash and cash equivalents 14,110 (33,974)Cash and cash equivalents at 1 January 25,499 59,629Effect of movements in exchange rates on cash held (259) (156)Cash and cash equivalents at 31 December 39,350 25,499

Consolidated Statement of Cash Flows For the year ended 31 December 2016

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1. Statement of significant accounting policiesReporting EntityOne Fifty One plc (the ‘Company’) is incorporated in Ireland. The financial statements for the year ended 31 December 2016 consolidate the individual financial statements of the Company and its subsidiaries (together referred to as the ‘Group’ or ‘One51’) and show the Group’s interest in its equity-accounted investee under the equity method of accounting.

The individual and Group financial statements of the Company were approved for issue by the Directors on 16 March 2017.

The Income Statement comparative amounts have been restated so as to separately disclose the results of continuing and discontinued operations. Discontinued operations are outlined in note 11.

The Statement of Financial Position as at 31 December 2015 has been restated so as to reflect final fair value adjustments in respect of the IPL Inc. acquisition. See note 17 for details of these adjustments.

The following accounting policies have been applied consistently to all periods presented in these consolidated financial statements.

Statement of complianceThe consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and their interpretations issued by the International Accounting Standards Board (IASB) as adopted by the EU.

The individual financial statements of the Company (‘Company financial statements’) have been prepared in accordance with IFRSs as adopted by the EU and as applied in accordance with the Companies Act 2014 which permits a company that publishes its Company and Group financial statements together to take advantage of the exemption in Section 304 of the Companies Act 2014 from presenting to its members its Company income statement and related notes that form part of the approved Company financial statements.

The IFRSs adopted by the EU and applied by the Company and Group in the preparation of these financial statements are those that were effective for the year ending 31 December 2016.

Basis of PreparationThe consolidated financial statements, which are presented in euro, the Company’s functional currency, rounded to the nearest thousand (except where stated), have been prepared under the historical cost convention, except for the following material items:

Items Measurement basis

Derivative financial instruments Fair value

Available-for-sale financial assets Fair valueInvestment property Fair value

Share-based payment arrangementsFair value at date of grant for equity settled and fair value at statement of financial position date for cash settled

Deferred contingent consideration – Put Liability Fair value

The methods used to measure fair values are discussed further within the relevant notes.

The key estimates and assumptions used in applying the Group’s accounting policies and in measuring its assets and liabilities are set out in note 2.

Going ConcernThe directors believe that sufficient financial resources are available to enable the Group to meet its obligations as they fall due, covering a period of not less than twelve months from the date of approval of the financial statements. In forming their view the directors have taken into consideration the future financial requirements of the Group and Company and the existing Irish bank facilities which have a maturity in December 2020. In addition, a “ring-fenced” facility drawn down during the prior year to part fund the IPL Inc. acquisition matures in July 2020. For this reason, the directors continue to adopt the going concern basis in preparing the financial statements.



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1. Statement of significant accounting policies (continued)Basis of consolidation(a) Business combinationsThe Group accounts for business combinations using the acquisition method when control is transferred to the Group (see (b) below). The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment (see below). Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. Where there is a Put Option held by a non-controlling interest (“NCI”) in a subsidiary undertaking whereby that party can put on the Group to acquire the NCI’s shareholding in the subsidiary at a future date, the Group applies the anticipated-acquisition method of accounting to this arrangement by recognising a contingent consideration liability at fair value, being the Group’s estimate of the amount required to settle that liability. Discounting is applied where the settlement of the liability is not anticipated within a 12 month period from the Statement of Financial Position date. Any remeasurements required due to changes in fair value of the Put Liability estimation, are recognised in equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in fair value or the contingent consideration are recognised in profit or loss.

The assets and liabilities of a subsidiary are measured at their fair value at the date of acquisition. Where the initial accounting for a business combination is determined provisionally, adjustments may be made to the provisional values allocated to the identifiable assets and liabilities for a period of 12 months from the date of acquisition.

The acquisition method of accounting is applied in the same manner as detailed above to the proportionate share of net identifiable assets acquired in an equity-accounted investee. Goodwill arising on the acquisition of subsidiaries is shown separately in the statement of financial position while goodwill arising on the acquisition of equity-accounted investees is recognised as part of the carrying amount of such investments.

(b) SubsidiariesSubsidiary undertakings are those entities controlled by the Group when it is exposed, or has rights to variable returns from its involvement with a subsidiary and has the ability to effect returns through its power over the subsidiary. The amounts included in these financial statements in respect of subsidiaries are taken from their latest financial statements prepared up to the year end. Where necessary, the accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group. All subsidiaries have coterminous financial year ends.

The results of subsidiary undertakings are included in the consolidated income statement from the date on which control commences until the date on which control ceases. Upon the acquisition of a business, fair values are attributed to the identifiable net assets acquired. Transaction costs are expensed as incurred.

Goodwill arising on acquisitions is dealt with as set out below.

(c) Loss of controlWhen the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related non-controlling interest and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

Notes to the Consolidated Financial Statements (continued)

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1. Statement of significant accounting policies (continued)(d) Interest in equity-accounted investeeThe Group’s interest in its equity-accounted investee comprises an interest in an associate undertaking.

Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies.

The Group’s interest in its associate undertaking is accounted for using the equity method. It is initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of profit or loss and other comprehensive income of its equity-accounted investee, until the date on which significant influence ceases.

(e) Transactions eliminated on consolidation and equity accounting Intra-Group balances and income and expenses arising from intra-Group transactions, are eliminated in preparing the Group financial statements. Unrealised gains and income and expenses arising from transactions with an associate are eliminated to the extent of the Group’s interest in the entity.

Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that they do not provide evidence of impairment.

Company financial statementsInvestments in subsidiaries and equity-accounted investees are carried at cost less impairment. Dividend income is recognised when the right to receive payment is established.

GoodwillGoodwill represents amounts arising on the acquisition of subsidiaries and equity-accounted investees as a result of the fair value of consideration transferred exceeding the fair value of the identifiable net assets acquired. Goodwill arising on business combinations is capitalised in the statement of financial position. Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment at a consistent time each financial year. Goodwill is stated at cost less any accumulated impairment losses.

Goodwill arising on the acquisition of equity-accounted investees is included in the carrying amount of the investments; other goodwill is shown separately in the statement of financial position.

Intangible Assets(a) Research and development expenditureResearch and development costs are expensed in the income statement as incurred as the Group’s development costs do not meet the criteria for recognition under IAS 36 Intangible Assets.

(b) Other intangiblesIntangible assets, including customer relationships, patents and trademarks acquired as part of a business combination and with finite useful lives, are capitalised at their acquisition date fair value where this can be measured reliably. They are amortised to the income statement on a straight line basis over the period of their expected useful lives.

Other intangible assets purchased separately from a business are capitalised at their cost and amortised. Useful lives are as follows:

Customer relationships - 8 to 15 yearsLicences and computer software - 5 to 8 yearsBrand names - 4 to 5 years


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1. Statement of significant accounting policies (continued)Property, Plant and EquipmentBuildings and non-freehold land are carried at cost less accumulated depreciation. Freehold land is carried at cost as no depreciation is provided for. All other items of property, plant and equipment are stated at cost less accumulated depreciation. The charge for depreciation is calculated to write down the cost or valuation of items of property, plant and equipment to their estimated residual values by equal annual instalments over their expected useful lives which are as follows:

Freehold buildings - 25 to 50 yearsLeasehold land and buildings - shorter of the term of each lease and the useful life of the assetPlant and machinery - 5 to 18 yearsFixtures and fittings - 5 to 15 yearsTransportation assets - 3 to 5 yearsAssets under construction - Not depreciated until commissioned and ready for use

Expected useful lives and estimated residual values are assessed annually. Provision is also made for any impairment of items of property, plant and equipment.

Gains and losses on disposals of property, plant and equipment are recognised on the completion of sale. Gains and losses on disposals are determined by comparing the proceeds received with the carrying amount and are included in profit or loss.

Where deposits are paid to manufacturers for assets which are specified to the Group’s uses and requirements, these amounts are included within assets under construction in property, plant and equipment, but not depreciated until the asset has been received, installed, commissioned and ready for use.

Property, plant and equipment held for sale are disclosed separately and are measured at the lower of their carrying amount and fair value less costs to sell.

Investment propertiesInvestment property is initially measured at cost and subsequently at fair value with any change therein recognised in profit or loss.

Any gain or loss on disposal of investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. When investment property that was previously classified as property, plant and equipment is sold, any related amount included in the revaluation reserve is transferred to retained earnings.


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1. Statement of significant accounting policies (continued)Available-for-sale financial assetsCertain of the Group’s investments are classified as available-for-sale financial assets and are stated at fair value. Investments in this type of equity instrument comprise investments in listed entities (i.e. entities quoted on a recognised Stock Exchange), and unquoted financial instruments.

Any dividends received from available-for-sale investments are recognised in other operating income in the income statement.

When an investment is disposed of the cumulative gain or loss in equity is transferred to the income statement. Any difference between the carrying value of an investment and the proceeds realised on disposal is recognised in the income statement.

Declines in fair value below cost which are significant and prolonged are regarded as impairment losses. All impairment losses are recognised in the income statement while other changes in fair value are recognised in equity.

On disposal of the available-for-sale financial assets, the carrying amount is deemed to be the fair value at the date of the previous published statement of financial position.

Foreign currency(a) Foreign currency transactionsTransactions in foreign currencies are translated into the functional currency of the entity at the foreign exchange rate ruling at the date of the transaction. Non-monetary assets carried at historic cost are not subsequently retranslated. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Monetary assets and liabilities denominated in foreign currencies at the statement of financial position date are translated into the functional currency at the foreign exchange rate ruling at that date. Foreign exchange movements arising on translation are recognised in the income statement, within other operating income/(expense).

(b) Foreign operationsThe assets and liabilities of foreign currency denominated operations, including goodwill and fair value adjustments arising on acquisition, are translated into euro at the foreign exchange rates ruling at the reporting date. The income and expenses of foreign currency denominated operations are translated into euro at average rates for the year on the basis that it is representative of the rates applicable to individual transactions. Foreign exchange movements arising on translation of the net investment in a foreign operation, including those arising on long term intra-Group loans deemed to be quasi equity in nature, are recognised directly in other comprehensive income, in the currency translation reserve. To the extent the hedge is effective, the portion of exchange gains or losses on foreign currency borrowings used to provide a hedge against a net investment in a foreign operation is recognised directly in other comprehensive income. When a foreign subsidiary is disposed of the cumulative amount recognised in the currency translation reserve forms part of the gain or loss on disposal.

The principal non-euro currencies applicable to the Group are Pound Sterling, Canadian Dollar, Chinese Renminbi and US Dollar. The average and closing rates for the euro for these currencies were:

Average Closing

2016 2015 2016 2015

Pound Sterling 0.8187 0.7262 0.8562 0.7340Canadian Dollar* 1.4669 1.4647 1.4188 1.5116Chinese Renminbi 7.3494 6.9733 7.3202 7.0608US Dollar* 1.1068 1.1003 1.0541 1.0887

* average rate for 2015 represents period from date of acquisition of IPL Inc. (23 July 2015) to 31 December 2015.


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1. Statement of significant accounting policies (continued)Impairment of Non-Financial AssetsThe carrying amount of the Group’s non-financial assets other than inventories (which are carried at the lower of cost and net realisable value), investment property (which are carried at fair value) and deferred tax assets (which are recognised based on recoverability), are tested for impairment when an event or transaction indicates that an impairment may have occurred. If any such indication exists, an impairment test is carried out and the asset is written down to its recoverable amount as appropriate. Goodwill is tested annually for impairment.

The recoverable amount of an asset is the greater of its net recoverable amount and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which it belongs.

Goodwill is tested for impairment at 31 December each year or more frequently if events or changes in circumstances indicate that carrying value may be impaired. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amounts of the other assets in the unit on a pro-rata basis.

An impairment loss, other than in the case of goodwill, is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Government GrantsCapital grants for the acquisition of assets are recognised at their fair value when there is reasonable assurance that the grant will be received and any conditions attaching will be fulfilled. Capital grants are held on the statement of financial position as deferred credits and released to the income statement by instalments over the estimated useful lives of the assets to which they relate.

Other grants are credited to the income statement to offset the matching expenditure.

ProvisionsA provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and the outflow can be measured reliably. Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the statement of financial position date. If the effect is material, provisions are measured by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Finance LeasesLeases of property, plant and equipment where substantially all the risks and rewards of ownership transfer to the Group are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased item and the present value of the minimum lease payments.

Each lease payment is allocated between the liability and finance charges so as to achieve a constant interest charge on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in interest-bearing loans and borrowings, allocated between current and non-current as appropriate. The interest element of the finance cost is charged to the income statement over the lease period. Assets held under finance leases are depreciated over the shorter of their expected useful lives or the lease term.


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1. Statement of significant accounting policies (continued)Operating LeasesLeases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases, net of incentives received from the lessor, are charged to the income statement on a straight-line basis over the period of the lease. Income earned from operating leases is credited to the income statement when earned.

Employee Benefits(a) Short term employee benefitsShort term employee benefits are recognised as an expense as the related employee service is received.

(b) Retirement benefit obligationsDefined contribution pension schemesThe Group operates defined contribution pension schemes. The assets of these schemes are held separately from those of the Group in independently administered funds. The amount charged to the income statement represents the contributions payable to the scheme in respect of the accounting period. Under such schemes, the Group has no obligation to make further contributions to these schemes beyond the contracted amount.

Share based paymentsThe Group operates a number of equity and cash settled incentive and retention plans.

Equity settled plansThe grant date fair value of equity instruments granted is generally recognised as an employee expense with a corresponding increase in equity over the period during which the employees become unconditionally entitled to the equity instrument. The fair value of the equity instruments granted is either the market price at the date of grant or is measured using an option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of equity instruments expected to vest as a result of failure to meet service or non-market based performance conditions.

Cash settled plansThe Group operates an Annual Bonus plan for employees and also a long term cash settled bonus scheme. The plan operates on an individual basis by providing contingent entitlements to a lump sum award. Awards are applied through the issuance of shares in the Company (at the discretion of the Remuneration Committee) or the cash equivalent. The fair value of the amount payable to employees in respect of cash-settled awards is recognised as an expense in the income statement with the corresponding increase in liabilities over the period that the employees become unconditionally entitled to the payment. The liability is re-measured at each reporting date and at settlement date based on fair value. Any changes are recognised as an employee benefit expense / credit in the income statement.

InventoriesInventories are stated at the lower of cost and net realisable value. In determining the cost of raw materials, consumables and goods purchased for resale, the weighted average purchase price method is used. In the case of finished goods and work in progress, cost is defined as the aggregate cost of raw material, direct labour and the attributable proportion of direct production overheads based on normal operating capacity. Net realisable value is based on normal selling price, less further costs expected to be incurred to completion and disposal.

Provision is made, where necessary, for slow moving, obsolete and defective inventory.

Income taxationIncome tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.


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1. Statement of significant accounting policies (continued)(a) Current taxCurrent tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty relating to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

Current tax assets and liabilities are offset only if certain criteria are met.

(b) Deferred taxDeferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

• temporary differences related to investments in subsidiaries and associates to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of investment property measured at fair value is presumed to be recovered through sale, and the Group has not rebutted this presumption.

Deferred tax assets and liabilities are offset only if certain criteria are met.


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1. Statement of significant accounting policies (continued)Classification of Financial Instruments issued by the CompanyFinancial instruments issued by the Company are treated as equity (i.e. forming part of shareholders’ equity) only to the extent that they meet the following two conditions:

(a) They include no contractual obligations upon the Company (or Group as the case may be) to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Company (or Group); and

(b) Where the instrument will or may be settled in the Company’s own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company’s own equity instruments or is a derivative that will be settled by the Company exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability measured at amortised cost.

Where the instrument so classified takes the legal form of the Company’s own shares, the amounts presented in these financial statements for called-up share capital and share premium accounts exclude amounts in relation to those shares.

Where a financial instrument that contains both equity and financial liability components exists these components are separated and accounted for individually under the above policy. The finance cost on the financial liability component is correspondingly higher over the life of the instrument.

Finance payments associated with financial liabilities are dealt with as part of finance charges in the income statement. Finance payments associated with financial instruments that are classified as part of shareholders’ equity are dealt with as appropriate in equity.

Cash and Cash EquivalentsCash and cash equivalents comprise cash balances and deposits, including bank deposits of less than three months maturity on acquisition. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

Treasury sharesWhere the Group purchases the Company’s equity share capital, the consideration paid is deducted from total shareholders’ equity and classified as treasury shares until they are cancelled. Where such shares are subsequently sold or reissued, any consideration received is included in total shareholders’ equity.

Ordinary Shares and Deferred Convertible Ordinary Shares purchased by the One Fifty One Group EBT Trustees Limited on behalf of the Company under the terms of the Group equity settled plans are recorded as Treasury Shares in the consolidated statement of financial position.

Share Capital and Share PremiumOrdinary Shares and share premium are classified as equity.

Share capital represents the nominal value of equity shares. Share premium represents the excess over nominal value of the fair value of consideration received. Incremental costs attributable to the issuance of new shares or options are shown in equity as a deduction from share premium.

Trade and Other ReceivablesTrade and other receivables are initially measured at fair value and are thereafter measured at amortised cost using the effective interest method less any provision for impairment. A provision for impairment of trade and other receivables is recognised 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.


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1. Statement of significant accounting policies (continued)Trade and Other PayablesTrade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Derivative Financial InstrumentsForeign currency derivatives are entered into only when they match an existing foreign currency asset or liability or are used to hedge a forecasted transaction. While the Group does not enter into speculative transactions, it has not applied the hedge accounting requirements of IAS 39. Derivative financial instruments are measured at fair value at each reporting date and the movement in fair value is recognised in the income statement.

Loans and borrowingsInterest-bearing bank borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, they are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of borrowings on an effective interest basis.

RevenueGoods soldRevenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, trade discounts, volume rebates and sales taxes. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. This is normally deemed to occur either on despatch or, in the case of the metals reporting segment, delivery of goods.

ServicesRevenue from services rendered is recognised in the income statement in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed with reference to surveys of work performed and agreed with the customer.

Finance CostsFinance costs comprise finance income and finance expense.

Finance expense comprises interest expense on borrowings, unwinding of the discount on provisions, finance lease interest, derivative mark to market adjustments, borrowing extinguishment costs and arrangement and other bank related fees. Interest expense on borrowings (including arrangement and other related fees) and finance lease interest expense are recognised in the income statement using the effective interest method.

Finance income comprises interest income on cash invested. Interest income is recognised as it accrues using the effective interest method. Finance costs paid are included in the Statement of Cash Flows within financing activities.

Segmental ReportingOperating segments, defined as components of the Group that engage in business activities from which they may earn revenues and incur expenses, are identified in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker (‘CODM’). The CODM, who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the Board of Directors of One51 plc. The Group has determined that it has three reportable operating segments at 31 December 2016.


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1. Statement of significant accounting policies (continued)Exceptional ItemsThe Group has adopted an income statement format which seeks to highlight significant items within the Group’s results for the year. The Group believes this presentation is a more meaningful and helpful analysis as it highlights non-trading items. Such items may include significant restructuring (including redundancy costs associated with a disposed/divested/discontinued operations), transaction and integration costs related to acquisition activity, profits or losses on disposal or termination of assets, operations and investments including associated transaction costs, impairment of assets, together with items that are, by their nature, non-trading. Judgement is used by the Group in assessing the particular items which by virtue of their size or incidence, should be disclosed in the income statement and related notes as exceptional items.

Non-recurring itemsNon-recurring items are those items of financial performance that the Group considers should be disclosed to assist in understanding trading and financial performance achieved by the Group, so as to facilitate comparison with prior periods and to help assessment of trends in financial performance. Judgement is used by the Group in assessing the particular items that should be classified as non-recurring items.

Non-current assets held-for-saleNon-current assets and disposal groups are classified as held-for-sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. The assets held-for-sale are stated at the lower of their carrying amount and fair value less costs to sell.

Discontinued OperationsA discontinued operation is a component of the Group’s business that represents a separate major line of business, geographical area of operations or is material to revenue or operating profit and has been disposed of or is held for sale. When an operation is classified as a discontinued operation, the comparative income statement is restated as if the operation had been discontinued from the start of the earliest period presented. Cash flows relating to discontinued operations are treated as operating cash flows.

New Standards and Interpretations The following standards and interpretations issued by the IASB and the IFRS Interpretations Committee are effective for the first time in the current financial year and have been adopted with no significant impact on the Group’s result for the year or financial position:

New/Revised International Financial Reporting Standards EU Effective Date – periods beginning on or after

IAS 19 Defined Benefit Plans; Employee Contributions 1 February 2015IFRS 2 Share-based payments 1 February 2015IFRS 3 Business Combinations 1 February 2015IFRS 8 Operating Segments 1 February 2015IFRS 13 Fair Value Measurement 1 February 2015IAS 16 Property Plant and Equipment 1 February 2015IAS 24 Related Party Disclosures 1 February 2015IAS 38 Intangible Assets 1 February 2015


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1. Statement of significant accounting policies (continued)A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2016 and have not been applied in preparing these consolidated financial statements. None of these are expected to have a significant effect on the consolidated financial statements of the Group, except the following set out below:

IFRS 9 Financial Instruments became effective for accounting periods beginning on or after 1 November 2016 and this addressed the classification, measurement and recognition of financial assets and liabilities. The Standard includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting. The IASB completed its project to replace IAS 39 in phases, adding to the Standard as it completed each phase. The Group is currently evaluating the impact that IFRS 9 will have on its 2017 financial statements.

IFRS 15 Revenue from Contracts with Customers specifies how and when an IFRS reporter will recognise revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures. The Standard provides a single, principles based five-step model to be applied to all contracts with customers. The Group is currently evaluating the impact that IFRS 15 will have on its financial statements. IFRS 15 was endorsed by the EU on 22 September 2016.

IFRS 16 Leases sets out the principle for the recognition, measurement, presentation and disclosure of leases for both lessee and lessor. It eliminates the classification of leases as either operating leases or finance leases and introduces a single lessee accounting model where the lessee is required to recognise assets and liabilities for all material leases that have a term of greater than a year. The Group is currently evaluating the impact that IFRS 16 will have on its financial statements. IFRS 16 is expected to be endorsed by the EU in 2017.

There are no other IFRS standards or interpretations that are not yet effective that would be expected to have a material impact on the Group.

2. Use of judgements and estimatesThe preparation of financial statements in conformity with IFRSs as adopted by the EU requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.

The areas involving a high degree of judgement, complexity or areas where assumptions and estimates are significant to the Group financial statements relate primarily to:

• Note 14 – impairment testing of goodwill and other intangible assets requires assumptions in calculating underlying recoverable amounts including cash flows generated by operating units and discount rates used to discount future cash flows.

• Notes 15 and 16 - the valuation of equity investments classified as available-for-sale and investment properties requires a determination of fair value.

• Note 17 – acquisition of subsidiary; fair value measured on a provisional basis.


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2. Use of judgements and estimates (continued)

• Note 28 – the value of the Put liability in respect of the shareholding in IPL Inc. not owned by the Group at the Statement of Financial Position date requires determining at its fair value. Determination of appropriate accounting policy in light of absence of guidance in IFRS.

• Note 28 – the measurement of deferred contingent consideration requires assumptions around future cash flows, growth assumptions and discount rates.

• Note 29 - the recognition of deferred tax assets requires assessment of availability of future taxable profit against which carried forward tax losses can be used.

• Note 31 – the measurement of fair value of cash-settled share options at each statement of financial position date requires assumptions around share price growth, earnings per share growth and free cash flow ratios.

Measurement of fair valueA number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation technique as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices)

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

If the inputs used to measure the fair value of an asset or liability are categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group measures transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair value is included in the following notes:

Note 14 – Goodwill and intangible assets

Note 15 – Investment property

Note 16 – Available-for-sale financial assets

Note 17 – Business combinations

Note 28 – Deferred contingent consideration

Note 31 – Share based payment arrangements


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3. Operating segments (a) Basis for segmentationThe Board of One51 plc is deemed the chief operating decision maker (“CODM”) within the Group. For management purposes, the Group at year end was organised into three strategic divisions, which are its reportable segments. These divisions offer different products and services, and are managed separately. The Board reviews internal management reports of each division at least monthly. Following the Group’s disposal of its Irish Metals recycling businesses during the year and the decision to dispose of its Irish and UK Specialist Environmental Services (“SES”) businesses, the ClearCircle Environmental segment has been classified as discontinued. The only continuing operation within that division is the Metals South recycling business in the UK and this has been included under “other reconciling items” on the basis that it is continuing, but does not meet the requirements under IFRS 8 for being a separately disclosable segment. The comparative amounts have been reclassified for the purposes of consistency. The following are the Group’s reportable segments:

• IPL Inc.

• OnePlastics Group

• ClearCircle Environmental (discontinued)

The following summary describes the operations of each reportable segment.

Reportable segments Operations

IPL Inc. This segment is involved in the manufacture and sale of plastic components and instruments in Canada and the USA.

OnePlastics Group This segment is involved in the manufacture and sale of plastics components and instruments in Ireland, the United Kingdom and China.

ClearCircle Environmental (discontinued) This segment is involved with the collection and treatment of hazardous waste materials and the collection, processing and sale of metals and materials in both Ireland and the United Kingdom (see comment above in relation to Metals South recycling business in the UK).

Each of the reportable segments consist of a number of operating segments which have been aggregated together due to the similar nature of the segments’ products, production process types and nature of the regulatory environment.

The CODM monitors the results of the divisions separately in order to allocate resources between them and assess performance. Divisional performance is predominantly evaluated based on EBITDA and EBIT (before exceptional items).


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3. Operating segments (continued)(i) Revenue

2016* 2015*

€’000 €’000

Ireland 90,920 102,809UK 136,418 172,293North America 204,293 86,635Rest of world 2,274 4,273

433,905 366,010

* The amounts for 2016 includes revenues from discontinued operations of €85.7 million (2015: €114.6 million), relating to Ireland and the United Kingdom.

Revenue is disclosed geographically by country of origin.

Continuing operationsDiscontinued operations

(see note 11) Total

2016 2015 2016 2015 2016 2015

€’000 €’000 €’000 €’000 €’000 €’000

Sales of goods 345,107 250,954 61,620 74,989 406,727 325,943Rendering of services 3,107 434 24,071 39,633 27,178 40,067

348,214 251,388 85,691 114,622 433,905 366,010

No one customer accounts for more than 10% of the Group’s revenue.

(b) Information about reportable segmentsInformation related to each reportable segment is set out below. Segmental performance is evaluated based on Revenue, EBITDA and EBIT. The Board believes that EBITDA/EBIT, while not defined under IFRSs, provides a fair reflection of the underlying trading performance of the Group. EBIT represents earnings before interest, tax, exceptional and non-recurring items and the Group’s share of profits of its equity-accounted investee. EBITDA represents earnings before interest, tax, depreciation, amortisation, exceptional and non-recurring items and the Group’s share of profits of its equity-accounted investee. EBIT/EBITDA is therefore measured differently from operating profit in the Group financial statements as explained and reconciled in detail in the analysis that follows.

2016 2015

€’000 €’000

Operating profit from continuing operations before exceptional items 30,387 17,890Non-recurring items (note 4) (1,256)* 3,738*Profit/(loss) from discontinued operations, pre-tax (note 11) 1,784 (1,419)EBIT (before exceptional items) 30,915 20,209Depreciation and amortisation (note 5) 24,295* 15,858*EBITDA (before exceptional items) 55,210 36,067

*The amounts above include continuing and discontinued operations whereas in notes 4 and 5 the numbers presented are in respect of continuing operations only.


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3. O

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3. Operating segments (continued)(ii) Non-current assets

2016 2015

€’000 €’000

Ireland 20,799 53,455 UK 62,367 69,592North America 224,324 185,688Rest of world 1,061 1,039

308,551 309,774

Non-current assets exclude available-for-sale financial assets, deferred tax assets and non-current assets relating to disposal groups.

4. Operating expenses, net

Exceptional items (note 7) Exceptional items (note 7)

2016 2016 Total 2015 2015 Total

€’000 €’000 €’000 €’000 €’000 €’000

Distribution expenses (7,958) - (7,958) (8,601) - (8,601)Sales and marketing expenses (6,141) - (6,141) (3,779) - (3,779)Administrative expenses (42,554) - (42,554) (34,113) - (34,113)Other operating expenses (914) (5,595) (6,509) (4,065) (9,302) (13,367)Other operating income 5,836 4,069 9,905 3,767 6,638 10,405Total (51,731) (1,526) (53,257) (46,791) (2,664) (49,455)

Included in other operating expenses in the current year are non-recurring items relating to continuing operations totalling a charge of €0.9 million (2015: €4.1 million). These relate to lease related costs such as dilapidations, reinstatement and onerous lease charges, redundancy and other reorganisation costs and the manufacturing profit in inventory at the date of acquisition of subsidiaries as outlined in the table on page 82. Non-recurring items are those items of financial performance that the Group considers should be disclosed to assist in understanding trading and financial performance achieved by the Group, so as to facilitate comparison with prior periods and to help assessment of trends in financial performance.

Non-recurring items relating to discontinued operations totalling a charge of €0.9 million (2015: €2.1 million) are included in note 11. These relate to lease related costs such as dilapidations, reinstatement and onerous lease charges, redundancy and other reorganisation costs.


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4. Operating expenses, net (continued)Other operating expenses and income comprise the following (charges)/credits:

Other operating expenses

2016 2015

€’000 €’000

Redundancy and reorganisation costs (494) (796)Lease related costs (66) (1,204)Manufacturing profit in inventory adjustment from business combination (259) (1,126)Other (95) (939)

(914)1 (4,065) 1

Exceptional items in other operating expenses (note 7) Acquisition, aborted acquisition and post-acquisition integration costs (2,393) (7,147)Costs incurred in relation to deferred IPO process (2,060) -Impairment of available-for-sale assets - (2,130)Impairment of property, plant and equipment (157) -Other (985) (25)

(5,595) (9,302)Total (6,509) (13,367)

Other operating income

2016 2015

€’000 €’000

Foreign currency gains 1,992 1,382Income received from available-for-sale asset 3,0181 2,3231

Other 826 62

5,836 3,767Exceptional items in other operating income (note 7) Gain on settlement of third party loan 4,004 -Gain on disposal of equity-accounted investee - 6,638Other 65 - 4,069 6,638Total 9,905 10,405

1These items are classified as non-recurring items by the Group and relate to continuing operations. They amount to a net credit in the year of €2.1 million (2015: net charge of €1.7 million).


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5. Group operating profitOperating profit has been arrived at after charging the following amounts:

2016 2015

€’000 €’000

Depreciation of property, plant & equipment: - owned assets 17,290 10,456Amortisation of intangible fixed assets 2,981 1,309

Operating lease rentals: - plant and machinery 273 77 - other 3,195 3,429

Auditor’s remuneration*: - Audit services 335 310 - Other assurance services 632 28 - Tax advisory services 610 469 - Other non-audit services 406 609

* In addition to the fees paid to KPMG Ireland as set out above, fees paid to other KPMG firms outside of Ireland are as follows:

2016 2015

€’000 €’000

Audit services 193 235Tax advisory services 156 289

349 524

6. Employee benefit expenses

Note 2016 2015

€’000 €’000

Wages and salaries 60,568 40,774

Social security contributions 9,929 5,144Pension costs – defined contribution schemes 30 832 983

Termination benefits * 494 796

Termination benefits** - 905Equity-settled and cash settled share based payments 31 697 640

Total recognised in income statement 72,520 49,242

Employee numbers – Group

Management/administration 261 170

Operations 1,084 692

Total 1,345 862

*Classified as a non-recurring item.** Classified within exceptional costs.

The primary reason for the increase in payroll costs and employee numbers is due to the impact of a full year’s charge for IPL Inc., acquired in July 2015. The employee numbers stated above are average numbers for the year relating to continuing operations. The information in respect of discontinued operations is set out in note 11. The actual employee numbers at year end were 1,896 (2015: 1,606).


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7. Exceptional itemsIn accordance with the Group’s accounting policy, the following items have been presented as exceptional items for the year ended 31 December 2016:

2016 2015

€’000 €’000

Gain on settlement of third party loan (i) 4,004 -Gain on disposal of equity-accounted investee - 6,638Other 65 -Total exceptional gains from continuing operations 4,069 6,638Acquisition, aborted acquisition and post-acquisition integration costs (ii) (2,393) (7,147)Costs incurred in relation to deferred IPO process (iii) (2,060) -Impairment of property, plant and equipment (157) -Impairment of available-for-sale assets - (2,130)Other (985) (25)Total exceptional losses from continuing operations (5,595) (9,302)Net exceptional loss within operating profit from continuing operations (1,526) (2,664)Exceptional loss from discontinued operations (iv) (5,881) (11,270)Net tax credit on exceptional items 330 446Total net exceptional losses (7,077) (13,488)

(i) Gain on settlement of third party loan – (€4.0 million):During the year, the Group settled historic loan amounts owed by a third party to the Group. The amounts receivable had been fully provided by the Group for several years. The amounts recognised represent full and final settlement of amounts outstanding. The settlement included the receipt of 102,400 shares in Aryzta AG. Post settlement, these have been accounted for as an available-for-sale financial asset (see note 16).

(ii) Acquisition, aborted acquisition and post-acquisition integration costs – (€2.4 million):During the year, the Group pursued several acquisition opportunities in other entities that would complement the current Group structure. The largest acquisition made by the Group was the acquisition of Encore Industries Inc. in the United States. The transaction costs incurred in respect of this acquisition were €1.0 million. Costs incurred in respect of aborted acquisitions amounted to €1.4 million.

(iii) Costs incurred in relation to deferred IPO process – (€2.1 million): During the year, the Group incurred costs associated with a deferred IPO process, amounting to €2.1 million.

(iv) Exceptional loss from discontinued operations – (€5.9 million):During the year, the Group disposed of its Irish Metal Recycling businesses. Following the decision to divest of its SES operations, the Group has reclassified the associated assets and liabilities of these businesses as held for sale. Accordingly, where required, adjustments have been made to ensure these businesses’ net assets are carried at the lower of their carrying amount and fair value less selling costs.

The loss on disposal of the Metals Ireland businesses amounted to €4.8 million, including costs associated with redundancies and restructuring within those businesses and lease related costs.

Following the Group’s decision to divest of its SES businesses, disposal and restructuring costs incurred to date along with certain asset impairment charges, has resulted in a charge of €2.4 million in respect of this project.

Following the divestment of the Metals North UK recycling business in 2015, certain items of income have been recognised in the current year. These include a profit on disposal of a property (€0.5 million) and €2.0 million from the release of provisions originally made relating to other uncertain matters arising from the decision to cease these operations.

Other exceptional costs associated with discontinued operations amounted to €1.2 million and primarily relate to redundancy and restructuring costs, acquisition related costs and asset impairment charges.


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7. Exceptional items (continued)(v) Prior-year exceptional items principally relate to

• Gain on disposal of equity-accounted investees of €6.6 million

• Acquisition, aborted acquisition and post-acquisition integration costs of €7.1 million

• Impairment of available-for-sale financial asset of €2.1 million

• Loss on disposal/discontinuation of operations of €11.3 million

8. Equity-accounted investeeThe Group has one associate undertaking. The Group holds a 23.6% shareholding in Altas Investments plc (“Altas”) an Irish company whose principal activity is that of an investment holding company in the road and energy sectors. The Group CEO, Alan Walsh, is a Board member of Altas and has been since June 2012. On the basis of Alan Walsh’s Board membership and the Group’s 23.6% shareholding in Altas, the Group is deemed to have significant influence over the relevant activities of Altas and therefore Altas is an associate undertaking of the Group.

The Group’s interest in Altas, which is unlisted, is set out below. These numbers are based on Altas’ year to date 31 December 2016 financial information.

Associate Total

€’000 €’000

Balance at 1 January 2015 23,126 23,126Share of profit, after tax 24,260 24,260Distribution received (51,777) (51,777)Profit on disposal of associate 7,174 7,174Share of other comprehensive income (1,256) (1,256)

Balance at 31 December 2015 1,527 1,527Share of profit, after tax 3,933 3,933Distribution received (177) (177)Share of other comprehensive income (1,237) (1,237)Balance at 31 December 2016 4,046 4,046

The investment in Altas comprises entirely of equity investment with no loans outstanding.

During 2015, Altas (then known as NTR plc) announced its intention to demerge its US Wind Business into a new company (a “newco” to be called NTR plc). Following court approval of that transaction, the shareholders of Altas obtained an equivalent shareholding in the “new” NTR plc. However, it was agreed that there would be a redemption of shares by “new” NTR plc to shareholders who had requested a redemption. One51 plc received €51.8 million from this redemption in December 2015.

Shares in Altas were traded on the grey market by its brokers up to the point that it made the redemption outlined above. Altas shares are no longer traded on the grey market.

The share of associate profit per the Income Statement is €3.9 million (2015: €24.3 million) and the Group’s share of other comprehensive income is a charge of €1.2 million (2015: €1.3 million).


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8. Equity-accounted investee (continued)The following additional disclosures are set out in respect of the Group’s 23.6% share of its associate:

2016 2015

€’000 €’000

Non-current assets 16 82,038Cash and cash equivalents 46,492 177,087Other current assets 3,517 21,679Non-current liabilities (22,196) (29,534)Employee benefits - (3,700)Current liabilities (9,382) (20,971)Non-controlling interests - 5

Net assets of Altas (100%) 18,447 226,604Group’s share of Altas’ net assets (23.6%) 4,346 53,388

Adjust for:Effect of negative goodwill arising on acquisition - (7,258)Disposal of investment - (44,603)Other adjustments (300) -Carrying value at 31 December 4,046 1,527

2016 2015

€’000 €’000

Group share of revenue – associate - 82

The Group has given due consideration to all the relevant facts and circumstances associated with Altas in the context of whether the Group has control of this undertaking under IFRS 10 Consolidated Financial Statements as at 31 December 2016 and 2015. The conclusion reached, based on these assessments, is that the Group does not have control of this undertaking and that it is appropriate to account for it as an associated undertaking.

Altas’ principal place of business is in Ireland and the United Kingdom.


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9. Finance costs

2016 2015

€’000 €’000

Financial liabilities measured at amortised cost – interest expense 8,201 5,448Interest amount on finance leases - 35Convertible loan note interest (note 25) 133 133Interest income on available-for-sale assets - (85)Interest on deferred consideration (note 28) 47 70Other interest 494 83Finance costs recognised in income statement 8,875 5,684

10. Income taxes(a) Income tax expense recognised in Income Statement

2016 2015

€’000 €’000

Current tax expenseCorporation tax 2,445 2,910Total income tax credit on exceptional items (330) (446)Adjustment in respect of prior years (216) (152)Total current taxation 1,899 2,312

Deferred tax expenseDeferred tax expense relating to the origination and reversal of temporary differences 2,087 310Deferred tax resulting from change in tax rates (466) -Total deferred taxation 1,621 310Total income tax expense 3,520 2,622Corporation tax – discontinued operations 4 92Deferred tax expense relating to the origination and reversal of temporary differences – discontinued operations 241 -Total income tax expense in income statement 3,765 2,714

The Group is subject to income tax in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities based on estimates of whether additional taxes will be due. Where the final outcome of these matters is different from the amounts that were initially estimated, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. The Group estimates the most probable amount of future taxable profits, using assumptions consistent with those employed in impairment calculations, and taking into consideration applicable tax legislation in the relevant jurisdiction. These calculations also require the use of estimates.


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10. Income taxes (continued)(b) Reconciliation of effective tax rate

2016 2015

€’000 €’000

Profit before tax from continuing operations 23,919 33,802Profit before tax multiplied by the standard rate of tax of 12.5% 2,990 4,225

Effects of: Expenses not deductible for tax purposes 405 1,279Share of profits of equity-accounted investees (492) (3,033)Differences in effective tax rates on overseas earnings 853 (529)Losses for which no deferred tax asset was recognised 257 267Effect of change in tax rates - 175Adjustments in respect of prior years (681) (239)Other differences 188 477

3,520 2,622

At 31 December 2016, the Group recognised deferred tax assets of €1.6 million (2015: €4.9 million) on tax losses carried forward. The tax losses arose in the Canadian and UK tax jurisdictions and their utilisation is dependent on future profits. The directors have concluded that a forecast period of five years is the appropriate timescale over which to consider whether it is more likely than not that these entities will earn sufficient future profits to utilise the losses carried forward.

Deferred income tax liabilities have not been recognised for any taxes that would be payable on the unremitted earnings of certain subsidiaries as it is probable that any temporary differences will not reverse in the foreseeable future.

At 31 December 2016, the Group had unrecognised deferred tax assets in respect of trading losses of €3.3 million (2015: €6.1 million) and on capital losses, tangible assets and share based payments of €19.7 million (2015: €21.5 million).

11. Discontinued operationsAt 31 December 2016, the Group’s interests in Rilta Environmental Limited, ClearCircle Environmental (NI) Limited and Future Industrial Services Limited (together, “SES”) were classified as held-for-sale (see note 21) following the Group’s decision to dispose of these businesses. The results of the SES businesses are presented as discontinued and shown separately from continuing operations. The comparative 2015 financial information has also been presented as discontinued for the purposes of enabling meaningful comparison.

The Group disposed of its Irish Metals recycling businesses during the year and these are presented as discontinued operations.

The results of the Metals North UK recycling business divested in 2015, have also been presented as discontinued operations in the comparative results. These had been presented within continuing operations in the 2015 Annual Report due to their lack of significance to those financial statements, but on the basis that the results had been presented within the ClearCircle Environmental operating segment, they have been classified as part of discontinued operations in the comparative year.

The results from discontinued operations presented below include both the results of the Irish and Metals North UK businesses already divested and the SES businesses which are held for sale at year end.


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11. Discontinued operations (continued)(a) Results of discontinued operations

2016 2015

€’000 €’000

Revenue 85,691 114,622Expenses (83,907) (116,041)Results from operating activities 1,784 (1,419)Income tax (note 10) (245) (92)Results from operating activities, net of tax 1,539 (1,511)Exceptional loss on disposal of trades (4,054) (236)Other exceptionals (1,827) (11,034)Total exceptional items (note 7) (5,881) (11,270)Tax effect of exceptional items - -Loss for the year from discontinued operations (note 3) (4,342) (12,781)Basic loss per share (cents) (2.77) (8.16)Diluted loss per share (cents) (2.77) (8.16)

The loss from discontinued operations of €4.3 million (2015: €12.8 million) is attributable entirely to the owners of the Company.

2016 2015

€’000 €’000

Wages and Salaries 18,823 16,817Social security contributions 1,783 1,754Pension costs – defined contribution schemes 368 383

20,974 18,954

Exceptional and non-recurring items in employee benefit expensesTermination benefits – exceptional 755 710Termination benefits – non-recurring 97 273Total 21,826 19,937

Employee NumbersManagement/Administration 111 107Operations 351 289Total 462 396

(b) Cash flows (used in)/from discontinued operations

2016 2015

€’000 €’000

Net cash from operating activities (1,895) 2,241Net cash from investing activities (13,544) (8,725)Net cash flow for the year (15,439) (6,484)


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11. Discontinued operations (continued)(c) Effect of disposal on the financial position of the Group

2016

€’000

Property, plant and equipment (7,622)Inventory (1,185)Trade and other receivables (3,662)Trade, other payables and provisions 6,267Net assets disposed of (6,202)Consideration received/receivable, satisfied in cash 2,148Loss on disposal (4,054)

12. Earnings per share(a) Basic earnings per shareThe calculation of basic earnings per share has been based on the profit attributable to ordinary shareholders and weighted-average number of Ordinary Shares outstanding.

2016 2015Continuing operations

Discontinued operations Total

Continuing operations


€’000 €’000 €’000 €’000 €’000 €’000

Profit/(loss) attributable to ordinary shareholders 20,399 (4,342) 16,057 31,180 (12,781) 18,399

€’000 €’000 €’000 €’000 €’000 €’000

Issued Ordinary Shares at 1 January 157,038 - 157,038 156,589 - 156,589Effect of treasury shares held (434) - (434) (434) - (434)Weighted-average number of shares issued 36 - 36 352 - 352Weighted-average number of Ordinary Shares at 31 December 156,640 - 156,640 156,507 - 156,507Basic earnings per share – cents 13.02 (2.77) 10.25 19.92 (8.16) 11.76

(b) Diluted earnings per shareThe calculation of diluted earnings per share has been based on the profit attributable to ordinary shareholders noted in (a) above and the weighted-average number of Ordinary Shares outstanding after adjustment for the effects of all dilutive potential Ordinary Shares noted below.

2016 2015

’000 ’000

Profit attributable to ordinary shareholders 16,057 18,399Weighted-average number of Ordinary Shares (basic) 156,640 156,507Equity instruments with a dilutive effect – share options 5,956 6,353Weighted-average number of Ordinary Shares (diluted) at 31 December 162,596 162,860Diluted earnings per share - cents 9.88 11.30

Diluted earnings per share – cents (continuing operations) 12.55 19.15Diluted loss per share – cents (discontinued operations) (2.77) (8.16)


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12. Earnings per share (continued)At 31 December 2016, the 3,334,991 convertible loan notes (2015: 3,334,991) were excluded from the caption ‘equity items with a dilutive effect’ as their option price was at a value greater than that of the average share price during the year.

The average market value of the Company’s shares for the purpose of calculating the dilutive effect of share options and Convertible Loan Notes was based on market prices for the year during which the options and loan notes were outstanding.

(c) Adjusted Basic and Fully Diluted Earnings per ShareManagement believe that adjusted Earnings per Share as set out below provides a fair reflection of the underlying trading performance of the Group after eliminating the impact of exceptional and non-recurring items, and their tax effects and the Group’s share of after tax profits from its equity-accounted investee.

Adjusted earnings per share and adjusted fully diluted earnings per share is calculated by dividing the adjusted profit attributable to ordinary shareholders (as calculated below) by the weighted average number of Ordinary Shares outstanding. In the case of adjusted fully diluted earnings per share the number of outstanding Ordinary Shares is adjusted for the effects of all Ordinary Shares and options with a dilutive effect.

Adjusted basic and diluted earnings per share pre-exceptional and non-recurring items and the Group’s share of profit from its equity-accounted investee

2016 2015Continuing operations




€’000 €’000 €’000 €’000 €’000 €’000

Profit/(loss) attributable to ordinary shareholders (basic) 20,399 (4,342) 16,057 31,180 (12,781) 18,399Exceptional items (note 7) 1,526 5,881 7,407 2,664 11,270 13,934Non-recurring items (note 4) (2,120) 864 (1,256) 1,661 2,077 3,738Share of equity-accounted investee profits (note 8) (3,933) - (3,933) (24,260) - (24,260)Tax effect of exceptional and after tax non-recurring items (330) - (330) (446) - (446)Adjusted earnings attributable to ordinary shareholders 15,542 2,403 17,945 10,799 566 11,365Weighted-average number of Ordinary Shares at 31 December - - 156,640 - - 156,507Basic earnings per share – cents (adjusted for exceptional and non-recurring items and share of equity-accounted investee profits) - - 11.46 - - 7.26Equity instruments with a dilutive effect – share options - - 5,956 - - 6,353Weighted-average number of Ordinary Shares (diluted) at 31 December - - 162,596 - - 162,860Diluted earnings per share – cents (adjusted for exceptional items, non-recurring items and share of equity-accounted investee profits) - - 11.04 - - 6.98


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13. Property, plant and equipment

Land and buildings

Plant, machinery,

fixtures and fittings

Transport Vehicles

Assets under construction Total

€’000 €’000 €’000 €’000 €’000

CostBalance at 1 January 2015 62,445 104,041 11,474 - 177,960Acquisitions through business combinations (note 17) 31,267 55,197 608 4,489 91,561Additions 185 17,312 1,145 7,515 26,157Disposals (2,810) (2,435) (772) - (6,017)Disposal of subsidiaries - (4,524) (721) - (5,245)Reclassified to assets held for sale (8,458) - - - (8,458)Currency translation adjustments 647 475 148 224 1,494Balance as at 31 December 2015 83,276 170,066 11,882 12,228 277,452Acquisitions through business combinations (note 17) 7,113 15,195 1,303 292 23,903Additions 1,389 9,589 514 22,067 33,559Reclassified from assets under construction 586 24,495 - (25,081) -Disposals - (1,818) (755) - (2,573)Disposal of subsidiaries (7,244) (21,906) (5,897) - (35,047)Reclassified to assets held for sale (39,730) (26,506) (5,133) (384) (71,753)Currency translation adjustments (873) (11,585) (995) 374 (13,079)Balance at 31 December 2016 44,517 157,530 919 9,496 212,462

Accumulated depreciation and impairment lossesBalance at 1 January 2015 (39,561) (63,379) (9,580) - (112,520)Charge for the year (1,174) (12,633) (742) - (14,549)Disposals 1,718 1,630 772 - 4,120Disposal of subsidiaries - 4,329 270 - 4,599Impairment loss (1,482) (1,522) - - (3,004)Reclassified to assets held for sale 6,040 - - - 6,040Currency translation adjustments (17) (181) (11) - (209)Balance at 31 December 2015 (34,476) (71,756) (9,291) - (115,523)Charge for the year (1,943) (18,578) (626) - (21,147)Disposals - 1,551 734 - 2,285Disposal of subsidiaries 3,369 19,118 4,938 - 27,425Impairment loss (113) (44) - - (157)Reclassified to assets held for sale 27,978 11,814 3,063 - 42,855Currency translation adjustments 2,220 8,599 720 - 11,539Balance at 31 December 2016 (2,965) (49,296) (462) - (52,723)

Carrying amountsAt 31 December 2015 48,800 98,310 2,591 12,228 161,929At 31 December 2016 41,552 108,234 457 9,496 159,739

All property, plant and equipment of the Group are stated at depreciated historic cost, notwithstanding that upon acquisition through business combinations, an initial assessment of fair value is undertaken and adjustments made accordingly.


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13. Property, plant and equipment (continued)The amount included in the carrying amount of property, plant and equipment at 31 December 2016 that relate to assets under construction was €9.5 million (2015: €12.2 million). This amount relates to various capital projects ongoing across the Group and includes €5.8 million (2015: €3.7 million) in respect of deposits paid to manufacturers for equipment under construction to the exact specifications required by the Group.

Included in the total net book value of Plant and Machinery is €Nil (2015: €Nil) in respect of assets held under finance leases and similar hire purchase contracts. Depreciation for the year on these assets was €Nil (2015: €Nil).

The process for identifying impairments of property, plant and equipment is the same as the process as outlined in note 14 for identifying the impairments to the carrying amount of Goodwill. During the year, the Group identified certain items included within land and buildings and plant and machinery where the recoverable amounts had fallen below the carrying values. This resulted in an impairment charge of €0.2 million being recognised (2015: €3.0 million). This was classified as an exceptional item (see note 7).

14. Goodwill and intangible assets

GoodwillCustomer

relationships

Brand assets, computer

software and licences Total

€’000 €’000 €’000 €’000

CostBalance at 1 January 2015 234,622 - 5,288 239,910Acquisitions through business combinations (note 17) 58,496 36,684 1,012 96,192Additions - - 423 423Disposals (14,456) - - (14,456)Effect of movements in exchange rates 10,757 (3,546) 199 7,410Balance at 31 December 2015 289,419 33,138 6,922 329,479Acquisitions through business combinations (note 17) 7,221 6,686 - 13,907Additions - - 527 527Disposals (108,723) - - (108,723)Reclassified to assets held-for-sale (25,138) (2,327) (391) (27,856)Effect of movements in exchange rates (14,623) 2,356 1,034 (11,233)Balance at 31 December 2016 148,156 39,853 8,092 196,101

Accumulated amortisation and impairment lossesBalance at 1 January 2015 (187,475) - (3,064) (190,539)Amortisation - (972) (337) (1,309)Impairment loss - - (257) (257)Disposals 14,456 - - 14,456Effect of movements in exchange rates (12,793) 28 1,647 (11,118)Balance at 31 December 2015 (185,812) (944) (2,011) (188,767)Amortisation - (2,496) (652) (3,148)Disposals 108,723 - - 108,723Reclassified to assets held for sale 12,506 125 240 12,871Effect of movements in exchange rates 13,001 (134) (1,265) 11,602Balance at 31 December 2016 (51,582) (3,449) (3,688) (58,719)

Carrying amountsAt 31 December 2015 103,607 32,194 4,911 140,712At 31 December 2016 96,574 36,404 4,404 137,382


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14. Goodwill and intangible assets (continued)Goodwill and intangible assets associated with discontinued operations have been reclassified as assets held for sale on the face of the statement of financial position.

The acquisition of IPL Inc. in July 2015 was the principal driver behind the increase in goodwill and intangible assets during the prior year, while the current year’s most significant amount relates to the Encore acquisition.

Customer relationships, brands and computer software and licences are amortised in accordance with the Group’s accounting policy. Amortisation is included in administration expenses.

Goodwill acquired on business combinations is allocated to cash generating units (“CGUs”) for the purpose of impairment testing. The CGUs represent the lowest level within the Group at which the associated goodwill is monitored for management purposes, and are not larger than the reportable operating segments. The CGUs identified by the Group are as follows:

• Metals Recycling UK

• Plastics (Ireland and China)

• Plastics (UK)

• Plastics (North America)

A summary of the goodwill held by CGU is presented below:

2016 2015

€’000 €’000

Hazardous Waste Management (Ireland and UK) - 11,534Metals UK South Recycling 10,811 12,610Plastics Ireland & China 4,263 4,263Plastics UK 18,022 21,024Plastics North America 63,478 54,176Total 96,574 103,607

Goodwill attributable to the Hazardous Waste Management (Ireland and UK) CGU has been reclassified as assets held-for-sale (see note 21). The impairment assessment for this CGU is based on estimated recoverable value through sale.

The cash flow forecasts employed for this computation are extracted from a three year plan approved by the Board. Cash flows for a further two years and for the terminal value period, which is applied to the year five cash flows, are based on growth assumptions of 2% (2015: 2%). A present value of the future cash flows is also calculated using a pre-tax discount rate representing the Group’s estimated pre-tax average cost of capital ranging from 9.25% to 10.03% (2015: 9.8% to 10.2%).

Projected cash flows are most sensitive to assumptions regarding future profitability, replacement capital expenditure requirements and working capital investment and tax considerations. The values applied to these key assumptions are derived from a combination of external and internal factors, based on past experience together with management’s future expectations about business performance.

Discount rates reflect the current market assessment of the risks specific to each CGU. The discount rates were estimated by applying the Group’s weighted average cost of capital to reflect the market assessment of risks and for which the cash flow projections have not been adjusted.

The Group’s earnings are significantly dependent on the selling prices and margins obtained for products sold. These, in turn, are largely determined by market supply and demand. There is a range of factors that affect this supply and demand: competing products, the availability of source material and other general conditions in the market place.


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14. Goodwill and intangible assets (continued)The carrying value for the net assets of the CGUs identified above, including the attributable goodwill for that division, is calculated based on the sum of the net assets of the entity comprising the CGU. The carrying value is compared to the expected recoverable value. The value-in-use calculations are sensitive to changes in assumptions, particularly relating to assumptions on cash flows generated by the individual CGUs, growth rates and discount rates applied to these cash flows.

As a result of this exercise, no impairment charge was recognised in the current or prior year.

An increase of 10% in the discount rate at the reporting date would have resulted in an impairment charge for the year of €Nil (2015: €25.3 million). A 10% (2015: 10%) reduction in the cash flow projections would have resulted in an impairment charge for the year of €Nil (2015: €25.2 million).

15. Investment property

2016 2015

€’000 €’000

Balance at 1 January 1,500 1,460Effects of currency translation (99) 40Balance at 31 December 1,401 1,500

The Group holds a number of properties, comprising land and buildings held for rental income or capital appreciation and not occupied by the Group, which are classified as investment properties. These properties are located in the Republic of Ireland and the United Kingdom.

Measurement of fair valueFair value hierarchyThe carrying amount of the Group’s investment properties is the fair value of the property as determined by the directors. In preparing the property valuations in prior years, the directors consulted with registered independent appraisers having an appropriate recognised professional qualification and with recent experience in the location and category being valued. In general, valuations have been supported by either market rental yields or estimated disposal prices. Certain properties were valued by professionally qualified external valuers during 2015, others at 31 December 2013 and the remaining properties were valued by professional qualified external valuers at 31 December 2012. All sets of valuations were subsequently updated by the directors at 31 December 2016.

The fair value measurement for investment property of €1.4 million (2015: €1.5 million) has been categorised as Level 3 fair value based on the inputs to the valuation techniques used.

Valuation Technique and Significant Unobservable InputsThe following table shows the valuation techniques used in measuring the fair value of investment properties, as well as the significant unobservable inputs used. The estimated disposal prices method is used for land held for sale or capital appreciation.


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15. Investment property (continued)Analysis of Carrying Value by Valuation Technique

2016 2015

€’000 €’000

Estimated disposal price 1,401 1,500

Valuation technique Significant unobservable inputsInter-relationship between key unobservable inputs and fair value measurement

Estimated disposal prices: This method of valuation is used for land held for sale or capital appreciation. The value determined by the directors is based on comparable market transactions after correspondence with independent registered property appraisers in previous years

Ireland

• Comparable market prices UK

• Comparable market prices

The estimated fair value would increase/ (decrease) if:

• Comparable market prices were higher/(lower)

16. Available-for-sale financial assets

Listed

investmentsUnlisted

investments Total

€’000 €’000 €’000

Balance at 1 January 2015 - 3,406 3,406Impairment loss (note 7) - (2,130) (2,130)Currency translation adjustments - 3 3Balance at 31 December 2015 - 1,279 1,279Additions 3,403 - 3,403Currency translation adjustments - (4) (4)Fair value movements 841 - 841Balance at 31 December 2016 4,244 1,275 5,519

The investments included above represent investments in listed and unlisted equity securities. While these investments are classified as available-for-sale financial assets in accordance with IFRSs, it is not currently the intention of management to sell these assets.

Measurement of fair value(i) Listed investmentsThe carrying amount of listed investments held by the Group is its fair value as determined by the directors and as explained below.

Aryzta AGDuring the year, as part of a loan settlement with a third party, the Group received 102,400 shares in the capital of Aryzta AG with a par value of CHF0.02 per share. The valuation at settlement date was €3.4 million. Between the settlement date and year end, the fair value movement in respect of this shareholding resulted in a gain of €0.8 million, recognised in Other Comprehensive Income.

Aryzta AG is listed on the Irish Stock Exchange and the Aryzta AG share price at 30 December 2016 was used for valuation purposes. This is therefore classified as a level 1 fair value and the uplift of €0.8 million between that settlement date and year end was credited to the available-for-sale reserve.


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16. Available-for-sale financial assets (continued)(ii) Unlisted investmentsUnlisted investments include investments in shares and are carried at fair value, the most significant being Pioneer Green Energy LLC amounting to €1.2 million (2015: €1.2 million), and an investment in OpenHydro Limited which was fully impaired in the prior year to €Nil (2015: €Nil).

Valuation Technique and Significant Unobservable InputsThe following table shows the valuation techniques used in measuring the fair value of unlisted investments (fair value Level 3), as well as the significant unobservable inputs used. A market valuation approach and discounted cash flow approach was used in valuing the Group’s unlisted investments.

Analysis of Carrying Value by Valuation TechniqueValuation technique Significant unobservable inputs Inter-relationship between key unobservable inputs

and fair value measurement

Market valuation approach:The approach is based on market-based evidence based on proposed/executed transactions

Value of proposed/executed transactions

Timing of payment of returns to investors

Estimated cash flows discounted by 30%

The estimated fair value would increase/(decrease) if value per share of proposed/executed transactions was higher/(lower)

The estimated fair value would increase/(decrease) if timing of payment returns was sooner/(later)

Discounted cash flows: This valuation model considers the present value of net cash flows to be generated from the investment based on management information provided

The estimated fair value would increase/(decrease) if the expected cash flows from the investment were higher/(lower)

The estimated fair value would increase/(decrease) if the discount rate used was (higher)/lower

During a prior year, the Group reassessed the fair value of its investment in Pioneer Green Energy LLC and this resulted in an uplift of €1.2 million which was credited to the available-for-sale reserve. The reassessment undertaken in the current year resulted in no change to the carrying value. In the prior year, as part of its fair value exercise, management reassessed the value of its investment in OpenHydro Limited and determined that the remaining carrying value of the investment is fully impaired and hence it was written down by €2.1 million to €Nil with the impairment charged to the Income Statement. The impairment was charged to exceptional items in the Income Statement. The reassessment undertaken in the current year resulted in no change to the carrying value.

The following is a reconciliation from the opening balance to the closing balance for Level 3 fair values:

Level 3 fair

values

€’000

Balance at 1 January 2015 3,406Impairment loss (2,130)Exchange adjustments 3Balance at 31 December 2015 1,279Exchange adjustments (4)Balance at 31 December 2016 1,275


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17. Business combinationsBusiness combinations – 2016(i) Encore Industries IncOn 3 November 2016, the Group acquired 100% of the ordinary share capital of Encore Industries Inc., a US injection moulding and thermoforming business headquartered in Ohio, with manufacturing operations in Ohio, Georgia and Minnesota.

In the two months to 31 December 2016, Encore contributed revenue of €5.8 million and EBIT of €0.1 million to the Group’s results. If the acquisition had occurred on 1 January 2016, management estimate that consolidated revenue would have been €474.6 million and consolidated EBITDA for the year would have been €61.4 million.

The acquisition date fair value of the consideration transferred, which was funded by both cash reserves and bank borrowings was €31.6 million (US$35.0 million).

The Group incurred acquisition-related costs of €1.0 million, primarily related to various professional fees incurred. These have been included in exceptional items (note 7).

The following table summarises the recognised amounts of assets acquired and liabilities assumed at the date of acquisition. These remain provisional as at 31 December 2016.

At 3 November

2016

€’000

Property, plant and equipment 18,012Intangible assets 4,413Inventories 6,574Trade and other receivables 5,223Other assets 901Trade and other payables (2,702)Provisions (1,576)Other liabilities (342)Deferred tax liability (4,566)Total identifiable net assets acquired 25,937Consideration transferred at date of acquisition – cash 12,879Loans and borrowings acquired 18,698Total consideration transferred 31,577Goodwill at date of acquisition 5,640

The valuation used for measuring the fair value of materials assets acquired were as follows:


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17. Business combinations (continued)Assets acquired Valuation technique

Property, plant and equipment

Land Market approach: The valuation model considers the market value of the land at the date of acquisition. The value of the asset was calculated based on the market price of an asset of comparable features like location and size. The value of the land was assessed by analysing asking prices and sales prices paid in comparable transactions in the respective areas adjusting the derived values for differences between comparable property and subject property like location, zoning, size, market condition, etc and applied the adjusted unit price to the property.

Buildings Income approach: The principle behind the income approach is that the value of the asset is equal to the earnings potential of this asset i.e. the present value of rental savings attributable to owning the asset. The direct capitalisation method was applied as it is a widely used and simple approach to apply. Market rents per unit of space and yields were utilised for each building taking into consideration its specific usage, type of construction and condition. The derivation of market rents was based on local real estate market research and experiences in the market of industrial properties. The overall condition of the buildings was also taken into account.

Machinery and equipment, fixtures and fittings, computer equipment and motor vehicles

Depreciated replacement cost (“DRC”) approach (Trending method): The principle behind the DRC approach is that a prudent investor will not purchase an asset for more than it will cost him/her to replace this asset with an asset of comparable utility. The valuation process involved a number of steps being; determining the replacement cost followed by an adjustment for additional functional/economic obsolescence. The useful life and effective age was then calculated and depreciated over its new economic life to reflect obsolescence related to effective age. The estimate of the minimum value was then calculated, based on quotation prices or experience from past project costs.

Intangible Assets

Customer relationships Excess earnings approach: This is a form of the income approach which is described in detail above at buildings. Revenue and EBITDA margins are forecasted and discounted over the assumed life of the relationships.

Inventories Market comparison technique: The fair value is determined based on estimated selling price in the ordinary course of business less the estimated cost of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.

An assessment of the provisional fair values of liabilities acquired was undertaken. The fair value adjustments related to the deferred tax liability arising on the property, plant and equipment and certain intangible assets acquired and an environmental provision.

The goodwill is attributable mainly to supply chain and labour efficiency, the skills and technical talents of the Encore workforce, management knowledge and the market footprint expansion. None of the goodwill recognised is expected to be deductible for tax purposes.


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17. Business combinations (continued)(ii) H&T Labour and Vacuumation Services Limited (“H&T”)On 31 January 2016, the Group acquired 100% of the share capital of H&T Labour and Vacuumation Services Limited (“H&T”), a UK based operator in the Hazardous Waste and Specialist Industrial Services sector. H&T is part of the SES disposal group, classified as held-for-sale at year end.

H&T provides a range of specialist industrial cleaning and waste management services to UK industry.

The acquisition date fair value of the consideration transferred, which was funded by bank borrowings, was €4.7 million (Stg£3.6 million).

The Group incurred acquisition-related costs of €0.1 million primarily related to professional fees incurred in relation to the acquisition. These have been included in exceptional items (see note 7). The following table summarises the amounts of assets acquired and liabilities assumed at the date of acquisition:

At 31 January

2016

€’000

Property, plant and equipment 1,632Intangible assets 1,219Inventories 75Trade and other receivables 1,561Trade and other payables (910)Deferred tax liability (478)Total identifiable net assets acquired 3,099Consideration transferred at date of acquisition – cash 3,469Loans and borrowings acquired 1,211Total consideration transferred 4,680Goodwill at date of acquisition 1,581

The valuation techniques used for measuring the fair value of material assets acquired were as follows:

Assets acquired Valuation technique

Property, plant and equipment Market comparison technique and cost technique: The valuation model considers quoted market prices for similar items when they are available and directors’ estimate of the potential disposal proceeds.

Intangible assets - customer relationships Excess earning approach: The principle behind the income approach is that the value of the asset is equal to the earnings potential of this asset. An estimate of Revenue and EBITDA margins are forecasted and discounted over the assumed life of the customer relationships.

The goodwill is attributable mainly to the skills and technical talent of H&T’s work-force and the buyer specific synergies to be achieved from integrating the business into the Group’s existing hazardous waste business. None of the goodwill recognised is expected to be deductible for tax purposes.


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17. Business combinations (continued)(iii) Bale Group Limited (“Bale”)On 20 May 2016, the Group acquired 100% of the business and assets of Bale Group Limited (“Bale”), a UK based operator in the Hazardous Waste and Specialist Industrial Services sector. The business was acquired out of administration. Bale is part of the SES disposal group, classified as held-for-sale at year end.

Bale is a specialist industrial services operator providing a range of transport, waste management, and industrial cleaning solutions to customers in the UK.

The acquisition date fair value of the consideration transferred, which was funded by bank borrowings, was €4.0 million (Stg£3.1 million).

The Group incurred acquisition-related costs of €0.1 million primarily related to professional fees incurred in relation to the acquisition. These have been included in exceptional items (note 7). The following table summarises the amounts of assets acquired and liabilities assumed at the date of acquisition.

At 20 May

2016

€’000

Property, plant and equipment 4,259Intangible assets 1,054Trade and other payables (391)Provision for liabilities (700)Deferred tax liability (211)Total identifiable net assets acquired 4,011Consideration transferred at date of acquisition - cash 2,783Loans and borrowings acquired 1,228Total consideration transferred 4,011Goodwill at date of acquisition -

The valuation techniques used for measuring the fair value of material assets acquired were as follows:


Property, plant and equipment Market comparison technique and cost technique: The valuation model considers quoted market prices for similar items when they are available and directors’ estimate of the potential disposal proceeds.

Intangible assets - customer relationships Excess earning approach: The principle behind the income approach is that the value of the asset is equal to the earnings potential of this asset. An estimate of Revenue and EBITDA margins are forecasted and discounted over the assumed life of the customer relationships.


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17. Business combinations (continued)Business Combinations - 2015(i) IPL Inc.On 23 July 2015, the Group acquired 66.67% of the shares and voting interests in IPL Inc., a Canadian entity specialising in injection moulded plastic products, with operations in Canada and the United States. It should be noted that, while the Group has acquired a 66.67% shareholding in IPL, the anticipated-acquisition method of accounting has been applied in respect of the IPL acquisition on the basis of there being a Put Option in the Shareholders’ Agreement which gives the 33.33% non-controlling interests, the right to Put on One51 plc to acquire their shareholdings at Fair Market Value. The Put becomes exercisable after the sixth anniversary of the acquisition, i.e. from 23 July 2021. There are other events in which the Put also becomes exercisable earlier than the sixth anniversary and these are set out in note 28. The fair value of this Put Liability at the date of acquisition (23 July 2015) was €32.5 million. The reassessment of fair value at 31 December 2016 is outlined in note 28. The acquisition of IPL is considered a key milestone for the Plastics Division in terms of gaining entry to the North American market and to increase knowledge and synergies across the Division.

The acquisition date fair value of the consideration transferred, which was funded by both cash reserves, Canadian bank facilities, subordinated debt from the non-controlling interest parties and the Put Liability outlined above, was €200.6 million (CAD$283.0 million).

The Group incurred acquisition-related costs of €7.1 million, primarily related to various professional fees incurred. These were included in exceptional items in the prior year (note 7).

The following table summarises the recognised amounts of assets acquired and liabilities assumed at the date of acquisition. The fair value of the assets and liabilities acquired were provisional at 31 December 2015. The finalisation of these fair values was completed during the year. The outcome of this process was that goodwill increased by €1.1 million, intangible assets decreased by €0.9 million, payables increased by €0.6 million and deferred tax liabilities decreased by €0.4 million. In addition, certain non-current assets amounted to €4.1 million which had been classified as property, plant and equipment at 31 December 2015, have been reclassified to non-current trade and other receivables. The audited Statement of Financial Position as at 31 December 2015 has been amended to reflect these adjustments.

At 23 July 2015€’000

Property, plant and equipment 88,258Trade and other receivables (non-current) 4,106Intangible assets 37,349Inventories 28,120Trade and other receivables (current) 20,612Prepayments 708Cash and cash equivalents 1,417Tax credit receivable 3,683Capital deposits 2,337Trade and other payables (19,128)Government grants (1,900)Income tax 71Loans and borrowings (708)Deferred tax liability (20,537)Derivative liabilities (71)Deferred revenue (long term) (1,912)Total identifiable net assets acquired 142,405Purchase Consideration 200,554Goodwill 58,149


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17. Business combinations (continued)The valuation techniques used for measuring the fair value of materials assets acquired were as follows:


Property, Plant & Equipment

Land Market approach: The valuation model considers the market value of the land at the date of acquisition. The value of the asset was calculated based on the market price of an asset of comparable features like location and size. The value of the land was assessed by analysing asking prices and sales prices paid in comparable transactions in the respective areas adjusting the derived values for differences between comparable property and subject property like location, zoning, size, market condition, etc and applied the adjusted unit price to the property.

Buildings & Improvements Income approach: The principle behind the income approach is that the value of the asset is equal to the earnings potential of this asset i.e. the present value of rental savings attributable to owning the asset. The direct capitalisation method was applied as it is a widely used and simple approach to apply. Market rents per unit of space and yields were utilised for each building taking into consideration its specific usage, type of construction and condition. The derivation of market rents was based on local real estate market research and experiences in the market of industrial properties. The overall condition of the buildings was also taken into account.

Machinery and equipment, fixtures and fittings, computer equipment and motor vehicles

Depreciated replacement cost (“DRC”) approach (Trending method): The principle behind the DRC approach is that a prudent investor will not purchase an asset for more than it will cost him/her to replace this asset with an asset of comparable utility. The valuation process involved a number of steps being; determining the replacement cost followed by an adjustment for additional functional/economic obsolescence. The useful life and effective age was then calculated and depreciated over its new economic life to reflect obsolescence related to effective age. The estimate of the minimum value was then calculated, based on quotation prices or experience from past project costs.

Assets under construction Book value: The book value was used in calculating the fair value of the assets under construction. The value of these assets was confirmed by whether or not management were confident that the asset under construction account is accurate and complete and also by having discussions and correspondence with the plant’s personnel.

Intangible Assets

Trademarks/trade name Relief-from-royalty income approach: The relief-from-royalty income approach considers the discounted estimated royalty payments that are expected to be avoided as a result of the brand being owned.

Customer contracts and relationships Excess earnings approach: This is a form of the income approach which is described in detail above at buildings and improvements. Revenue and EBITDA margins are forecasted and discounted over the assumed life of the relationships.

Technology and patents Cost less depreciation: The depreciated cost method represents the capitalised cost incurred in developing the technology, less the depreciation charged on these assets to date.


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17. Business combinations (continued)

InventoriesMarket comparison technique: The fair value is determined based on estimated selling price in the ordinary course of business less the estimated cost of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.

The trade receivables comprised gross contractual amounts due of €20.6 million, of which €Nil was expected to be uncollectible at the date of acquisition. No revision to this estimate was required.

Final fair valuesGoodwill arising from the acquisition has been recognised as follows:

At 23 July2015€’000

Cash 64,818Bank borrowings used to fund acquisition 71,395Subordinated debt provided by Non-controlling interests 31,843Put Liability acquired 32,498Fair value of identifiable net assets (142,405)Goodwill 58,149

The goodwill is attributable to supply chain and labour efficiency, the IPL workforce and to market entry and management know-how. None of the goodwill recognised is expected to be deductible for tax purposes.

(ii) Greenway Environmental Services (“GES”)On 18 September 2015, the Group acquired 100% of the business and assets of Greenway Environmental Services Limited (“GES”). GES is part of the SES disposal group, classified as held-for-sale at year end.

GES provides industrial services to the manufacturing and construction sectors in the North West of England. GES, a regional small bolt-on acquisition, was integrated into the Group’s environmental services division (ClearCircle Environmental) thereby further expanding its services offered in the UK.

The acquisition date fair value of the consideration transferred, which was funded by cash reserves was €1.7 million (Stg£1.2 million).

The Group incurred acquisition-related costs of €0.1 million primarily related to professional fees incurred in relation to the acquisition. These have been included in exceptional items in the prior year (see note 7). The following table summarises the amounts of assets acquired and liabilities assumed at the date of acquisition which now represents final fair values:

At 18 September

2015

€’000

Property, plant and equipment 966Intangible assets 347Total identifiable net assets acquired 1,313Consideration transferred at date of acquisition 1,660Goodwill at date of acquisition 347


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17. Business combinations (continued)The valuation techniques used for measuring the fair value of materials assets acquired were as follows:


Property, plant and equipment Market comparison technique and cost technique: The valuation model considers quoted market prices for similar items when they are available, and directors’ estimate of the potential disposal proceeds.

Intangible assets - customer relationships Excess earning approach: The principle behind the income approach is that the value of the asset is equal to the earnings potential of this asset. Revenue and EBITDA margins are forecasted and discounted over the assumed life of the customer relationships.

The goodwill is attributable mainly to the skills and technical talent of GES’s work-force and the buyer specific synergies to be achieved from integrating the business into the Group’s existing hazardous waste business. None of the goodwill recognised is expected to be deductible for tax purposes.

18. Inventories

2016 2015

€’000 €’000

Raw materials and consumables 16,978 14,427Work in progress 143 248Finished goods 21,981 15,753Inventories 39,102 30,428

All inventories are valued at the lower of cost or net realisable value.

A total of €174.8 million (2015: €129.9 million) of inventories was included in the Consolidated Income Statement as an expense in cost of sales. This includes a net income statement charge of €Nil arising on the inventory impairment allowance (2014: charge of €Nil). Inventory impairment allowance levels are continuously reviewed by management and revised where appropriate, taking account of the latest available information on the recoverability of carrying amounts.


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19. Trade and other receivables

2016 2015

€’000 €’000

Non-current Tax credit receivable 4,879 4,106Other receivables 1,104 -

5,983 4,106

CurrentTrade receivables 42,549 60,380Other receivables 2,347 263Prepayments 6,099 5,134Derivative financial instruments 17 -Accrued income - 596VAT – Ireland 1,073 228VAT – Overseas - 1,300

52,085 67,901

Details of impairment provisions netted against the carrying value of trade and other receivables above are set out in note 35.

See note 35 for an analysis of credit risk on trade and other receivables to understand how the Group manages and measures credit quality of trade and other receivables.

20. Cash and cash equivalents

2016 2015

€’000 €’000

Cash and cash equivalents in the statement of financial position and in the statement of cash flows 39,350 25,499


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21. Disposal group held for saleAt 31 December 2016, the Group was in negotiations to sell its SES businesses, consisting of Rilta Environmental Limited, ClearCircle Environmental (NI) Limited and Future Industrial Services Limited, part of the ClearCircle Environmental Division. The Group’s interests in the SES businesses are classified as held-for-sale at year end, as their carrying amounts are to be recovered principally through sales transactions, the assets are available for immediate sale in their present condition and the sale is highly probable. This is based on the fact that the Board had initiated a plan to sell the businesses and negotiations with potential buyers had progressed significantly at 31 December 2016.

(a) Impairment loss relating to the disposal groupOn classification as held-for-sale, a disposal group is measured at the lower of its carrying amount and fair value less costs to sell. Arising from this, an impairment loss of €2.0 million was recognised in respect of one of the SES businesses held for disposal and this has been included within exceptional items (see note 7).

(b) Assets and liabilities of disposal group held for saleAt 31 December 2016, the following were the assets and liabilities were classified as held-for-sale:

2016 2015

€’000 €’000

Property, plant and equipment 29,133 2,418Goodwill and intangible assets 13,577 -Cash and cash equivalents 566 -Inventories 334 -Trade and other receivables 14,108 -Assets held for sale 57,718 2,418

Finance lease obligations 21 -Trade and other payables 10,294 -Deferred tax liabilities (net) 823* -Liabilities directly associated with the assets held for sale 11,138 -

*Includes a deferred tax asset of €255,000 (see note 29).

The 2015 amount related to two properties held-for-sale following the discontinuation of the Metals North UK recycling business during that year. One of these properties was disposed of during the year and the other remains as an asset-held-for-sale, with carrying value of €0.4 million.

(c) Cumulative income or expense included in other comprehensive incomeIncluded in Other Comprehensive Income are cumulative losses equal to €0.8 million at year end (2015: €0.9 million) related to discontinued operations.


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21. Disposal group held for sale (continued)(d) Measurement of fair value At year end, one component of the disposal group was measured at its fair value less cost to sell, as this was less than its carrying value. This is set out below:

€’000 €’000

Carrying value 23,277

Estimated sales proceeds 22,313

Costs to sell (1,084)

Fair value less costs to sell 21,229

Impairment required (2,048)

(e) Fair value hierarchyFair value less costs to sell are based on estimated disposal prices (fair value Level 3), which is based on discussions with independent external advisers and potential purchasers.

(f) Valuation technique and significant unobservable inputs The following table shows the valuation techniques used in measuring the fair value of the disposal group classified as held-for-sale, as well as the significant unobservable inputs used.

Valuation technique Significant unobservable inputs Inter-relationship between key unobservable inputs and fair value measurements

Estimated disposal prices: This method of valuation has been used for the disposal group as a whole that is held-for-sale. The value is based on indicative bids received and after discussion with independent external advisers.

Included in the United Kingdom

• Comparable market prices.

The estimated fair value would increase/(decrease) if:

• Comparable market prices were higher/(lower).

22. Capital and reserves

2016 2015

€’000 €’000

AuthorisedOrdinary Shares of €0.01 each 2,000 2,000

Allotted, called up and fully paidBalance at 1 January 1,570 1,566Ordinary shares issued during the year – 50,375 of €0.01 each (2015: 448,625 of €0.01 each) 1 4Balance at 31 December 1,571 1,570

As at 31 December 2016, 157,088,156 Ordinary Shares (2015: 157,037,781) were in issue.

The nominal value of each of the existing Ordinary Shares at 31 December 2016 is €0.01 (2015: €0.01).


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22. Capital and reserves (continued)Ordinary SharesAll Ordinary Shares rank pari passu regarding any dividends declared on a return of capital in the event of liquidation, dissolution, winding up or other return of capital to shareholders. The holders of Ordinary Shares are entitled to receive notice of, attend, speak and vote at all General Meetings of the Company.

Share premium and reserves

2016 2015

€’000 €’000

Share PremiumBalance at 1 January 88,577 88,518Premium on issued shares 10 59Balance at 31 December 88,587 88,577

ReservesTranslation reserve (5,759) 6,546Share based payment reserve 1,157 708Available-for-sale reserve 2,081 1,240Treasury share reserve (1,303) (1,303)Convertible loan note reserve 78 78Other reserves (39,689) (1,925)Total (43,435) 5,344

Translation reserveThe translation reserve comprises all foreign exchange differences arising from the translation of the net assets of the Group’s non-euro denominated operations, including the translation of the profits and losses of such operations from the average exchange rate for the year to the exchange rate at the reporting date, as well as from the translation of borrowings designated as a hedge of those net assets.

Share based payment reserveThis reserve comprises amounts credited to reserves in connection with equity awards less the effect of any exercises of such awards.

Available-for-sale reserveThe available-for-sale reserve relates to surpluses arising on revaluations of available-for-sale financial assets. This reserve is not distributable to shareholders under Irish company law.

Treasury share reserveThis reserve comprises amounts debited to reserves in connection with the Group purchasing the Company’s equity share capital. The number of Ordinary Shares held as treasury shares at 31 December 2016 is 434,286 (2015: 434,286).


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22. Capital and reserves (continued)Convertible Loan Notes reserve This reserve comprises the equity element of those Convertible Loan Notes issued on 13 January 2006 that have not yet converted at year end. At 31 December 2016, unconverted CLNs amount to 149,991 (2015: 149,991). At 31 December 2016, the balance on the reserve is €78,000 (2015: €78,000).

Other reservesThis reserve relates to fair value movements in the Put Liability relating to the 33.33% of IPL Inc. not owned by the Group. The basis for this accounting is set out in notes 17 and 28. The increase in fair value of the Put Liability during the year amounted to €37.8 million (2015: €1.9 million).

Translation reserve

Shared based

payment reserve

Available-for-sale reserve

Treasury share

reserve

Convertible loan note

reserveOther

Reserves Total

€’000 €’000 €’000 €’000 €’000 €’000 €’000

Balance at 1 January 2016 6,546 708 1,240 (1,303) 78 (1,925) 5,344Equity-settled share based payments – charge for year - 456 - - - - 456Translation differences (10,189) - - - - - (10,189)Increase in fair value of Put liability relating to subsidiary undertaking - - - - - (37,764) (37,764)Translation movement in respect of Put liability relating to subsidiary undertaking (2,116) - - - - - (2,116)Increase in fair value of available-for-sale assets - - 841 - - - 841Reclassification from share based payment reserve to retained earnings – forfeited options - (3) - - - - (3)Reclassification to retained earnings – exercise of share options - (4) - - - - (4)Balance at 31 December 2016 (5,759) 1,157 2,081 (1,303) 78 (39,689) (43,435)

Balance at 1 January 2015 3,833 3,279 1,240 (1,303) 78 - 7,127Equity-settled share based payments – charge for year - 364 - - - - 364Translation differences (67) - - - - - (67)Translation reserve reclassification to Income Statement on discontinued operations 707 - - - - - 707Increase in fair value of Put liability relating to acquired subsidiary undertaking - - - - - (1,925) (1,925)Translation movement in respect of Put liability relating to acquired subsidiary undertaking 2,073 - - - - - 2,073Reclassification from share based payment reserve to retained earnings – lapsed options - (2,902) - - - - (2,902)Reclassification to retained earnings – exercise of share options - (33) - - - - (33)Balance at 31 December 2015 6,546 708 1,240 (1,303) 78 (1,925) 5,344


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23. Loans and borrowings

2016 2015

€’000 €’000

Non currentBank loans 145,373 103,179Subordinated term borrowings from NCI’s (note 36) 30,024 29,092Total non-current loans and borrowings 175,397 132,271

CurrentBank loans 11,422 9,756Subordinated term borrowings from NCI’s (note 36) 1,075 -Finance lease liabilities - 7Total current loans and borrowings 12,497 9,763

The Group is primarily funded by committed bank facilities.

Bank Facilities are provided by separate Irish and Canadian banking syndicates. The Irish banking syndicate has provided €92.0 million of committed funding with significant uncommitted funding including an invoice discounting facility of €15.0 million which was entered into in November 2015. The Irish Banking syndicate committed facilities are due to mature in December 2020. On the acquisition of IPL in July 2015, the Group entered into a credit agreement with a syndicate of Canadian banks. During 2016, prior to the acquisition of Encore, this facility was further renegotiated and increased. The credit agreement provides for committed facilities of CAD$203.4 million (€143.4 million), with CAD$148.4 million (€104.6 million) provided by way of term loan (including a USD$33.5 million term loan) and CAD$55.0 million (€38.8 million) provided under a revolving facility. This credit agreement expires in July 2020. The Canadian facility is separate to the Group’s Irish facility and is “ring-fenced” to the IPL business.

The Group’s combined committed banking facilities total in excess of €230.0 million (2015: €190.0 million).

The Group’s Irish bank facilities are secured by fixed and floating charges on the assets of Group companies and by cross guarantees between the Company and all subsidiary companies that are borrowers under the facility. These charges exclude any charges over IPL Inc. related assets.

The Group’s Canadian bank facilities are secured by charges on the assets of IPL Inc. and its subsidiary undertakings.

€7.0 million of the subordinated term borrowings are payable to an unrelated entity. The subordinated term borrowings from non-controlling interests are explained in note 36.

The Group’s bank borrowings are denominated in euro, Pound Sterling, US dollar and Canadian dollar. Interest rates for euro, Pound Sterling and US dollar denominated loans are variable and the Group’s Canadian dollar loans are a mix of fixed and variable which are all set at commercial rates and spread over EURIBOR interest rates, US dollar LIBOR, US Dollar Base Rate, Canadian Prime Rate or Canadian Bankers Acceptance for periods between one and three months.


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24. Trade and other payables

2016 2015

€’000 €’000

Non-currentConvertible loan note classed as a financial liability (note 25) 1,622 1,622Accruals 338 232Other payables 2,453 1,337

4,413 3,191

CurrentTrade payables 46,086 42,337Tax and social welfare 4,798 6,005Convertible loan note accrued interest (note 25) 212 212Accruals 22,009 25,993Derivative financial instruments - 467VAT – overseas 677 2,125

73,782 77,139

For information on the Group’s contractual maturity analysis of all liabilities, including trade and other payables, see note 35.

25. Convertible Loan Note liabilitiesPrincipal classed

as equityPrincipal classed

as debtAccrued interest

– debt Total

€’000 €’000 €’000 €’000

Balance at 1 January 2015 78 1,622 412 2,112Interest charged during the year - - 133 133Interest paid during the year - - (333) (333)Balance at 31 December 2015 78 1,622 212 1,912Interest charged during the year - - 133 133Interest paid during the year - - (133) (133)Balance at 31 December 2016 78 1,622 212 1,912


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25. Convertible loan note liabilities (continued)The main terms of the CLNs issued on 13 January 2006 and on 20 July 2006 by the Company are as follows:

1. Convertible Loan Notes issued on 13 January 2006The CLNs issued on 13 January 2006 are convertible into Ordinary Shares at a fixed share price of €3.37.

The Company shall never be required to redeem the CLNs unless a specified event of default has occurred in relation to the Company. Payment of any principal and interest in respect of the CLNs is subordinated to all monies owing in respect of bank debt. Interest accrues on the principal amount outstanding on the CLNs at a rate of 4.0% per annum and is payable on an annual basis in arrears.

Following the fifth anniversary of the issue of the CLNs each noteholder is now entitled to convert not less than 50% of the CLNs (including accrued but unpaid interest) into Ordinary Shares during the following periods:

(a) A period of 14 working days following notification by the Company that it intends to redeem the CLNs.

(b) On an annual basis, a period of 10 working days following the earlier of (i) the announcement of the annual results or (ii) the publication of the audited accounts of the Company.

If a noteholder did not elect to convert a minimum of 50% of his CLNs into Ordinary Shares within 60 days of the fifth anniversary of the issue of the CLNs, which has now passed, the Company is entitled to redeem the CLNs held by that noteholder at any time thereafter.

As at 31 December 2016, 149,991 (2015: 149,991) of the 13 January 2006 CLNs have not been converted. During the year, and under the terms of the offer made to the holders of CLNs, the Group repurchased Nil (2015: Nil) CLNs.

2. Convertible Loan Notes issued on 20 July 2006 The CLNs issued on 20 July 2006 were convertible into Ordinary Shares in the Company at a fixed share price of €4.00 until 30 April 2011. To the extent that a noteholder has not converted all his CLNs then from 20 April 2011 onward the Company will have the option to redeem the CLNs for cash at its absolute discretion. In 2011, €6.3 million that was held in equity relating to the CLNs issued on 20 July 2006 were reclassified to the retained earnings as the conversion date for these instruments had passed.

The Company shall never be required to redeem the CLNs unless a specified event of default has occurred in relation to the Company. Payment of any principal and interest in respect of the CLNs is subordinated to all monies owing in respect of bank debt. Interest accrues on the principal amount outstanding on the CLNs at a rate of 4.0% per annum and is payable on an annual basis in arrears.

As at 31 December 2016, 3,185,000 (2015: 3,185,000) of the 20 July 2006 CLNs have not been converted.

26. Government grants deferred

2016 2015

€’000 €’000

Balance at 1 January 1,950 -Acquisition through business combinations (note 17) - 1,900Additions 723 175Amortisation in the year (529) (78)Currency translation adjustments 107 (47)Balance at 31 December 2,251 1,950Classified as non-current liabilities 1,918 1,763Classified as current liabilities 333 187


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27. Provisions

Group Total

€’000

Balance at 31 December 2015 1,766Utilised during the year (579)Disposal of subsidiary undertakings (297)Currency translation adjustments (100)Balance at 31 December 2016 790Classified as non-current liabilities 496Classified as current liabilities 294

The Group’s provisions at 31 December 2016 primarily relate to onerous leases.

28. Deferred contingent consideration

2016 2015

€’000 €’000

Balance at 1 January 33,183 1,093Put Liability arising on business combination (note 17) - 32,498Movement in Put liability arising from fair value increase and accretion of interest 37,764 1,925Interest charged to income statement (note 9) 47 70Paid during the year (366) (397)Currency translation adjustments 2,010 (2,006)Balance at 31 December 72,638 33,183Classified as non-current liabilities 72,288 32,826Classified as current liabilities 350 357

The liability for deferred consideration at year end comprises €72.2 million (2015: €32.4 million) included within non-current liabilities in respect of IPL Inc. and €0.4 million (2015: €0.8 million) relating to Straight plc, €0.3 million (2015: €0.4 million) of which is included in current liabilities and €0.1 million (2015: €0.4 million) included in non-current liabilities.


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28. Deferred contingent consideration (continued)

IPL Inc.On 23 July 2015, the Group acquired its 66.67% controlling interest in IPL Inc.

While the Group acquired a 66.67% shareholding, the anticipated acquisition method of accounting was applied in respect of the acquisition on the basis of there being a Put Option in the Shareholders’ Agreement which gives the non-controlling interests (“NCI’s”) the option to Put their shares on the Group for acquisition commencing six years after the date of acquisition, i.e. put option is exercisable from 23 July 2021. There are other events in which the Group has a Call right which becomes exercisable prior to that date and these events include an initial public offering, whether on a treasury or secondary basis, resulting in a recognised stock exchange listing of equity of One51 plc, directly or indirectly, and includes an amalgamation, securities exchange take-over bid or other transaction having a similar result, and an offering of units of an income trust or similar offering where the trust, directly or indirectly owns equity of One51 plc; or any transaction resulting in a change of control of One51 plc. This is referred to in the Shareholders’ Agreement as a “One51 Liquidity Event”.

In the event of a One51 Liquidity Event prior to the sixth anniversary (i.e. 23 July 2021), the Group shall have the right to exercise its Call Right for the aggregate purchase price set out below:

(a) From 23 July 2015 to 22 July 2016, at the Fair Market Value of the Call Shares plus a 12.5% premium;

(b) from 23 July 2016 to 22 July 2017, at the Fair Market Value of the Call Shares plus a 10% premium;

(c) from 23 July 2017 to 22 July 2018, at the Fair Market Value of the Call Shares plus a 7.5% premium;

(d) from 23 July 2018 to 22 July 2019, at the Fair Market Value of the Call Shares plus a 5% premium; and

(e) from 23 July 2019 to 22 July 2021, at the Fair Market Value of the Call Shares plus a 2.5% premium.

The reassessment of fair value at 31 December 2016 valued the Put Liability at CAD$102.5 million / €72.2 million (2015: CAD$48.9 million/€32.4 million).

Due to the application of the anticipated-acquisition method of accounting, a Put Liability is recognised by the Group in non-current liabilities instead of the Group showing the NCI’s share of retained profits/losses or share of equity. While the Group anticipates acquiring the 33.33% not already owned at this time, it currently expects this liability not to be settled until the six year option period has lapsed (i.e. July 2021).

The valuation method applied for the purposes of the reassessment at 31 December 2016 was that of a discounted cash flow model using the Board approved IPL Inc. Budget Plan for 2017, 2018 and 2019 and then applying a steady growth rate of 2% to earnings after that period (i.e. to 2021). The discount rate applied was 10.03% (2015: 10.16%).


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28. Deferred contingent consideration (continued)Sensitivity analysis The valuation is subject to specific assumptions, some of which are judgemental in nature. Due to the judgements applied, a number of sensitivities have been applied to these assumptions, the results of which are set out in the table below:

Sensitivity

Actual Put Liability at 31

December 2016

Sensitised Put Liability at 31

December 2016 Movement Movement

€’m €’m €’m %

1 (a) Discount rate increased by 10% 72.2 60.0 (12.2) (16.9%)1 (b) Discount rate decreased by 10% 72.2 87.8 15.6 21.7%2 (a) Net debt increased by 10% 72.2 68.4 (3.8) (5.2%)2 (b) Net debt decreased by 10% 72.2 76.0 3.8 5.3%3 (a) EBITDA in terminal value increased by 10% 72.2 80.6 8.4 11.7%3 (b) EBITDA in terminal value decreased by 10% 72.2 63.8 (8.4) (11.7%)4 (a) Growth rate in terminal value increased by 1% to 3% 72.2 87.0 14.8 20.5%4 (b) Growth rate in terminal value decreased by 1% to 1% 72.2 60.7 (11.5) (16.0%)5 (a) As terminal value Revenue increases by 2%, working capital increases by 10% of the 2% growth 72.2 70.1 (2.1) (2.9%) 5 (b) As terminal value Revenue increases by 2%, working capital decreases by 10% of the 2% growth 72.2 74.3 2.1 2.9%

Straight plcThe liability for deferred consideration represents the present value of the monthly payment plan pursuant to an agreement that the Group’s acquired entity, Straight plc, entered into with the vendors of Dyro Holdings Limited in February 2013. The total net present value at 31 December 2016 is €0.4 million (2015: €0.8 million) split €0.3 million (2015: €0.4 million) due within one year and €0.1 million (2015: €0.4 million) due in greater than one year, respectively. Payments are due to continue until February 2018.

29. Deferred taxAssets

2016Liabilities

2016Net

2016Assets

2015Liabilities

2015Net

2015

€’000 €’000 €’000 €’000 €’000 €’000

Property, plant and equipment 27 (21,706) (21,679) 155 (16,851) (16,696)Other timing differences 3,846 (1,421) 2,425 769 (1,347) (578)Intangible assets - (10,526) (10,526) - (8,486) (8,486)Losses forward 1,370 - 1,370 4,887 - 4,887Total 5,243 (33,653) (28,410) 5,811 (26,684) (20,873)

Amounts shown above exclude amounts relating to disposal groups.

The Group has an unrecognised deferred tax asset of €23.0 million (2015: €27.6 million) arising on trading losses, share options, capital losses and property, plant and equipment at 31 December 2016.


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29. Deferred tax (continued)Movement in deferred tax balances


2016 Net balance at 1 January

Recognised in profit or

lossForeign

exchange

Acquired in business

combinations Net Deferred tax

assetsDeferred tax

liabilities

€’000 €’000 €’000 €’000 €’000 €’000 €’000

Property plant and equipment (16,696) (319) (609) (4,055) (21,679) 27 (21,706)Losses forward 4,887 (2,423) (1,148) 54 1,370 1,370 -Other timing differences (578) 787 1,179 1,037 2,425 3,846 (1,421)Intangible assets (8,486) 334 (772) (1,602) (10,526) - (10,526)Tax assets/(liabilities) (20,873) (1,621) (1,350) (4,566) (28,410) 5,243 (33,653)

Discontinued operations



lossForeign

exchange



assetsDeferred tax

liabilities

€’000 €’000 €’000 €’000 €’000 €’000 €’000

Property plant and equipment - (487) (155) - (642) - (642)Losses forward - 266 (11) - 255 255 -Other timing differences - (20) (46) - (66) - (66)Intangible assets - - 319 (689) (370) - (370)Tax assets/(liabilities) - (241) 107 (689) (823) 255 (1,078)Total assets/(liabilities) (20,873) (1,862) (1,243) (5,255) (29,233) 5,498 (34,731)




loss Foreign

exchange



assetsDeferred tax

liabilities

€’000 €’000 €’000 €’000 €’000 €’000 €’000

Property plant and equipment (975) (209) 404 (15,916) (16,696) 155 (16,851)Losses forward 966 (761) (250) 4,932 4,887 4,887 -Other timing differences (475) (111) 31 (23) (578) 769 (1,347)Intangible assets (193) 679 608 (9,580) (8,486) - (8,486)Tax assets/(liabilities) (677) (402) 793 (20,587) (20,873) 5,811 (26,684)

Discontinued operations

2015Net balance at 1 January


loss Foreign

exchange



assetsDeferred tax

liabilities

€’000 €’000 €’000 €’000 €’000 €’000 €’000

Property plant and equipment - - - - - - -Losses forward - - - - - - -Other items - - - - - - -Tax assets/(liabilities) - - - - - - -Total assets/(liabilities) (677) (402) 793 (20,587) (20,873) 5,811 (26,684)


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30. Employee benefitsDefined contribution pension schemesThe Group operates a number of defined contribution pension schemes in the jurisdictions in which it operates. The pension cost charge for the year represents contributions payable by the Group to the schemes and amounted to €1.2 million (2015: €1.4 million). €0.8 million (2015: €1.0 million) relates to continuing operations.

At 31 December 2016, contributions amounting to €0.09 million (2015: €0.01 million) were payable to the scheme, and are included in accruals.

31. Share-based payment arrangementsAt 31 December 2016, the Group had the following active equity-settled share-based payment arrangements:

• One51 Group Share Option Scheme 2006

• The One Fifty One plc 2014 Share Option Scheme

The general terms and conditions applicable to the payment arrangements listed above that were active in the current or prior years are addressed below. In October 2014, the One Fifty One plc 2014 Share Option Scheme was implemented following shareholder approval at the EGM of the Company held on 17 September 2014. The maximum percentage of share capital which could be issued under the scheme is limited, so that, over a period of 10 years, the aggregate number of shares issuable under options granted under the scheme (and any other share scheme operated by the Company) could not exceed 10% of the issued ordinary share capital of the Company.

The equity instruments granted to the Group’s employees under the equity settled schemes are equity settled share based payments as defined in IFRS 2 Share Based Payments. The IFRS requires that a recognised valuation methodology be employed to determine the fair value of equity instruments granted and stipulates that this methodology should be consistent with the methodologies used for the pricing of financial instruments.

Details of the options granted under these schemes are as follows:

One51 Group Share Option Scheme 2006 and the One Fifty One plc 2014 Share Option Scheme

Date of grantNumber of

options Vesting periodWeighted grant

priceAverage fair

value

Income statement

expense 2016

Income statement

expense 2015

December 2012 4,995,994 0.7 years €0.20 €0.072 - -January 2013 247,000 0.7 years €0.20 €0.072 - -October 2014 6,075,000 3 years €0.90 €0.18 €0.37m €0.37mJuly 2016 1,477,250 3 years €1.68 €0.41 €0.1m n/a


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31. Share-based payment arrangements (continued)2016 grants under The One Fifty One plc 2014 Share Option SchemeIn 2016, the Group granted employees options over Ordinary Shares in One Fifty One plc under The One Fifty One plc 2014 Share Option Scheme which may be exercisable upon the attainment of specified performance targets and service criteria. Regarding specified performance targets, the options granted in 2016 are exercisable on the satisfaction of both a Free Cash Flow Ratio (“FCFR”) performance condition and an EPS performance condition. FCFR in this context means Free Cash Flow before Growth Capital Expenditure as a percentage of EBITDA. Free Cash Flow before Growth Capital Expenditure means EBITDA adjusted to take account of interest, tax, maintenance capital expenditure, working capital cash-flows and dividends received.

Up to 50% of the shares subject to an option shall vest according to the FCFR Performance Condition. The extent to which the FCFR Performance Condition is satisfied shall be determined by reference to the Group’s FCFR over a three year Performance Period starting on the first day of the Accounting Period (1 January) in which the award date occurs, determined in accordance with the table below:

Average Annual FCFRProportion of the total option award vesting (subject to satisfaction of the minimum Vesting target under the FCFR Performance Condition)

Below 40% 0%40% 25%Between 40% and 75% 25% - 50% pro rata75% and above 50%



Below 5 percentage points 0%5 percentage points 25%Between 5 and 7.5 percentage points 25% - 37.5% pro rataBetween 7.5 and 10 percentage points 37.5% - 50% pro rata10 percentage points or more 50%



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31. Share-based payment arrangements (continued)2014 grants under the One Fifty One plc 2014 Share Option SchemeUp to 50% of the shares subject to an Option shall vest according to the share price Performance Condition. The extent to which the share price Performance Condition is satisfied shall be determined by reference to the cumulative compound growth in the price of a share over the Performance Period in accordance with the following table:

Cumulative compound share price growthProportion of the total option award vesting (subject to satisfaction of the minimum Vesting target under the share price Performance Condition)

Below 7.5 percentage points 0%7.5 percentage points 25%Between 7.5 and 11.25 percentage points 25% - 37.5% pro rataBetween 11.25 and 15 percentage points 37.5% - 50% pro rata15 percentage points or more 50%

The growth in a share’s price shall be calculated by reference to the average price of a share over the 30 day period following the announcement date prior to vesting against the price of €0.90 per share.

Up to 50% of the shares subject to an option shall vest according to the earnings per share (“EPS”) Performance Condition. The extent to which the EPS Performance Condition is satisfied shall be determined by reference to the cumulative compound growth in the Company’s EPS during the Performance Period in accordance with the following table:


Below 5 percentage points 0%5 percentage points 25%Between 5 and 7.5 percentage points 25% - 37.5% pro rataBetween 7.5 and 10 percentage points 37.5% - 50% pro rata10 percentage points or more 50%


2012/2013 grants under the One Fifty One Group Share Option Scheme 2006The options granted prior to 2014 were exercisable upon the attainment of specified share price targets which was a 10% increase on the headline share price at the date of grant. There was no time period by which this 10% increase had to be met. The share price targets were attained in 2013 in respect of the 2012 and 2013 grants. The options must be exercised within seven years of the grant date.


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31. Share-based payment arrangements (continued)Other information relevant to share option schemes Options will not vest unless the minimum vesting target is met under each condition. Options will normally vest no earlier than the third anniversary of the grant date. The options must be exercised within seven years of the grant date.

The charge relating to the Group’s Directors is €0.23 million (2015: €0.16 million).

The measurement requirements of IFRS 2 have been applied to options granted under this scheme. The fair value of the options granted under the scheme was determined using the following assumptions:

2016 issue 2014 issue2012 / 2013

issue

Weighted average exercise price €1.68 €0.90 €0.20Expected volatility 25% 25% 40%Contractual life 7 years 7 years 7 yearsExpected dividend yield 0% 0% 0%Risk free interest rate 0.3% 0.3% 0.3%Expected rate of forfeitures 10% 10% 10%Minimum gain for voluntary early exercise 100% 100% 100%Rate of voluntary early exercise at minimum gain 50% 50% 50%

At 31 December 2016, 11,263,370 (2015: 9,878,745) options over Ordinary Shares were outstanding. Subsequent to the year end, no options over Ordinary Shares were forfeited. At 31 December 2016, 3,711,120 options have vested (2015: 3,803,745).

Options outstanding at 1 January 2015 10,327,370

Share options exercised (448,625)

Options outstanding at 31 December 2015 9,878,745Issued – 20 July 2016 1,477,250 Share options forfeited (42,250)Share options exercised (50,375)

Options outstanding at 31 December 2016 11,263,370

Of the total outstanding options, 3,711,120 relate to the 2012/2013 issue, exercisable at a price of €0.20 (2015: 3,803,745 related to 2012/2013 issue exercisable at a price of €0.20), 6,075,000 relate to the 2014 issue exercisable at a price of €0.90 (2015: 6,075,000 related to 2014 issue exercisable at a price of €0.90) and 1,477,250 relate to the 2016 issue exercisable at a price of €1.68 (2015: n/a).

The One Fifty One Long Term Cash Settled Bonus SchemeThe Group also operates a long term cash settled bonus scheme, which is accounted for as a cash-settled scheme under IFRS 2. The scheme provides for cash awards on the satisfaction of both a share price performance condition and an earnings per share performance condition, with vesting of up 50% of the award determined by reference to the cumulative compound growth in the price of a share over a minimum of a three year performance period, and up to 50% of the award determined by reference to the cumulative compound growth in the Company’s earnings per share during that period. 1,195,000 awards were issued in October 2014 at a base price of €0.90. These awards are subject to the same performance conditions as those awarded under the One51 Group Share Option Scheme 2014.


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31. Share-based payment arrangements (continued)Awards will not vest unless the minimum vesting target is met under each condition. Awards will normally vest no earlier than the third anniversary of the grant date. Awards lapse if not exercised within ninety days of the vesting date. During the prior year, 200,000 awards were forfeited and during the current year, a further 50,000 awards were forfeited. The amount of awards outstanding at 31 December 2016 was 945,000 (2015: 995,000). At 31 December 2016, a reassessment of fair value of these options was undertaken and there was no change in the fair value per option of €0.736 from that at 31 December 2015.

The Group has taken a total charge of €0.24 million (2015: €0.27 million) in the financial year in relation to this scheme.

One51 Deferred Convertible Share Plan 2007During the prior year, an amount of €2.9 million which had been included in the Share Based Payment Reserve in respect of the inactive One51 Deferred Convertible Share Plan 2007 was reclassified to Retained Earnings as these could no longer be converted to ordinary shares.

32. Cash generated from operations

Note 2016 2015

€’000 €’000

Profit for the year 16,057 18,399

Adjustments for:- Depreciation 13 21,147 14,549

- Exchange differences (1,850) (1,382)- Amortisation of intangibles 14 3,148 1,309- Amortisation of government grants 26 (529) (78)- Impairment losses on property, plant and equipment 13 157 3,004- Impairment losses on intangible assets 14 - 257- Impairment losses on available-for-sale financial assets 16 - 2,130- Finance costs 9 8,875 5,684- Share of profit of equity-accounted investees 8 (3,933) (24,260)

- (Gain)/loss on sale of property, plant and equipment (2) 25- Gain on settlement of third party loan 7 (4,004) -- Gain on sale of equity-accounted investees 7 - (6,638)- Loss on disposal/discontinued subsidiary undertakings 5,251 6,960

- Movement on derivative financial instruments (483) 332- Equity-settled share-based payment transactions 31 456 364- Tax expense 10 3,765 2,714

- Tax paid (4,354) (2,731)

- Onerous lease costs (114) 1,247- Manufacturing profit in inventory acquired adjustment 4 259 1,126

- Acquisition, aborted acquisition and related costs 2,607 8,199

Net cash flows from operating activities before working capital movements 46,453 31,210

Changes in:

- Inventories (5,020) 11,608

- Trade and other receivables 6,697 (7,932)

- Trade and other payables and provisions 7,387 (1,199)

Total movements in working capital 9,064 2,477

Net cash flows from operating activities 55,517 33,687


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33. Key operating subsidiaries Below is the list of significant subsidiaries. The principal areas of operations are the countries of incorporation.

Name Registered office Country of incorporation

Proportion held by: Company/subsidiary Principal activity

One Fifty One Capital Ltd * i Ireland 100% Investment CompanyOne51 Holdings Ltd* i Ireland 100% Intermediate Holding CompanyOne51 ES Plastics Ltd i Ireland 100% Manufacturer of Plastic ProductsOne51 ES Plastics (UK) Ltd ii United Kingdom 100% Manufacturer of Plastic ProductsStraight Ltd iii United Kingdom 100% Manufacturer of Plastic Products Protech Performance Plastics iv China 100% Manufacturer of Plastic ProductsIPL Inc. v Canada 66.67% Manufacturer of Plastic ProductsEncore Industries, Inc. vi United States 66.67% Manufacturer of Plastic ProductsAmpthill Metal Company Ltd vii United Kingdom 100% Metal RecyclingFuture Industrial Services Ltd ii United Kingdom 100% Recycling and TreatmentRilta Environmental Ltd i Ireland 100% Recycling and TreatmentClearCircle Environmental (NI) Ltd ii United Kingdom 100% Recycling

(i) Registered Office is Huguenot House, 35-38 St. Stephen’s Green, Dublin 2.

(ii) Registered Office is Future Industrial Services Ltd, Image Business Park, Acornfield Road, Kirkby, Liverpool, L33 7UF, United Kingdom.

(iii) Registered Office is 1 Whitehall Riverside, Leeds, LS1 4BN, United Kingdom.

(iv) Registered Office is Building K, No. 1688 Zhuan Xing Road, Xin Zhuang Industry Park, Minhang District, Shanghai, China.

(v) Registered Office is 4000-1155 boul, René-Lévesque O, Montréal (Québec), H3B 3V2, Canada

(vi) Registered Office is 319 Howard Drive, Sandusky, Ohio 44870, United States

(vii) Registered Office is Ampthill Metal Company Ltd, Station Road Industrial Estate, Ampthill, Bedford, MK45 2QY, United Kingdom.

* Held directly by Company. All other subsidiaries included in the table above are held indirectly.

A full list of subsidiaries will be filed with the relevant Registrar of Companies.

34. Commitments(a) Capital commitments Future capital expenditure approved by the directors but not provided for in these financial statements is as follows:

2016 2015

€’000 €’000

Contracted 16,732 11,400Authorised but not contracted 34,878 10,658Total 51,610 22,058

The amounts above include amounts for disposal groups classified as held-for-sale. Prior year comparative amounts have been presented on a consistent basis. At 31 December 2016, contracted future capital expenditure includes an amount of €0.5 million (2015: €2.0 million) attributable to discontinued operations. At 31 December 2016, authorised but not contracted capital expenditure includes €1.3 million (2015: €0.7 million) attributable to discontinued operations.


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34. Commitments (continued)(b) Leases as lessee The Group has entered into a number of leases in respect of properties from which certain businesses operate. The expiry dates of these leases range from 3 years to 25 years.

Annual commitments exist under non cancellable operating leases as follows:

(i) Future minimum lease paymentsAt 31 December, the future minimum lease payments under non-cancellable leases were payable as follows:

2016 2015

€’000 €’000

Less than one year 4,694 4,327Between one and five years 11,193 9,433More than five years 7,358 4,514Total 23,245 18,274

The amounts above include amounts for disposal groups classified as held-for-sale. Prior year comparative amounts have been presented on a consistent basis. At 31 December 2016, €6.2 million (2015: €7.9 million) of the total future minimum lease payments is attributable to discontinued operations.

(ii) Amounts recognised in profit or loss

2016 2015

€’000 €’000

Lease expense 4,913 5,662

The amounts above include amounts for disposal groups classified as held-for-sale. Prior year comparative amounts have been presented on a consistent basis. Lease expense for the year ended 31 December 2016 includes €1.4 million (2015: €2.1 million) attributable to discontinued operations.

(c) Leases as lessor(i) Future minimum lease paymentsAt 31 December, the future minimum lease payments under non-cancellable leases are receivable as follows:

2016 2015

€’000 €’000

Less than one year 122 -Between one and five years 480 -More than five years 503 -Total 1,105 -


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34. Commitments (continued)(ii) Amounts recognised in profit or loss

2016 2015

€’000 €’000

Income-generating property 30 20

(d) Contingent liabilities - Funding arrangementsUnder legislative requirements, funding arrangements are required to be put in place for the movement of waste material between jurisdictions. As at 31 December 2016, the Group had such Trans Frontier Shipments bonds in place totalling €1.1 million (2015: €1.1 million). Other bonding arrangements amounted to €0.5 million (2015: €0.8 million).

At 31 December 2016, the Group had Letters of Credit in place amounting to €2.3 million (2015: €0.3 million).

(e) Subsidiary undertakingsAs permitted by Section 357 (1) (6) of the Companies Act 2014, the Company has irrevocably guaranteed the liabilities of certain of its subsidiary undertakings incorporated in the Republic of Ireland.

The Company has also guaranteed the performance of certain contracts entered into by subsidiary companies and has also guaranteed the payment of certain leases entered into by subsidiary companies.

35. Financial risk managementThe following table shows the carrying amounts and fair values of financial assets and liabilities.

2016

Fair value through profit

or lossLoans and

receivables Available-for-

saleLiabilities at

amortised cost Total carrying

amount

Fair value

€’000 €’000 €’000 €’000 €’000 €’000

Available-for-sale financial assets (note 16) - - 5,519 - 5,519 5,519*Trade and other receivables (note 19) - 50,879 - - 50,879 50,879*Derivative financial instruments (note 19) 17 - - - 17 17*Cash and cash equivalents (note 20) - 39,350 - - 39,350 39,350*

17 90,229 5,519 - 95,765 95,765Trade and other payables (note 24) - - - (53,337) (53,337) (53,337)*Bank borrowings (note 23) - - - (156,795) (156,795) (156,795)Subordinated term borrowings (note 23) - - - (31,099) (31,099) (31,099)Deferred contingent consideration (note 28) (72,230)** - - (408) (72,638) (72,638)*Convertible loan note (note 25) - - - (1,622) (1,622) (300)

(72,230) - - (243,261) (315,491) (314,169)


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35. Financial risk management (continued)2015

Fair value through profit

or loss Loans and receivables

Available-for-sale

Liabilities at amortised cost

Total carrying amount

Fair value

€’000 €’000 €’000 €’000 €’000 €’000

Available-for-sale financial assets (note 16) - - 1,279 - 1,279 1,279*Trade and other receivables (note 19) - 64,749 - - 64,749 64,749*Cash and cash equivalents (note 20) - 25,499 - - 25,499 25,499*

- 90,248 1,279 - 91,527 91,527Trade and other payables (note 24) - - - (49,679) (49,679) (49,679)*Bank borrowings (note 23) - - - (112,935) (112,935) (112,935)Subordinated term borrowings (note 23) - - - (29,092) (29,092) (29,092)Derivative financial instruments (note 24) (467) - - - (467) (467)*Finance lease liabilities (note 23) - - - (7) (7) (7)Deferred contingent consideration (note 28) (32,350)** - - (833) (33,183) (33,183)*Convertible loan note (note 25) - - - (1,622) (1,622) (300)

(32,817) - - (194,168) (226,985) (225,663)

* These are valued at fair value or deemed to be carried at an amount equivalent to fair value.

** This is the liability in respect of the Put Option arising from the IPL acquisition. All movements in fair value are accounted for through Equity.

The Group has availed of the exemption under IFRS 7 Financial Instruments: Disclosure for additional disclosures where fair value closely approximates carrying value.

Measurement of Fair ValuesSet out below are the major methods and assumptions used in estimating the fair values of the financial assets and liabilities disclosed in the preceding table.

Available-for-sale financial assetsDetails of fair values are provided in greater detail in note 16.

Cash and cash equivalentsFor cash and cash equivalents, which have a maturity of less than three months, the carrying amount is deemed to reflect fair value.

Trade and other receivables/trade and other payablesFor receivables and payables with a remaining life of less than six months or demand balances, the carrying value less impairment provision, where appropriate, is deemed to reflect fair value.

Derivative financial assets (forward contracts)Forward currency contracts are valued using quotes from third parties on forward exchange rates at the statement of financial position date.

Interest-bearing loans and borrowings including bank overdraftsVariable interest rates are applied on interest-bearing loans and borrowings and accordingly the carrying value is deemed to reflect fair value.


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35. Financial risk management (continued)Finance lease liabilities and deferred contingent consideration Fair value is based on the present value of future cash flows discounted at market rates.

Fair Value HierarchyThe Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique.

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

At 31 December 2016 and 31 December 2015, the Group recognised and measured the following financial instruments at fair value:

2016

Level 1 Level 2 Level 3 Total

Assets measured at fair value €’000 €’000 €’000 €’000

Available-for-saleAvailable-for-sale financial assets 4,244 - 1,275 5,519

At fair value through profit or lossForeign exchange contracts - 17 - 17

Liabilities measured at fair value

At fair value through profit or lossDeferred contingent consideration – Put Liability - - 72,230 72,230

2015

Level 1 Level 2 Level 3 Total

Assets measured at fair value €’000 €’000 €’000 €’000

Available-for-saleAvailable-for-sale financial assets - - 1,279 1,279

Liabilities measured at fair value

At fair value through profit or lossForeign exchange contracts - 467 - 467Deferred contingent considerations – Put Liability - - 32,350 32,350

Level 2 fair values (items at fair value through profit or loss)

Type Valuation technique Significant unobservable inputs Inter-relationship between key unobservable inputs and fair value measurement

Forward exchange contracts

Market comparison techniques: The fair values are based on third party quotes. Similar contracts are traded in an active market and the quotes reflect the actual transactions in similar instruments.

Not applicable Not applicable

Details regarding level 1 to 3 fair values for available-for-sale financial assets are included in note 16.


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35. Financial risk management (continued)Risk ExposuresThe Group’s operations expose it to various financial risks. The Group has a risk management programme in place which seeks to limit the impact of these risks on the financial performance of the Group and it is the policy to manage these risks in a non-speculative manner.

The Group has exposure to the following risks from its use of financial instruments:

• Credit risk

• Liquidity risk

• Market risk

• Equity price risk

This note presents information about the Group’s exposure to each of the above risks and the Group’s objectives, policies and processes for measuring and managing the risk. Further quantitative disclosures are included throughout this note.

Credit riskCredit risk arises from credit to customers arising on outstanding receivables and outstanding transactions as well as cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions. The Group has detailed procedures for monitoring and managing the credit risk related to its trade receivables based on experience, customers’ track record and historic default rates and the Group uses credit insurance where available on reasonable commercial terms. Individual risk limits are generally set by customer and risk is only accepted above such limits in defined circumstances. The utilisation of credit limits is regularly monitored. Cash and short term bank deposits are invested with institutions having considered their credit rating, with limits on amounts held with individual banks or institutions at any one time.

Regarding the Group’s cash and cash equivalents, the credit ratings of the institutions in which cash is deposited was BBB or above at year end based on Standard & Poor’s ratings (2015: BB or above).

The carrying amount of financial assets, net of impairment provisions represents the Group’s maximum credit exposure. The maximum exposure to credit risk at year end was as follows:

Carrying amount

2016

Carrying amount

2015

€’000 €’000

Cash and cash equivalents (note 20) 39,350 25,499Trade and other receivables (note 19) 50,879 64,749

90,229 90,248


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35. Financial risk management (continued)Trade and other receivablesThe Group has detailed procedures for monitoring and managing the credit risk related to its trade and other receivables. Trade and other receivables are monitored by geographic region and by largest customers/counterparties. The maximum exposure to credit risk for trade and other receivables (net of provisions) at the reporting date by geographic region was as follows:

2016 2015

€’000 €’000

Ireland 2,785 8,601UK 13,152 21,780Canada 11,847 17,746USA 19,249 14,820Rest of Europe 66 747Rest of World 3,780 1,055Total 50,879 64,749

Included in the Group’s trade and other receivables are balances of €5.4 million (2015: €9.7 million) which are past due at the reporting date but not impaired. The aged analysis of the Group’s trade and other receivables are as follows:

2016 2015

€’000 €’000

Within credit terms 45,488 55,058Outside of credit terms within 3 months 8,939 14,216Outside of credit terms greater than 3 months 644 1,559Total 55,071 70,833

Trade and other receivables which are not past due nor impaired at the reporting date are expected to be fully recoverable.

The movement in the provision for impairment of trade and other receivables during the year is as follows:

2016 2015

€’000 €’000

Trade and other receivables provision at the start of the year (6,084) (5,547)

MovementAmounts written off during the year 1,259 4,065Decrease/(increase) in provision 633 (4,602)Trade and other receivables provision at the end of the year (4,192) (6,084)


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35. Financial risk management (continued)Liquidity riskLiquidity risk is the risk that the Group will encounter difficulty in meeting its obligations with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to manage liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. Compliance with the Group’s quarterly (IPL facility) and bi-annual (Irish facility) debt covenants is monitored continuously based on the management accounts. Sensitivity analysis using various scenarios is applied to forecasts to assess their impact on covenants and net debt.

The following are the contractual maturities of the financial liabilities:

2016

Carrying amount

Contractual cash flows

6 months or less 6-12 months 1-2 years 2-5 years >5 years

€000 €000 €000 €000 €000 €000 €000

Bank borrowings (156,795) (184,148) (15,906) (7,114) (15,914) (145,149) (65)Subordinated term borrowings (31,099) (46,009) (1,586) (2,760) (5,342) (16,359) (19,962)CLN principal (1,622) (2,287) (133) - (133) (399) (1,622)Deferred contingent consideration (72,638) (112,079) (153) (153) (102) (111,671) -Trade and other payables (53,337) (53,337) (52,739) (292) (306) - -Total (315,491) (397,860) (70,517) (10,319) (21,797) (273,578) (21,649)

2015 Carrying

amount Contractual

cash flows 6 months or

less 6-12 months 1-2 years 2-5 years >5 years

€000 €000 €000 €000 €000 €000 €000

Bank borrowings (112,935) (132,711) (4,380) (5,635) (10,954) (111,587) (155)Subordinated term borrowings (29,092) (43,835) (1,488) (1,488) (4,079) (15,420) (21,360)CLN principal (1,622) (2,287) (133) - (133) (399) (1,622)Finance lease liabilities (7) (7) (7) - - - -Deferred contingent consideration (33,183) (53,402) (178) (179) (475) - (52,570)Trade and other payables (49,679) (49,679) (46,386) (2,498) (795) - -Total (226,518) (281,921) (52,572) (9,800) (16,436) (127,406) (75,707)

Market riskMarket risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income or the value of its holdings of financial instruments. The objective of the Group’s risk management strategy is to manage and control market risk exposures within acceptable parameters.

Currency riskForeign exchange risk arises from foreign currency transactions, assets and liabilities. Management requires all Group operations to manage their foreign exchange risk against their functional currency. These currency risks are monitored on a daily basis and managed by utilising forward foreign currency contracts. The vast majority of transactions entered into by Group entities are denominated in their functional currencies.


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35. Financial risk management (continued)Exposure to currency riskThe Group’s exposure to transactional foreign currency risk is as follows:

EUR GBP USD RMB CAD Total

€’000 €’000 €’000 €’000 €’000 €’000

2016Trade and other receivables 521 477 6,285 - - 7,283Cash and cash equivalents 313 628 20,201 - 6,754 27,896Bank borrowings (222) (3,355) (15,043) - (6,859) (25,479)Trade and other payables (425) (685) (4,572) - - (5,682)Total 187 (2,935) 6,871 - (105) 4,018

2015Trade and other receivables 912 4,038 18,852 - - 23,802Cash and cash equivalents 523 642 7,001 - - 8,166Bank borrowings - - (916) - - (916)Trade and other payables (4,759) (2,912) (12,327) - - (19,998)Total (3,324) 1,768 12,610 - - 11,054

Sensitivity AnalysisA 5% strengthening or weakening in the euro against Sterling, the Canadian Dollar, the US Dollar or Chinese Renminbi, based on outstanding financial assets and liabilities at 31 December 2016 and 31 December 2015, would have increased/(decreased) other comprehensive income and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

2016

5% strengthening

5% strengthening

5% weakening

5% weakening

Income statement

Other comprehensive

incomeIncome

statement

Other comprehensive

income

€’000 €’000 €’000 €’000

Sterling (147) 1,032 140 (1,083)US Dollar 344 (300) (327) 315CAD Dollar (5) (4,716) 5 4,952Renminbi - (269) - 282

20155%

strengthening5%

strengthening5%

weakening5%

weakening

Income statement

Other comprehensive

incomeIncome

statement

Other comprehensive

income

€’000 €’000 €’000 €’000

Sterling 36 (2,246) (29) 2,540US Dollar (240) - 271 -CAD Dollar - (4,219) - 4,664Renminbi - (158) - 175


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35. Financial risk management (continued)Interest Rate RiskThe Group holds both interest bearing assets and interest bearing liabilities. In general, the approach employed by the Group to manage its interest exposure is to maintain the majority of its cash, short term bank deposits and interest bearing borrowings on fixed and floating rates. Rates are generally fixed for relatively short periods in order to match funding requirements while being able to benefit from opportunities due to movement in longer term rates.

At year end, the interest rate profile of interest-bearing financial instruments was:Carrying amount

2016Carrying amount

2015

€’000 €’000

Fixed rate instrumentsConvertible Loan Notes (1,622) (1,622)Bank borrowings (36,263) (36,835)Subordinated term debt (31,099) (29,092)Finance lease liabilities - (7)Total fixed rate instruments (68,984) (67,556)

Variable rate instrumentsCash and cash equivalents 39,350 25,499Bank borrowings (120,532) (76,100)Total variable rate instruments (81,182) (50,601)Total (150,166) (118,157)

Cash flow sensitivity analysis for variable rate instrumentsAt 31 December 2016, the average interest rate being earned on the Group’s cash and cash equivalents was nil% (2015: nil%). At 31 December 2016, the average interest rate being paid on the Group’s borrowings was 4.29% (2015: 3.36%). The effects of an increase or decrease of 50 basis points in interest rates at the reporting date would have had the following effect on the income statement and other comprehensive income can be seen from the table below. This analysis assumes that all other variables, in particular foreign currency rates, remained constant.

201650 basis point increase 50 basis point increase 50 basis point decrease 50 basis point decreaseIncome statement€’000

Other comprehensive income€’000

Income statement€’000


(406) - 406 -

201550 basis point increase 50 basis point increase 50 basis point decrease 50 basis point decreaseIncome statement€’000


Income statement€’000


(265) - 265 -


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35. Financial risk management (continued)Accounting for derivativesDerivative financial instruments are measured at fair value at inception and at each reporting date, with the movement recognised in the income statement. The fair value of derivatives at the statement of financial position date is set out in the following table:

Assets 2016

Liabilities2016

Assets 2015

Liabilities2015

Derivatives classified at fair value through the income statement €’000 €’000 €’000 €’000

Forward currency contracts 17 - - (467)

The Group also uses foreign currency borrowings to hedge the net investment in foreign entities. The carrying value of borrowings designated as net investment hedges at year end amounts to €Nil (2015: €Nil). The gains or losses on the effective portions of such borrowings are recognised in other comprehensive income. Ineffective portions of the gains and losses on such borrowings are recognised in the income statement although no ineffectiveness has been recognised in the current or prior year.

36. Related partiesThe consolidated financial statements include the financial statements of the Company and subsidiaries as documented in the accounting policies in note 1. A listing of the principal subsidiaries is provided in note 33.

Transactions are entered into under the normal course of business on an arm’s length basis. Sales to and purchases from, together with outstanding payables and receivables to and from subsidiaries are eliminated in the preparation of the consolidated financial statements. IAS 24 Related Party Disclosures requires the disclosure of compensation paid to the Group’s key management personnel (i.e. those persons having authority and responsibility for planning, directing and controlling the activities of the Group). This comprises its Board of Directors which manages the business and affairs of the Group. Details of the Directors of the Company are given on page 6. Director remuneration amounted to:

2016 2015

€’000 €’000

Remuneration (including basic salary and benefits in kind) 786 767Bonus amounts to Executive Directors 428 626Other remuneration including pension contributions 89 107Fees to Non-Executive Directors 278 248Share based payment expense 230 160Total 1,811 1,908

The Report of the Remuneration Committee on Directors’ Remuneration on pages 50 to 54 outlines the remuneration entitlements of the Board of Directors in more detail and also includes details of transactions in relation to share based payments. Their beneficial interests, including family interests, are also given in this report together with Directors’ share options.


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36. Related parties (continued)Transactions with equity-accounted investees Under IAS 24, the Group had a related party relationship with its associate undertaking, Altas Investments plc during the current and prior year.

The following transactions took place during the year between the Group and Altas Investments plc:

• Amounts totalling €32,500 (2015: €55,000) were paid to the Group by Altas for fees relating to Alan Walsh’s membership of that company’s Board of Directors. No amounts were owing at year end (2015: €Nil).

• The Group received €Nil (2015: €51.8 million) from Altas following the redemption of shares in the newly incorporated demerged entity, NTR plc in 2015. This was following the demerger of Altas’ US Wind Energy business to the new NTR plc. Fees owing to Altas by the Group at year end for professional fees incurred by Altas on behalf of the Group in respect to this transaction amounted to €Nil (2015: €28,000).

• During the year, the Group received a dividend of €176,700 (2015: €Nil) from Altas.

Transactions with non-controlling shareholders of subsidiary undertakingsIPL Inc., the Canadian subsidiary undertaking in which the Group has a 66.67% controlling shareholding has drawn down subordinated term debt from its two non-controlling interest parties, Caisse de dépôt et placement du Québec (“CDPQ”) and Fonds de solidarité des travailleurs du Québec (“FSTQ”). CDPQ, a 22.2% shareholder in IPL Inc., has advanced subordinated term debt of CAD$20 million to IPL Inc., while FSTQ, an 11.1% shareholder, has advanced subordinated term debt of CAD$15 million to IPL Inc. The loans accrue interest at 10% per annum and interest is repayable on a monthly basis to each lender in proportion to their lending while the principal amounts become payable from 2017. The interest charge in the year to 31 December 2016 was €2.4 million (2015: €1.0 million). At year end, principal amounts owing to CDPQ was €14.1 million (2015: €13.2 million) while the principal amount owing to FSTQ was €10.6 million (2015: €9.9 million). No interest amounts were outstanding at year end (2015: €Nil). Upon successful completion of the July 2015 IPL Inc. acquisition transaction, success fees in the amounts of €0.3 million and €0.2 million were paid to CDPQ and FSTQ respectively, in that year. No equivalent amounts were paid during 2016.

Both CDPQ and FSTQ have equity investments in IPL Inc. of CAD$20 million and CAD$15 million respectively. As explained in note 28, the anticipated acquisition method has been applied by the Group in respect of the IPL Inc. acquisition meaning that no non-controlling interests are recognised in the Income Statement or Statement of Financial Position. Instead, due to the presence of a Put option in the Shareholders’ Agreement between One51 plc and the non-controlling interest parties, a Put Liability is recognised in non-current liabilities in the statement of financial position. At year end, the fair value of this Put Liability was €72.23 million (2015: €32.35 million), with €48.15 million (2015: €21.6 million) ascribed to CDPQ and €24.08 million (2015: €10.8 million) ascribed to FSTQ.

37. Comparative amountsComparative amounts have been regrouped, where necessary, on the same basis as in the current year.

38. Post balance sheet eventsThere have been no other significant events since year-end affecting the Group which would require disclosure in, or adjustment to, the financial statements.


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2016 2015

Note €’000 €’000

AssetsFinancial fixed assets 39 127,835 127,835

Non-current assets 127,835 127,835Trade and other receivables 40 18,257 19,759Cash and cash equivalents 41 1,256 129

Current assets 19,513 19,888

Total assets 147,348 147,723

Equity

Share capital 1,571 1,570

Share premium 88,587 88,577

Reserves (68) (517)

Retained earnings 43,035 42,376

Total equity 133,125 132,006

LiabilitiesTrade and other payables 42 7,864 8,601

Non-current liabilities 7,864 8,601Trade and other payables 42 6,359 7,116

Current liabilities 6,359 7,116

Total liabilities 14,223 15,717

Total equity and liabilities 147,348 147,723



Company Statement of Financial Position As at 31 December 2016


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Share capitalShare

premium

Share based payment

reserveTreasury

shares


reserveRetained earnings Total

€’000 €’000 €’000 €’000 €’000 €’000 €’000

Balance at 1 January 2016 1,570 88,577 708 (1,303) 78 42,376 132,006

Total comprehensive incomeProfit for the year - - - - - 652 652Total comprehensive income - - - - - 652 652

Contributions and distributions Equity settled share based payments – options lapsed - - (3) - - 3 -Equity settled share based payments – movement in year - - 456 - - - 456Issue of Ordinary Shares – exercise of share options 1 10 (4) - - 4 11Total contributions and distributions 1 10 449 - - 7 467Balance at 31 December 2016 1,571 88,587 1,157 (1,303) 78 43,035 133,125

Company Statement of Changes in EquityFor the years ended 31 December 2016 and 2015

Share capitalShare

premium

Share based payment

reserveTreasury

shares


reserveRetained earnings Total

€’000 €’000 €’000 €’000 €’000 €’000 €’000

Balance at 1 January 2015 1,566 88,518 3,279 (1,303) 78 38,200 130,338

Total comprehensive incomeProfit for the year - - - - - 1,241 1,241Total comprehensive income - - - - - 1,241 1,241

Contributions and distributions Issue of Ordinary Shares - (26) - - - - (26)Equity settled share based payments – movement in year - - 364 - - - 364Issue of Ordinary Shares – exercise of share options 4 85 (33) - - 33 89Reclassification from share based payment reserve to retained earnings – cancellation of deferred convertible shares - - (2,902) - - 2,902 -Total contributions and distributions 4 59 (2,571) - - 2,935 427Balance at 31 December 2015 1,570 88,577 708 (1,303) 78 42,376 132,006

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2016 2015

€’000 €’000

Profit for the year 652 1,241

Adjustments for:- Exchange differences (710) 293- Net finance costs 133 133- Tax credit - (101)- Tax paid (11) (3)- Increase in receivable from subsidiary undertaking (78) (391)- Cash dividend received - (1,171)Net cash flows from operating activities before working capital movements (14) 1

Changes in: - Trade and other receivables 496 373- Trade and other payables 767 47Net cash flows from operating activities 1,249 421

Cash flows from investing activities- Dividends received from subsidiaries - 1,171- Investment in subsidiary - (23,500)Net cash flows used in investing activities - (22,329)

Cash flows from financing activitiesFinance costs paid (133) (333)Issuance of new shares 11 63Net cash used in financing activities (122) (270)Net increase/(decrease) in cash and cash equivalents 1,127 (22,178)Cash and cash equivalents at 1 January 129 22,307Cash and cash equivalents at 31 December 1,256 129

Company Statement of cash flows For the year ended 31 December 2016


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39. Financial fixed assets

Investments in

subsidiariesUnlisted

investments Total

2016 €’000 €’000 €’000

Balance at 1 January and 31 December 2016 127,830 5 127,835

Investments in

subsidiariesUnlisted

investments Total

2015 €’000 €’000 €’000

Opening balance - 1 January 2015 104,708 5 104,713Additional investment in subsidiaries 23,500 - 23,500Increase in share based payment reserve 364 - 364Repayment of capital contribution (742) - (742)Closing balance - 31 December 2015 127,830 5 127,835

The investments included above represent investments in subsidiaries and unlisted equity securities. The principal subsidiaries are set out in note 33. During the prior year, the company increased its investment in ClearCircle Environmental Limited by €23.5 million.

Unlisted investments include investments in shares and are carried at fair value. The valuation technique used to value the fair value of the unlisted investments is set out in note 16.

40. Trade and other receivables

2016 2015

€’000 €’000

CurrentAmounts due from subsidiary undertakings 18,257 19,759

41. Cash and cash equivalents

2016 2015

€’000 €’000

Cash on hand 1,256 129


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42. Trade and other payables

2016 2015

€’000 €’000

Non currentDeferred dividends 6,242 6,979Convertible loan note principal classed as debt (i) 1,622 1,622

7,864 8,601

2016 2015

€’000 €’000

CurrentAmounts due to subsidiary undertakings 6,104 6,881Convertible loan note accrued interest (i) 212 212Other payables 43 23

6,359 7,116

(i) The convertible loan note amounts are unchanged from the consolidated amounts shown in note 25.

43. Related party transactionsThe Company has a related party relationship with its subsidiaries and with the Board of Directors. Details of the remuneration of the Company’s individual Directors, together with their shareholdings and outstanding share options are set out in the Report of the Remuneration Committee on Directors’ Remuneration on pages 50 to 54.

The Company is availing of the exemption in IAS 24 Related Party Disclosures not to disclose transactions with fellow Group companies.

44. Capital commitments and contingenciesThe Company has no capital commitments as at 31 December 2016 (2015: €Nil).

As permitted by Section 357 (1) (6) of the Companies Act 2014, the Company has irrevocably guaranteed the liabilities of certain of its subsidiary undertakings incorporated in the Republic of Ireland.

The Company has guaranteed the performance of certain contracts entered into by subsidiary companies and has also guaranteed the payment of certain leases entered into by subsidiary companies.

The Company has also provided a fixed and floating charge over its assets related to certain bank borrowings of subsidiary undertakings.


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Notes to the Company Financial Statements (continued)

45. Statutory and Other InformationAuditor’s remuneration

2016 2015

€’000 €’000

Audit 10 10Tax advisory work 1 1Directors’ remuneration - -

The Directors’ remuneration is paid by another Group entity (2015: same).

46. Financial instruments and financial risk2016

Loans and receivables

Liabilities at amortised cost

2016€’000

2016€’000

Total €’000

Fair value€’000

Amounts due from subsidiary undertakings 18,257 - 18,257 18,257Cash and cash equivalents 1,256 - 1,256 1,256

19,513 - 19,513 19,513

Non currentTrade and other payables - 7,864 7,864 7,864

CurrentTrade and other payables - 6,359 6,359 6,359

- 14,223 14,223 14,223

2015Loans and

receivablesLiabilities at

amortised cost2015€’000

2015€’000

Total €’000

Fair value €’000

Amounts due from subsidiary undertakings 19,759 - 19,759 19,759Cash and cash equivalents 129 - 129 129

19,888 - 19,888 19,888

Non currentTrade and other payables - 8,601 8,601 8,601

CurrentTrade and other payables - 7,116 7,116 7,116

- 15,717 15,717 15,717

The Company has the same risk exposures as those of the Group as outlined in note 35.

The Group has availed of the exemption under IFRS 13 Fair Value Measurement for additional disclosures where fair value closely approximates carrying value.

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46. Financial instruments and financial risk (continued)Credit riskThe €18,257,000 (2015: €19,759,000) within trade and other receivables on page 140 relates entirely to amounts due from subsidiary undertakings. All amounts are repayable on demand. The €1,256,000 (2015: €129,000) of cash and cash equivalents is managed in accordance with the overall Group credit risk policy as outlined in note 35.

Liquidity riskThe €6,359,000 (2015: €7,116,000) within current trade and other payables are all due for payment within 6 months of the statement of financial position date or on demand in the case of amounts due to subsidiary undertakings.

Currency riskThe majority of financial assets and liabilities are denominated in euro (the functional currency of the Company) and hence there is minimal currency risk present at year end.

47. Comparative amountsCertain adjustments have been made to the comparative amounts due to an intergroup dividend amount which was originally accounted for through the Income Statement, being deferred in the Statement of Financial Position. A consistent approach has also been applied in 2016.

48. Post balance sheet eventsThere have been no significant events since year-end impacting the Company which would require disclosure in, or adjustment to, the financial statements.

49. Approval of financial statementsThe Directors approved these financial statements on 16 March 2017.


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Investor Relations EnquiriesFor investor relations enquiries, please contact Pat Dalton or Robert Burns:

Pat DaltonChief Financial OfficerT: +353 (0)1 612 1377

Robert BurnsGroup Head of Corporate DevelopmentT: +353 (0)1 612 1377

Alternatively write to:Investor Relations One Fifty One plcHuguenot House35-38 St Stephen’s GreenDublin 2Ireland

Information for Shareholders

Share Price and Related ServicesIn October 2007, a ‘grey’ market was established to allow shareholders to trade their investment in One51. This market allows existing shareholders to realise value and provides prospective investors with an opportunity to share in One51’s future success.

The market price of the shares at 31 December 2016 was €1.35 and the range during the year was €1.35 to €1.80.

The following stockbrokers currently administer One Fifty One plc’s ‘grey’ market:

DavyDavy House49 Dawson StreetDublin 2Ireland+353 (0)1 679 7788Email: [email protected]

InvestecThe Harcourt Building Harcourt StreetDublin 2Ireland+353 (0)1 421 0000Email: [email protected] GoodbodyBallsbridge ParkBallsbridgeDublin 4Ireland1850 64 74 84/+353 (0) 1 641 0432Email: [email protected]

Merrion Capital Group (Dublin)Heritage House23 St Stephen’s GreenDublin 2Ireland+353 (0)1 240 4100Email: [email protected]

Cantor Fitzgerald75 St. Stephen’s GreenDublin 2Ireland+353 (0)1 6333 633Email: [email protected]

142

Shareholding Enquiry ServicesOne Fifty One plc in connection with its Registrars, Computershare, offers a shareholding enquiry service to its shareholders. This allows shareholders to:

• Check details of their One Fifty One plc shareholdings

• Receive forms in order to notify the Registrar of a change in personal details, for example, address, amalgamation of separate accounts etc.

As a security measure you will be asked for your “Shareholder Reference” number. This is your shareholder account number and may be found on:

• Your One Fifty One plc Share Certificate(s)

• Other personalised correspondence sent to you by the Registrar

Computershare may be contacted online at www.computershare.com. Computershare also provides information by telephone. The dedicated enquiry line for One Fifty One plc investors is: +353 (0)1 447 5526.

Please note that One Fifty One plc is not responsible for the information provided by Computershare or any third party.


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Notes

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Annual Report& Accounts 2016

Huguenot House, 35-38 St. Stephen’s Green, Dublin 2, Ireland

Tel: +353 (0)1 612 1151Fax: +353 (0)1 612 1210Email: [email protected]

www.one51.com

annual report & accounts 2016 - ipl plastics · presented as discontinued in this annual report...

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