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2007 annual report

invest in a sustainable future

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One51 annual report and financial statements 2007

invest in a sustainable future

One51 is an investment company. Its principal areas of activity are:

• Environmental Services • Infrastructure • Food • Renewable Energy• Property and Other Investments

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contents

Chairman’s statement 6

Chief executive’s review 12

Directors and other information 18

Directors’ report 19

Statement of directors’ responsibilities 30

Independent auditors’ report 33

Statement of accounting policies 35

Consolidated profit and loss account 42

Consolidated statement of total recognised gains and losses 43

Consolidated balance sheet 44

Company balance sheet 45

Consolidated cash flow statement 46

Notes forming part of the financial statements 48

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invest in the future

One51 will continue to seek out new opportunities along with promoting integration and synergies among our existing businesses providing our investors with superior returns into the future.

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During 2007 One51 delivered strong performances across the markets in which we operate. This performance was delivered through strategic acquisitions and robust organic growth which will allow us to invest for the future as we continue to seek out new sources of growth and opportunity.

Net assets rose from 341m to 645m alongside an increase in EBIT from 9.7m to 22.3m.

chairman’s statement

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Dear Shareholder

2007 was a highly successful year in the development of One51 plc (‘One51’ or ‘the Group’). One51’s strategic acquisition policy together with strong organic growth has led to superior performances across the Group. Turnover rose 81% to 221 million (2006: 122m) and earnings before interest and tax rose 130% to 22.3 million (2006: 9.7m). Net asset value rose from 341 million to 645 million. Our geographical spread has extended from Ireland and the UK to Continental Europe and North America.

Share Exchange and Grey Market

In February 2007 by means of a share exchange with the Irish Agricultural Wholesale Society Ltd (‘the Society’) the members of the Society became direct owners of One51 shares. The share transfer, together with the transfers in earlier years of Society shares, has represented a substantial transfer of wealth by the Society to its members.

In October 2007 a ‘grey’ market was established to allow shareholders to trade their investment in One51. Trade in this market marked another milestone in the development of One51. The ‘grey’ market allows existing shareholders to realise value and also provides prospective investors with an opportunity to share in One51’s future success.

Organisation

One51 remains focused on delivering shareholder value through its activities in the Environmental Services, Infrastructure, Renewable Energy and Food sectors.

Since the year end a number of important developments took place in the management structure of One51. The Board made the decision to establish One51 Environmental Services as a standalone business with its own operating board and management team.

A number of transactions to complement the Group strategy were completed in 2007 and the Chief Executive outlines these in more detail in his report.

Dividend Policy

We continue to pursue a no dividend payment policy for the present, given One51’s current phase of rapid growth. This policy will however be kept under continuous review.


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Board Changes

During 2007 Mr. Nicholas Eyre resigned from the Board. I would like to thank Mr. Eyre for his contribution and also extend a warm welcome to the new Board members. Dr. Noel Cawley and Mr. Finbarr O’Neill were appointed to the Board in a Non-Executive capacity. Mr. Séamus Clancy and Mr. Hans Droog were appointed as Executive Directors while Mr. Michael Long was appointed Deputy Chief Executive Officer. On 22 January 2008 Ms. Eithne FitzGerald was appointed as a Non-Executive Director.

Management and Staff

One51 continues to focus on the development of human capital as a key element of growth and expansion. We have developed a strong executive management team and as a result of acquisitions and external recruitment, a number of highly experienced and knowledgeable new personnel have joined One51 during 2007. A strong culture of achievement and continuous development has and will continue to be fostered. I wish to express my thanks to all of One51’s employees whose strenuous efforts and commitment furthered the success of the Group, which under the energetic leadership of Philip Lynch is well placed to continue that success in 2008 and beyond.

Future

One51 is extremely well placed to take advantage of the growing number of opportunities that present themselves in high growth areas. Seeking out new opportunities along with promoting integration and synergies among our existing business is paramount. The Group is positioned in sectors which can withstand the challenges of the current economic climate and provide sustained returns to our loyal and growing investor base. I fully expect this to be reflected in a superior performance from One51 during 2008 and am pleased to be entering 2008 with a strong foundation for future development.

Denis BuckleyChairman


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One51 remains focused on delivering shareholder value.

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One51 Environmental Services is a substantial operation with significant interests in recycling and the management and treatment of hazardous waste.

invest in the environment

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One51 believes in investing in the environment and we have positioned our Environmental Services division at the forefront of the recycling industry.

In 2007 a ‘grey market’ in One51 shares was created. This marks another milestone in the development of One51.

chief executive’s review

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Dear Shareholder

One51’s growth and development took another substantial leap forward in 2007. It was a very active year for the Group with a number of key developments taking place.

The main highlights were:

• Exceptional growth and development

•Seven new acquisitions

•A very successful fundraising

•Creation of a ‘grey’ market in One51 shares

•Timely increase in banking facilities to 440 million in July 2007

Performance Review

During 2007 the Group generated turnover of 221 million as compared to 122 million during 2006. Of the 221 million turnover, 73 million arose from businesses acquired during the year.

Profit before interest and taxation in 2007 at 22.3 million was 130% up on that for the previous year. Retained Profit for the financial year to 31 December 2007 was

6.2 million as compared to 2.5 million in 2006.

Diluted earnings per share for 2007 was 8.52 cent, an increase of 51% over the equivalent figure for 2006.

At 31 December 2007 net borrowings totalled 114.5 million as compared to 44.7 million in 2006. During the year the bank facility was increased from 280 million to

440 million. This provides One51 with significant capacity for further investment and acquisitions where the right opportunities arise. During 2007 the equity base of One51 was substantially strengthened by the early conversion of 94% of the loan notes outstanding and by a successful allocation of shares.

One51 Environmental Services

One51 Environmental Services is now a substantial operation with significant interests in recycling and the management and treatment of hazardous waste. The core recycling activities are in the areas of metal, electrical and electronic equipment and materials (plastics, glass and cardboard).

Trading in One51 Environmental Services in 2007 has exceeded expectations. The environmental services sector is growing quickly with a positive regulatory framework and innovation playing a key part. We continue to see significant opportunities in the near future and are positioning One51 Environmental Services to be at the forefront of development in this dynamic area. With this in mind, the Boards’ decision in early 2008 to establish One51 Environmental Services with its own operating board and strong management team positions us to take advantage of the significant opportunities available.


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One51 Environmental Services remains highly acquisitive. Seven transactions were completed in 2007 which, combined with an active integration programme, has seen emerging synergies and organic growth ahead of expectations.

•In the metal recycling sector, One51 expanded its presence significantly in 2007 and early 2008 with the acquisitions of Reclamet, the Hegarty Group, Howarth Metal, Ampthill Metal and Cork Metal, which add to our existing metals business.

•In the waste electronic and electrical recycling sector, One51 acquired 95% of Resmar Holdings AG (‘Resmar’) in January 2007, subsequently increased to 97.5% in October 2007. Resmar is a Swiss group with a substantial track record in the sector. The acquisition of Resmar builds on the previously established electronic recycling businesses of TechRec Ireland and TechRec Northern Ireland. Additionally in November 2007 a 33% stake was acquired in Ontario based Global Electric and Electronic Processing Holdings Inc (‘GEEP’) with an option to acquire the balance post 2010. GEEP which started out as a metal recycler has expanded into the recycling of waste electrical and electronic equipment.

•In glass and dry recyclables we have increased our stake in Glassdon to 100% since the end of 2007.

•One51 entered the Construction and Demolition waste recycling business during 2007 with the acquisition of the Croydon based Country Waste Recycling Ltd. Croydon in South London is due for extensive redevelopment over the next five years.

•One51 is involved in plastic extrusion and injection moulding which is planned to be linked downstream to plastic recovery and recycling. The plastics business expanded in 2007 with the acquisition of two new companies, Thormac Engineering and Foamalite. Thormac Engineering, purchased in January 2007 and based in Shannon is a speciality injection moulding company providing additional capacity and complimenting the existing Protech business. Foamalite is a manufacturer of PVC foam products. As with the environmental management and remediation business, the strategy being pursued in the plastics business involves confining its sphere of operation to specialised and niche areas considered to offer scope for superior value creation.

Infrastructure

One51 is developing a presence in Ports Infrastructure on the island of Ireland.

•One51 owns 50% of Greenore Port which is equidistant from Dublin and Belfast, just off the M1 motorway. Given its location and deep water facility, Greenore Port offers excellent development potential. Current development plans for Roll on - Roll off and Load on - Load off facilities are awaiting planning approval and we hope to commence development work by the end of 2008.

•During 2007 One51, together with our partner the Doyle Group, formed the Moonduster Consortium with a view to making a formal offer to acquire Irish Continental Group plc (ICG). As at 31 December 2007 the Moonduster consortium had built up an interest of 25% in ICG.


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Food

One51’s food portfolio consists of Irish Pride Bakeries Ltd (‘Irish Pride’) and the LifeFibre Co. brand, which was acquired during the year. Profits and cash flow remain strong. This business also consists of a valuable national distribution operation which handles products for other manufacturers in addition to that of Irish Pride. The acquisition of the LifeFibre Co. brand and diversification of the food portfolio will continue to grow this key income stream.

Renewable Energy

The EU Renewable Energy Directive requires that Ireland source more than 15% of its electricity from renewable energy by 2010, up from just 5.2% in 2004. The Department of the Environment has further committed to a target of 33% by 2020. One51 has investments in both NTR plc (‘NTR’) and Open Hydro Ltd (‘Open Hydro’).

•NTR in which we hold a 25.26% stake, was a considerable success story in 2007. NTR successfully concluded a deal with the National Roads Authority for the disposal of the West Link Toll Facility on Dublin’s M50 motorway for 488 million over a period of 12 years. Additionally, Airtricity who are engaged in renewable energy production, and in which NTR has a 51% interest, has been sold for an equity value of 1.1 billion. This has resulted in a substantial cash gain for NTR.

•One51 also has an 11.28% stake in OpenHydro, the tidal turbines company. OpenHydro announced in February that Emera Inc had become an investor with a 7% shareholding. This investment indicates a premium of 90% to our original investment.

Property and Other Investments

One51 continues to manage a number of commercial properties together with an equity portfolio of various strategic holdings.

Outlook

One51 will continue to develop and invest in the many opportunities that exist in our identified strategic sectors. Despite turbulence in the financial markets, One51 has well structured financing arrangements which allows us flexibility to execute our strategy. We will continue to focus on organic growth and integration in our existing businesses. We see a strong pipeline of potential targets and investment opportunities and are confident that our strategy will continue to deliver strong growth in profits, positive cash flow and superior returns to our shareholders.

Philip Lynch Chief Executive


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One51 is focused on investing in our people. A culture of achievement and continuous development is adopted by the company and the efforts and commitment of our staff are key elements in our success.

invest in people

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Non-Executive Chairman Denis Buckley

Executive Directors Séamus Clancy (appointed 01/02/07) Paul Dixon Hans Droog (appointed 01/02/07) Michael Long Philip Lynch (Chief Executive Officer)

Non-Executive Directors Noel Cawley (appointed 01/02/07) Tom Corcoran Nicholas Eyre (resigned 23/08/07) Eithne FitzGerald (appointed 22/01/08) David Graham William Hickey Hugo Maguire James C. Murphy Finbarr O’Neill (appointed 01/02/07) Noel O’Sullivan

Company Secretary Susan Holburn

Bankers Allied Irish Bank Plc Bank of Ireland Group Plc Bank of Scotland (Ireland) Ltd IIB Bank Plc Rabobank Ireland Plc Ulster Bank Ltd

Solicitors LK Shields 39/40 Upper Mount Street Dublin 2

Auditors Duignan Carthy O’Neill Chartered Accountants 84 Northumberland Road Ballsbridge Dublin 4

Registered Office 151 Thomas Street Dublin 8

directors and other information

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The Directors present their report and audited consolidated financial statements for the year ended 31 December 2007.

Principal Activities

One51 is an investment company. Its principal areas of activity are:

•Environmental Services• Infrastructure•Food•Renewable Energy•Property and Other Investments.

Key Operating Subsidiary Companies are listed in note 35.

Results

The detailed financial statements are set out on pages 42 to 76.

Business Review

A review of the business units of One51 is contained within the Chairman’s Statement and the Chief Executive’s Review on pages 6 to 15.

Principal Risks and Uncertainties Under Irish Company law (Regulation 37 of the European Communities (Companies: Group Accounts) Regulations 1992, as amended), the Group is required to give a description of the principal risks and uncertainties which it faces. As detailed throughout our Annual Report the Group operates its businesses in diverse locations and business areas. This diversification reduces the potential impact of industry specific risk for the Group. The key risks and uncertainties identified are as follows: •The Group’s businesses operate in high growth sectors and the future potential of these businesses is dependant on the Group’s continued ability to perform effectively in those sectors. •The Group operates in Ireland, the United Kingdom, Continental Europe and North

America and the macro economic environment in those markets is beyond the control of the Group. A downturn in the economies in which One51 operates could adversely affect the Group’s revenues and margins. Adverse changes in foreign exchange rates and interest rates could adversely affect Group reported earnings and cash flow. The Group’s treasury function continuously monitors methods of minimising the impacts of fluctuations.

directors’ report

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•The Group is subject to strict environmental and health and safety laws which could, in certain circumstances, lead to higher than normal compliance costs borne by the Group.

•The Group is exposed to commodity price risk in particular for metals and agricultural

prices. The Group constantly monitors exposure to commodity price risk using a combination of measures.

•The Group is exposed to the risk of fluctuation in the value of its investments. Investments are actively managed to ensure value is optimised over time.

Dividends

The Directors do not recommend the payment of a dividend.

Future Development

The Group will continue to pursue new developments and grow shareholder value both organically and by acquisition.

Relations with Shareholders

Managing relations with shareholders is given a high priority by One51. All shareholders receive regular Information Updates containing details of the outlook for the Group and progress to date. Shareholders are also provided with access to a section of the Group website, www.one51.com, which contains details of their shareholder accounts and regular updates on the Group’s operations.

At the Annual General meeting shareholders are afforded the opportunity to raise matters with the Chairman and to meet with the other Directors all of whom attend the Meeting. The Notice of Meeting and Annual Report and Financial Statements are circulated to all shareholders at least 21 days in advance of the A.G.M.

Internal Control

The Board is responsible for the Group’s system of internal control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can provide only reasonable and not absolute assurance against material misstatement or loss. The Board confirms that there is an ongoing process for identifying, evaluating and managing any significant risks faced by the Group that has been in place for the financial year under review and up to the date of approval of the financial statements and that this process is reviewed by the Board. The key risk management and internal control procedures, which are supported by detailed controls and processes, include:

directors’ report

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•Key Management:

Skilled and experienced Group and Divisional management.

•Control Environment:

An organisational structure with clearly defined lines of authority and accountability.

•Financial Reporting:

A comprehensive system of financial reporting involving budgeting, monthly reporting and variance analysis.

•Risk Management:

Policies and procedures relating to computer security, capital expenditure and risk management. The Group’s commitment to this area is demonstrated by the recent appointment of a Head of Group Risk.

Human Resources

Emphasis is placed on the quality and abilities of our people through continuing education, training and development.

Going Concern

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. 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 30 and the reporting responsibilities of the auditors are set out in their report on pages 33 and 34.

Political Donations

During the year the Group and Company made no disclosable political donations.

Books of Account

The measures taken by the Directors to ensure compliance with the highest standards of governance regarding proper books of account are the implementation of necessary policies and procedures for recording transactions, the employment of competent accounting personnel with appropriate expertise and the provision of adequate resources to the finance function. The books of account of the Company are maintained at 151 Thomas Street, Dublin 8.

directors’ report

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Directors and Secretary

On 23 August 2007, Mr. N. Eyre resigned as a Director of the Company. On 22 January 2008, Ms. E. FitzGerald was co-opted to the Board as a Non-Executive Director.

In accordance with the Articles of Association Mr. M. Long and Mr. P. Lynch retire from the Board by rotation, and being eligible, offer themselves for re-election at the next Annual General Meeting. In recommending each of these Directors for re-election, the Board is satisfied that their performance continues to be effective and that they have demonstrated commitment to their roles.

In accordance with the Articles of Association, Directors co-opted by the Board must submit themselves to the shareholders for election at the next Annual General Meeting following their co-option. Accordingly, Ms. E. FitzGerald retires and offers herself for election at the next Annual General Meeting.

Directors’ and Secretary’s Interests

The Directors who held office during the year are listed on page 18. Interests of the Directors and Secretary in the share capital of the Company at 31 December 2007 and 2006 (or date of appointment, if later), which are beneficially held unless otherwise indicated, are shown below.

The Directors and Secretary together with all other Convertible Loan Note (‘CLN’) holders were invited to convert their CLN’s into ordinary shares in the Company during the year. The Directors and Secretary participated in the early conversion offer and accordingly their CLN’s were converted into ordinary shares on 29 June 2007.

The Directors’ and Secretary’s interests in ordinary shares as at 31 December 2006 included entitlements to ordinary shares following CLN conversion.

The Directors and Secretary were entitled to participate in the October 2007 Share Placing. Note 23 provides additional details in respect of the Share Placing.

Executive Directors and the Secretary have been awarded deferred convertible ordinary shares. These shares are convertible into ordinary shares in One51 in December 2010, 2011 and 2012, subject to the achievement of financial targets and service conditions being met. Note 9 provides additional details in respect of deferred convertible ordinary shares.

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Name Type of Stock Held

As at31 December

2007

As at31 December

2006

Directors:

Denis Buckley Ordinary Shares of 1.00 each 102,844 61,643

Noel Cawley Ordinary Shares of 1.00 each 40,000 -

Séamus Clancy Ordinary Shares of 1.00 each 353,433 208,989

A1 Deferred Convertible Ordinary Shares of 1.00 each 60,000 -

B1 Deferred Convertible Ordinary Shares of 1.00 each 66,000 -

C1 Deferred Convertible Ordinary Shares of 1.00 each 72,600 -

Tom Corcoran Ordinary Shares of 1.00 each 36,025 15,718

Paul Dixon Ordinary Shares of 1.00 each 416,385 293,844




Hans Droog Ordinary Shares of 1.00 each 324,398 219,954




David Graham Ordinary Shares of 1.00 each 48,108 37,383

William Hickey Ordinary Shares of 1.00 each 21,284 6,164

Michael Long Ordinary Shares of 1.00 each 936,791 677,020




Philip Lynch Ordinary Shares of 1.00 each 3,429,843 2,551,373




Directors’ and Secretary’s Interests (continued)

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directors’ report

Name Type of Stock Held

As at31 December

2007

As at31 December

2006

Hugo Maguire Ordinary Shares of 1.00 each 118,555 77,053

James C Murphy Ordinary Shares of 1.00 each 16,284 6,164

Finbarr O'Neill Ordinary Shares of 1.00 each 39,455 -

Noel O’Sullivan Ordinary Shares of 1.00 each 26,284 6,164

Secretary:

Susan Holburn Ordinary Shares of 1.00 each 81,676 47,964 A1 Deferred Convertible Ordinary Shares of 1.00 each 8,000 -B1 Deferred Convertible Ordinary Shares of 1.00 each 8,800 -C1 Deferred Convertible Ordinary Shares of 1.00 each 9,680 -

Share OptionsNo. of

Options at 31 December

2006

No. of Options

Granted During Period

No. of Options

Exercised During Period

No. of Options at

31 December 2007

Exercise Price

Exercise Dates

Philip Lynch - 630,000 - 630,000 5.06 2007 - 2014

Michael Long - 270,000 - 270,000 5.06 2007 - 2014

Paul Dixon - 270,000 - 270,000 5.06 2007 - 2014

Séamus Clancy - 140,000 - 140,000 5.06 2007 - 2014

Hans Droog - 140,000 - 140,000 5.06 2007 - 2014

Susan Holburn (Secretary)

- 70,000 - 70,000 5.06 2007 - 2014

There were no transactions in the above interests between 31 December 2007 and 3 April 2008.

Neither the Directors nor the Company Secretary held a beneficial interest in the share capital or debentures of any subsidiary of the Company, at 31 December 2007 and 31 December 2006 (or date of appointment, if later).

Directors’ and Secretary’s Interests (continued)

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directors’ report

Substantial Shareholdings

In addition to those interests disclosed under Directors’ and Secretary’s interests, as at 3 April 2008, the Company was aware of the following interests in its ordinary share capital:

No. of Shares %

Kerry Co-operative Creameries Ltd 7,379,063 6.15

Co-operative Group Ltd 7,431,331 6.20

Corporate Governance

The Board of One51 is committed to the maintenance of a high standard of corporate governance throughout the Group. Corporate Governance is the process by which One51 is directed, managed, administered and controlled in order to protect the interests of the shareholders and other stakeholders.

Board

The Board is accountable to the shareholders for the leadership, direction and control of the Company. The management and day to day running of the Company is delegated to the Chief Executive and senior management. The Board as at 31 December 2007 consisted of five executive Directors and nine Non-Executive Directors. In addition on 22 January 2008 Ms. E. FitzGerald was co-opted to the Board in a non-executive capacity.

Meetings of the Board take place normally on a monthly basis but may also take place more frequently as necessary. In advance of the regular monthly Board meetings each Director is provided with an agenda and relevant papers including management accounts. During 2007 the Board met on 25 separate occasions.

The Board has reserved to itself decision making in relation to an agreed list of matters. These include the setting of the strategic direction of the Group, the approval of budgets and other financial plans, the approval of the financial statements, the approval of acquisitions / investments and major capital expenditure, the approval of senior management appointments and the review of the performance of Board committees.

All of the Directors both executive and non-executive are considered to be independent in both character and judgement. The Non-Executive Directors are all independent of management. The composition of the Board is made up of persons who bring a wide range of knowledge, skills and experience to the Company. The distinct roles of Chief Executive and Chairman of the Board are reinforced by being carried out by separate individuals.

Board Committees

The efficient operation of the Board is facilitated by the establishment of committees which enable the matters included in their terms of reference to be dealt with in greater detail. The committees established by the Board are: the Audit Committee, the Nomination Committee and the Remuneration Committee. The Company Secretary is also secretary to all of these committees.

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Audit Committee

Membership of the Audit Committee which is chaired by Mr. F. O’Neill also includes Messrs. N. Cawley, D. Graham and W. Hickey, all of whom are independent Non-Executive Directors. During the year the Audit Committee met on four occasions. The Audit Committee, which has written terms of reference, is responsible to the Board for the review of:

•the adequacy of the systems of internal control,

•the financial statements,

•accounting policies, and

•risk management procedures.

The Audit Committee is also responsible to the Board for the oversight of the relationship with the Group’s external auditors particularly in the area of the provision of assurance with regard to their independence. The Committee is involved in the audit fee approval process and monitors the extent to which non-audit services are provided by the external auditors.

While only the members of the Audit Committee are entitled to be present at meetings of the Committee, the Chief Financial Officer and the external auditor are regularly invited to attend meetings. On at least one occasion per annum the Committee meets with the external auditor without any executive management in attendance.

Nomination Committee

The Nomination Committee consists of Messrs. N. O’Sullivan (Chairman), D. Buckley and P. Lynch. The Committee met on one occasion during 2007. The Nomination Committee is responsible for making recommendations to the Board with regard to the co-option of new Directors. In fulfilling this responsibility the members of the Committee are obliged to consider the balance of skills, knowledge and experience of candidates with the requirements of the Board. The Committee is also responsible to the Board for the review of management succession plans.

Remuneration Committee

Membership of the Remuneration Committee which is chaired by Mr. T. Corcoran also includes Messrs. H. Maguire and J.C. Murphy, all of whom are independent Non-Executive Directors. The Remuneration Committee met on six occasions during 2007. The Committee is responsible to the Board for the formulation and approval of the remuneration policy in respect of executive Directors and other senior management. Details of Directors Remuneration are set out above and in Note 7 of the Financial Statements.

Meetings

There were 25 full meetings of the Board during the year ended 31 December 2007. Details of Directors’ attendance are set out below. The Chairman sets the agenda for each meeting, in consultation with the Chief Executive and Company Secretary.

directors’ report

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directors’ report

Attendance at Board and Board Committee Meetings During the Year Ended 31 December 2007

Board Audit Remuneration Nominations

A B A B A B A B

Denis Buckley 25 20 - - - - 1 1

Philip Lynch 25 22 - - - - - -

Michael Long 25 25 - - - - - -

Paul Dixon 25 22 - - - - - -

Hans Droog* 23 17 - - - - - -

Séamus Clancy* 23 19 - - - - - -

Noel Cawley* 23 21 4 3 - - - -

Tom Corcoran 25 21 - - 6 6 - -

Nicholas Eyre** 18 8 - - - - - -

David Graham 25 18 4 4 - - - -

William Hickey 25 24 4 4 - - - -

Hugo Maguire 25 25 - - 6 6 - -

James C Murphy 25 23 - - 6 6 - -

Finbarr O’Neill* 23 21 4 4 - - - -

Noel O’Sullivan 25 20 - - - - 1 1

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,

(*Director appointed 1 February 2007; ** Director resigned 23 August 2007)

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Environment, Health and Safety

One51 is fully committed to operating all its businesses in a safe and responsible manner to protect the health of its employees, the public at large and safeguard the environment. Compliance with safety, health and environmental regulatory requirements is considered a minimum requirement within all business divisions and member companies.

Environmental Management Systems

Within the Environmental Services Operation there is a total commitment to compliance with environmental licences as issued by the Environmental Authorities. All licensed sites have regular surveillance visits from the relevant licensed authorities and as a responsible organisation, One51 has endeavoured not only to meet but to exceed the requirements set out by these agencies. To ensure standards are improving on an ongoing basis the majority of plants have attained accreditation to ISO 14001 and others are working towards accreditation. In addition, there are on-going audits by customers to validate compliance with their standards and duty of care.

Health and Safety

The health and safety of all employees is of paramount concern to all management within the Group. To ensure the alignment of processes across all divisions and businesses a Health and Safety Steering Committee was established comprising of senior management to approve the programme of work and set key indicators to measure performance. A Group Health and Safety Committee with representatives from each site was also established to communicate work plans and share best practice. These committees met quarterly throughout 2007.

Consultation processes are designed to ensure a culture of health and safety compliance which is integral to all business planning and decision making. Significant resources have been dedicated to setting the highest standards for environmental, health and safety compliance. Health and Safety is listed as an agenda item for all Board meetings.

Corporate Social Responsibility Policy

One51 is committed to supporting the community by conducting its business in a socially responsible manner.

One51 recognises the significance of local community and strives to be a responsible partner in the community in which it operates. One51 encourages all its businesses to support the particular needs of their communities by contributing to local charities and community initiatives. Projects and organisations supported during the year include Liberties College and Trinity Access Programme, Focus Ireland, Cystic Fibrosis and Hopesource Foundation among others.

directors’ report

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directors’ report

The One51 Charitable Foundation (‘the Foundation’) has been established, separately from One51, to continue the co-operative spirit and ethos of Horace Plunkett, the founder of both the Irish Agricultural Wholesale Society Ltd in 1897 and the co-operative movement in Ireland. The Foundation supports educational programmes and addresses social issues in the community both in Ireland and overseas.

Among the overseas self help programmes being supported by the Foundation which address poverty reduction, food security and healthcare are the following:

Africa - Self help education programmes

Ethiopia - Agricultural self help programmes

India - Education programmes for street children in Calcutta

South Africa - HIV / AIDS orphan care programmes

Uganda - School building programmes

Auditor

In accordance with Section 160(2) of the Companies Act, 1963, the auditor, Duignan Carthy O’Neill, Chartered Accountants, will continue in office.

On behalf of the Board: 3 April 2008

Director: Denis Buckley Director: Philip Lynch

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Irish Company law requires the Directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for that period. In preparing those financial statements the Directors are required to:

•select suitable accounting policies and apply them consistently;

•make judgements and estimates that are reasonable and prudent;

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

The Directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements are prepared in accordance with accounting standards generally acceptable in Ireland and comply with Irish statute comprising the Companies Acts, 1963 to 2006 and the European Communities (Companies: Group Accounts) Regulations, 1992. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

statement of directors’ responsibilities

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statement of directors’ responsibilities

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financial statements

for the year ended 31 December 2007

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Independent Auditor’s Report to the Shareholders of One51 plc.

We have audited the financial statements of One51 plc for the year ended 31 December 2007, which comprise the Company Balance Sheet, Consolidated Group Profit and Loss Account, Balance Sheet, Cash Flow Statement, Statement of Total Recognised Gains and Losses and the related notes. These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain fixed assets, and the accounting policies set out therein.

Respective Responsibilities of Directors and Auditors

The Directors' responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and the Accounting Standards issued by the Accounting Standards Board and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland) are set out in the Statement of Directors' Responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

This report is made solely to the company’s members, as a body, in accordance with Section 193 of the Companies Act 1990. 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.

We report to you our opinion as to whether the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland and are properly prepared in accordance with the Companies Acts, 1963 to 2006, and the European Communities (Companies: Group Accounts) Regulations, 2002.

We also report to you whether in our opinion:

•proper books of account have been kept by the Company;

•whether, at the balance sheet date, there exists a financial situation requiring the convening of an Extraordinary General Meeting of the Company; and

•whether the information given in the Directors' Report is consistent with the financial statements.

In addition, we state whether we have obtained all the information and explanations necessary for the purposes of our audit and whether the Company's Balance Sheet and its Profit and Loss Account are in agreement with the books of account.

We also report to the shareholders if, in our opinion, any information specified by law regarding Directors' remuneration and Directors' transactions is not given and, where practicable, include such information in our report.

independent auditor’s report to the shareholders of One51 plc

34

We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other information comprises only the Directors' Report, the Chairman's Statement and the Chief Executive’s Statement. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.

Basis of Audit Opinion

We conducted our audit in accordance with International Auditing Standards (UK and Ireland). An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion

In our opinion the financial statements:

•give a true and fair view of the state of the Group’s and the company’s affairs as at 31 December 2007 and of the Group’s profit and cashflow for the year then ended, and

•have been properly prepared in accordance with the Companies Acts, 1963 to 2006 and the European Communities (Companies: Group Accounts) Regulations, 2002.

We have obtained all the information and explanations we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the company. The Company’s Balance Sheet is in agreement with the books of account.

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

The net assets of the company, as stated in the Balance Sheet, are more than half of the amount of its called-up share capital and, in our opinion, on that basis there did not exist at 31 December 2007 a financial situation which under Section 40(1) of the Companies (Amendment) Act, 1983, would require the convening of an extraordinary general meeting of the Company.

Duignan Carthy O’Neill, Chartered Accountants and Registered Auditors84 Northumberland Road, Ballsbridge, Dublin 4.

Date: 3 April 2008

independent auditor’s report to the shareholders of One51 plc

35


Statement of Accounting Policies

One51 plc (the ‘Company’) is a company domiciled and incorporated in Ireland. The financial statements for the year ended 31 December 2007 consolidate the individual financial statements of the Company and its subsidiaries (together referred to as the ‘Group’) and show the Group’s interest in associates and joint ventures under the equity method of accounting.

The individual and Group financial statements of the Company were authorised for issue by the Directors on 3 April 2008.

Basis of Preparation

The Group financial statements are prepared in accordance with accounting standards generally accepted in Ireland and with Irish statutes comprising Companies Acts 1963 and 2006. Accounting Standards generally accepted in Ireland in preparing financial statements giving a true and fair view are those published by the Institute of Chartered Accountants in Ireland and issued by the Accounting Standards Board.

The financial statements are prepared on the historical cost basis except that the following assets are stated at valuation: quoted securities held within Financial Assets. This is a change of accounting policy as is outlined further below.

The Group and Company financial statements are presented in Euro, rounded to the nearest thousand, in accordance with applicable accounting principles.

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. 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 estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.

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 accounting for share-based payments, valuation of fixed assets and investments, intangible assets, provisions, and deferred tax.

statement of accounting policies

36

Basis of Consolidation

The Group financial statements reflect the consolidation of the results, assets and liabilities of the parent undertaking and all of its subsidiaries, together with the Group’s share of profit / losses of associates and joint ventures. Where a subsidiary, associate or joint venture is acquired or disposed of during the financial year, the Group financial statements include the attributable results from or to the effective date when control passes.

Subsidiary Undertakings

Subsidiary undertakings are those entities over which the Group has the power to control the operating and financial policies so as to obtain economic benefit from their activities. 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.

The interest in a subsidiary undertaking that is attributable to the shares held by or on behalf of persons other than the parent undertaking and its subsidiary undertakings is included within the minority interest in the balance sheet.

Associates and Joint Ventures

Associates are those entities in which the Group has a significant influence over, but not control of, the operating and financial policies. Investments in associates are accounted for using the equity method of accounting. Joint ventures are those entities over whose operating and financial policies the Group exercises control jointly, under a contractual agreement with one or more parties. Investments in joint ventures are accounted for using the gross equity method of accounting.

Transactions Eliminated on Consolidation

Intragroup balances and any unrealised gains or losses or income and expenses arising from intragroup transactions, are eliminated in preparing the Group financial statements. Unrealised gains and income and expenses arising from transactions with associates and joint ventures 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.


37


Business Combinations

The acquisition method of accounting is employed in accounting for the acquisition of subsidiaries by the Group.

The cost of a business combination is measured as the aggregate of the fair value at the date of exchange of assets given, liabilities incurred or assumed and equity instruments issued in exchange for control together with any directly attributable costs. Where a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the amount of the estimated adjustment is included in the cost at the acquisition date if the adjustment can be reliably measured. Any changes to this estimate in subsequent periods are reflected in goodwill.

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, any adjustments to the provisional values allocated to the identifiable assets and liabilities are made within twelve months of the acquisition date.

The interest of minority shareholders is stated as the minority’s proportion of the fair values of the assets and liabilities recognised.

The acquisition method of accounting is applied in the same manner as detailed above to the proportionate share of net identifiable assets and liabilities acquired in an associate or a joint venture.

Deferred Purchase Consideration and Earnout Obligations

Deferred purchase consideration and earnout obligations payable after one year from the date of acquisition are discounted at an appropriate loan interest rate, and accordingly, are carried at net present value on the balance sheet. An appropriate interest charge, at an appropriate constant rate on the carrying amount adjusted to reflect market conditions, is reflected in the profit and loss account over the earnout period increasing the value of the provision so that the obligation will reflect its settlement value at the time of maturity. Adjustments to the amount of the obligation relating to changes in the amount expected to be paid, the effective interest rate or the timing of the expected payments are accounted for as adjustments to the cost of the acquisition and reflected in goodwill.

Intangible Assets

Intangible assets acquired are capitalised at cost and are amortised over the period of their expected useful lives.


38

Goodwill

Goodwill represents amounts arising on acquisition of subsidiaries, associates and joint ventures. Goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets and liabilities acquired. In respect of associates and joint ventures, the carrying amount of goodwill is included in the carrying amount of the investment. Goodwill is not amortised but is tested annually for impairment and provision made for any impairment which management deem to be other than temporary.

Turnover

Turnover represents the fair value of the sale of goods or services supplied to third parties in the ordinary course of business, after deducting discounts and exclusive of valued added tax and other sales taxes. Revenue is recognised when the significant risks and rewards of ownership of goods have passed to the buyer, it is probable that the economic benefits will flow to the Group, and the amount of turnover can be measured reliably.

Employee Benefits

Pension Obligations:

Obligations for contributions to defined contribution plans are recognised as an expense in the profit and loss account as the related employee service is received. The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan, by estimating the future benefit that employees have earned in return for their service in the current and prior periods. That estimate is discounted to determine the present value and the fair value of any plan assets is deducted. The discount rate is the yield at the balance sheet date on high quality corporate bonds that have a maturity date approximating the terms of the Group’s obligations. The calculation is performed by an independent qualified actuary using the projected unit credit method. Actuarial gains and losses are recognised in the statement of total recognised gains and losses. Current and past service cost, interest on the scheme liabilities and expected return on assets are recognised in the profit and loss account.

Equity Settled Compensation:

The Group operates a number of equity settled incentive and retention plans. All equity instruments granted under these plans are equity settled share based payments as defined by FRS20. The fair value of the equity instruments granted is recognised as an expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employee becomes unconditionally entitled to the equity instrument. The fair value of the equity instruments granted is measured by an independent consultant using an approved model, taking into account the terms and conditions under which the equity instruments were granted. The plans and share option scheme are subject to non market vesting conditions and, therefore, the amount recognised as an expense is adjusted annually to reflect the actual number of equity instruments that vest.


39


Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity, in which case the related tax is recognised in equity.

Current tax is the expected tax payable on the taxable profit for the year, using tax rates and laws that have been enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred income tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using the tax rates enacted or substantially enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be recovered. Deferred income tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Foreign Currency

Transactions in foreign currency are translated at the foreign currency exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to euro at the exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the profit and loss account.

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to euro at the foreign exchange rate ruling at the balance sheet date. The revenues and expenses of foreign operations are translated to euro at the average rates when the transactions occurred. Foreign exchange differences arising on translation of the net assets of a foreign operation are recognised directly in equity, in a translation reserve.

Exchange gains or losses on long term intra-group loans and on foreign currency borrowings used to finance or provide a hedge against Group equity investments in non-euro denominated operations, are taken to the translation reserve to the extent that they are neither planned nor expected to be repaid in the foreseeable future or are expected to provide an effective hedge of the net investment.


40

Tangible Fixed Assets

Tangible fixed assets are stated at cost less accumulated depreciation. Other subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the asset. All other expenditure, including repairs and maintenance costs, is recognised in the profit and loss account as incurred.

Depreciation is calculated to write off the cost less estimated residual value of tangible fixed assets, other than freehold land and assets under construction, on a straight line basis, by reference to the following useful lives:

Buildings - 25 to 50 years

Plant and Machinery - 5 to 15 years

Transportation Assets - 3 to 5 years

The residual value of assets, if significant, and the useful life of assets is reassessed annually.

Gains and losses on disposals of tangible fixed assets 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 operating profit.

Leased Assets

Leases on tangible fixed assets where the Group has substantially all the risks and rewards of ownership, 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 asset or the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in interest bearing loans and borrowings. The interest element of the payments is charged to the profit and loss account over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The asset acquired under the finance lease is depreciated over the shorter of the useful life or the lease term.

Leases 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 are charged to the profit and loss account on a straight line basis over the lease term.


41


Financial Assets

Unquoted financial investments are stated at initial acquisition cost inclusive of any associated acquisition charges arising less provisions for permanent diminution in value.

Quoted financial investments were previously stated on the same basis as unquoted financial investments. In 2007 this accounting policy was changed to one where quoted financial investments are stated at a valuation based on the lowest price at which each quoted financial investment has traded during the full financial year, or from the date of acquisition for those investments acquired during the financial year.

Stocks

Stock is stated at the lower of cost, on a first in-first out basis, and net realisable value. Cost includes all expenditure, which has been incurred in the normal course of business in bringing the products to their present location and condition. Net realisable value is the estimated selling price of stock on hand less all further costs to completion and all costs expected to be incurred in marketing, distributing and selling.

Grants

Grants that compensate the Group for the cost of an asset are shown as deferred income and amortised to the profit and loss account by installments on a basis consistent with the depreciation policy of the relevant assets. Other grants are credited to the profit and loss account to offset matching expenditure.

Research and Development

All expenditure on research and development is written off in full against the results of the period in which it is incurred.


42


consolidated profit and loss account

NotesContinuing Operations Acquisitions

Total 2007

Total 2006

’000 ’000 €’000 ’000

Turnover (including share of joint ventures) 158,525 72,660 231,185 132,743

Less : Share of joint venture turnover (10,334) - (10,334) (10,857)

Group turnover 1 148,191 72,660 220,851 121,886

Cost of sales (99,311) (50,879) (150,190) (86,169)

Gross profit 48,880 21,781 70,661 35,717

Net operating expenses 2 (34,525) (14,871) (49,396) (26,038)

Group operating profit 14,355 6,910 21,265 9,679

Share of operating profit of joint ventures

and associated companies 15 - - 1,050 888

Profit before exceptional items - - 22,315 10,567

Exceptional items 3 - - - (874)

Profit on ordinary activities before interest - - 22,315 9,693

Interest payable and similar charges

Bank and other interest 4 - - (9,345) (968)

Accrued coupon on CLN's 4 - - (4,333) (4,027)

Profit on ordinary activities before taxation - - 8,637 4,698

Taxation on profit on ordinary activities 10 - - (1,934) (2,539)

Profit on ordinary activities after taxation - - 6,703 2,159

Minority interests 26 - - (454) 373

Profit for the financial year - - 6,249 2,532

Dividends - - - -

Retained profit for the financial year

attributable to equity shareholders

including share of associates - - 6,249 2,532

Basic earnings per share 11 - - 8.62 cent 5.66 cent

Diluted earnings per share 11 - - 8.52 cent 5.66 cent


Director: Denis Buckley

Director: Philip Lynch

43



consolidated statement of total recognised gains and losses

Notes 2007 2006

€’000 ’000

Profit for the financial year 24 6,249 2,532

Currency translation effect 24 (7,424) 744

Financial investment revaluation reserve 24 122,156 -

Actuarial loss on group defined benefit pension schemes 24 (1,557) -

Total recognised gains and losses relating to the year 119,424 3,276

44

as at 31 December 2007

consolidated balance sheet

Notes 2007 2006

€’000 ’000

Fixed assets

Intangible assets 13 209,686 64,933

Tangible assets 14 158,459 87,726

Financial assets 15 417,317 244,489

785,462 397,148

Current assets

Stocks 16 12,018 4,137

Debtors 17 66,426 41,941

Cash at bank and in hand 47,306 33,313

125,750 79,391

Creditors: amounts falling due within one year 18 (89,698) (57,470)

Net current assets / (liabilities) 36,052 21,921

Total assets less current liabilities 821,514 419,069

Creditors: amounts falling due after more than one year 19 (175,941) (79,281)

Deferred tax asset / (liability) 21 (813) 1,010

Capital grants 22 (219) (300)

Net assets 644,541 340,498

Capital and reserves

Called up ordinary share capital 23 119,748 44,943

Deferred convertible share capital 23 2,526 -

Share premium 24 248,149 1,086

Share based payments reserve 24 1,562 -

Reserves 24 270,373 292,531

Shareholders’ funds 25 642,358 338,560

Minority shareholders’ interests 26 2,183 1,938

Shareholders’ funds - equity 644,541 340,498




45


as at 31 December 2007

company balance sheet

Notes 2007 2006

€’000 ’000

Fixed assets

Intangible assets - -

Tangible assets 14 1,568 23,841

Financial assets 15 112,397 237,933

113,965 261,774

Current assets

Stocks 16 - -

Debtors 17 695,049 101,615

Cash at bank and in hand 1,620 1,052

696,669 102,667

Creditors: amounts falling due within one year 18 (26,630) (28,277)

Net current assets / (liabilities) 670,039 74,390

Total assets less current liabilities 784,004 336,164

Creditors: amounts falling due after more than one year 19 (35,594) (4,977)

Deferred tax asset 21 791 1,785

Capital grants 22 - -

Net assets 749,201 332,972

Capital and reserves

Called up ordinary share capital 23 119,748 44,943

Deferred convertible share capital 23 2,526 -

Share premium 24 248,149 1,086

Share based payments reserve 24 1,562 -

Reserves 24 377,216 286,943

Shareholders’ funds – equity 749,201 332,972




46


consolidated cash flow statement

Notes 2007 2006

€’000 ’000

Net cash inflow / (outflow) from operating activities 27 25,480 (808)

Returns on investments and servicing of finance 27 (5,771) (951)

Taxation paid 27 (3,567) (479)

Increase in related party balances 27 (4,751) (8,132)

Capital expenditure and financial investments 27 (107,424) (123,507)

(96,033) (133,877)

Acquisitions 27 (110,455) (49,429)

Net cash outflow before financing (206,488) (183,306)

Financing 27 135,340 172,108

Decrease in cash during the year (71,148) (11,198)

47



reconciliation of net cash flow to movement in net debt

Notes 2007 2006

€’000 ’000

Increase in cash for the year 28 13,993 30,915

Increase in debt for the year 28 (83,876) (39,359)

Changes in net debt resulting from cash flows 28 (69,883) (8,444)

Increase in finance leases for the year 28 (1,265) (2,754)

Movement in net debt in the year 28 (71,148) (11,198)

Net debt at 1 January 2007 28 (44,655) (33,457)

Translation movements 28 1,312 -

Net (debt) at 31 December 2007 28 (114,491) (44,655)

48

(forming part of the financial statements)

notes

1 Segmental Information on TurnoverTotal Sales

2007Total Sales

2006

€’000 ’000

By class of business

One51 Environmental Services 160,946 66,298

Other 59,905 55,588

220,851 121,886

By geographical area

Ireland 123,684 111,449

United Kingdom 62,297 10,437

Continental Europe 34,870 -

220,851 121,886

Further segmental information has not been given as, in the opinion of Directors, to do so would be prejudicial to the interests of the Group.

2 Operating Expenses / Income2007 2006

€’000 ’000

Distribution costs 7,594 5,173

Sales and marketing expenses 4,654 3,967

Administration costs 33,854 13,701

Depreciation and amortisation 9,565 4,993

Other operating expenses / (income) (6,271) (1,796)

49,396 26,038

3 Exceptional Items2007 2006

€’000 ’000

Reorganisation and restructuring of continuing operation - 835

Other - 39

- 874

49



notes

4 Interest Payable and Similar Charges2007 2006

€’000 ’000

Financing costs

On bank loans, overdrafts and other loans wholly repayable within five years 9,233 317

On finance leases 236 151

On deferred consideration 842 438

On bank loans and overdrafts – associates 69 62

Total financing costs 10,380 968

Financing income

Interest income (804) -

Defined benefit: net expected return on scheme assets (note 34) (231) -

Total financing income (1,035) -

Bank and other interest (net) 9,345 968

Accrued interest on CLN's 4,333 4,027

Financing costs (net) 13,678 4,995

94% of CLN holders availed of the early conversion option offered to them in April 2007 and their notes converted into ordinary shares in One51 plc on 29 June 2007. Of the 2007 charge for accrued interest on CLN's outlined above, 3.205m is in respect of these converted notes from the commencement of the year to the date of conversion upon which date interest ceased to accrue and was itself converted into ordinary shares in One51 plc under the terms of the notes. Details of the main terms of the CLN's, including those terms which outline when accrued interest becomes payable in cash are outlined in note 32.

5 Statutory and Other Information

€’000 ’000

Auditors’ remuneration

- for audit 395 177

- for non-audit services - -

Depreciation

- of owned tangible fixed assets 9,217 4,868

- of leased tangible fixed assets 348 125

Amortisation of intangible assets 30 -

Capital grants amortised (81) (79)

Revenue grants amortised (62) -

50


notes

6 Profit Attributable to One51 plc

A profit for the year after taxation and attributable to ordinary shareholders amounting to €231,844,048 (2006: €1,057,614) has been accounted for in the financial statements of the Holding Company. As permitted by Section 3 (2) of the Companies Amendment Act, 1986, a separate Profit and Loss Account of the Holding Company is not presented.

7 Directors’ Remuneration

€’000 ’000

Salaries to executive Directors (including benefits in kind) 1,814 1,183

Share based compensation (i) 2,712 -

Fees to Non-Executive Directors 320 100

Other remuneration including pension contributions 127 93

4,973 1,376

(i) This charge relates to (a) the One51 deferred convertible share plan and (b) the One51 Group Share Option Scheme 2006. The terms and conditions attaching to these plans are detailed in note 9.

8 Staff Numbers and Costs No. of Employees

2007

No. of Employees

2006

Administration / Management 397 108

Operations 908 534

1,305 642

The aggregate payroll costs of these employees were as follows:

€’000 ’000

Wages and salaries 41,706 23,811

Social welfare costs 3,315 1,906

Other pension costs 1,851 614

Share based payments 4,088 -

50,960 26,331

51



notes

9 Share Based Payments

The Group grants equity instruments under the following plans and schemes:

• One51 Group Share Option Scheme 2006

• One51 Annual Executive Bonus Plan 2006

• One51 Deferred Convertible Share Plan 2007

The general terms and conditions applicable to the equity instruments granted by One51 plc under the above listed plans are addressed below. The economic cost to the Group and the shareholders of the various reward schemes will be controlled through an overall 15% limit. Within the prescribed limit, the Board will control the level of participation by individuals.

The equity instruments granted to the Group’s employees under the above schemes are equity settled share based payments as defined in FRS 20, Share Based Payments. The FRS 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. The expense reported in the Group Profit and Loss Account is €4.1 million (2006: nil).

(a) One51 Group Share Option Scheme 2006

On 3 January 2007, the Group granted employees options over 2,247,160 ordinary shares in One51 which may be exercisable upon the attainment of a specified growth in the share price being achieved. The terms to expiry of these options is seven years from date of grant and the exercise price at which they may be exercised is €5.06 per share. The share price growth target was attained during the year and all options are exercisable at the end of the financial year.

The measurement requirements of FRS 20 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:

Expected volatility 25% per annum

Dividend yield 0% per annum

Risk free interest rate 3.9% per annum

Expected rate of forfeitures 10% per annum

Minimum gain for voluntary early exercise 100% of exercise price

Rate of voluntary early exercise at minimum gain 50% per annum

Headline share price at date of grant €5.06

Option exercise price €5.06

Discount on headline share price to arrive at fair value 35%

The fair value of each option granted based on the above assumptions was €0.40 per option, and the charge included in the profit and loss account in the financial year in respect of these options was €899,000.

(b) One51 Annual Executive Bonus Plan 2006

During the financial year One51 plc issued 831,990 ordinary shares to employees under this scheme. Under the terms of the plan employees are restricted from disposing of these shares for a period of 3 years and 1 week from the date of issue. This award has not resulted in a charge to the profit and loss account for the financial year as the cost of this award was accrued in the 2006 financial statements.

52


notes

9 Share Based Payments (continued)

(c) One51 Deferred Convertible Share Plan 2007

The above scheme was implemented by the Group during the financial year.

The main terms of the scheme are as follows:

• Employees have been granted deferred convertible shares in One51 plc which conditionally convert into ordinary shares on the attainment of financial performance targets and the completion of length of service requirements once the financial performance targets have been attained.

• The financial performance targets have been set for 2007, 2008 and 2009 respectively.

• Should a financial performance target for a specific year not be attained the Group may redeem the deferred convertible shares issued in respect of that year at par value of €1 per share.

During the financial year the Group issued 2,525,530 deferred convertible shares.

The measurement requirements of FRS 20 have been applied to shares issued under this scheme and the calculation of the fair value of each share comprises two elements as follows:

(1) The par value of €1 per share, which is charged to the profit and loss account on issue of the shares, and

(2) The residual conversion element, which is accounted for as a share based payment.

The fair value of the conversion element of the deferred convertible shares issued under the plan was determined by employing a Black – Scholes Model using the following assumptions:

Expected volatility 25% per annum

Dividend yield 0% per annum

Risk free interest rate 4.25% per annum

Headline share price at date of issue €5.00

Discount on headline share price to arrive at fair value 35%

FRS 20 requires that the fair value of the conversion element should be spread over its respective vesting period.

The charge to the profit and loss account in the financial year in respect of shares issued under this plan was as follows;

2007 2006

€’000 ’000

Par value of deferred convertible shares issued during the year 2,526 -

Charge in respect of the residual conversion element 663 -

3,189 -

53



notes

10 Taxation on Profit on Ordinary Activities

€’000 ’000

Current tax: Republic of Ireland

Corporation tax on profits for the year at 12.5% (2006: 12.5%) 762 200

Adjustments in respect of prior years (16) (921)

746 (721)

Share of associates tax 81 62

827 (659)

Current tax: Overseas

Current tax on profit for the year 1,087 645

Adjustments in respect of prior years (179) -

908 645

Total current tax charge 1,735 (14)

Deferred tax:

Origination and reversal of timing differences 320 2,553

Adjustments in respect of prior years (121) -

Total deferred tax charge 199 2,553

Total tax charge 1,934 2,539

The deferred tax charge for the Group for the year ended 31 December 2007 reflects the impact of the legislated reduction in UK tax rates from 30% to 28% effective 6 April 2008.

Reconciliation of average effective tax rate to applicable tax rate

Profit before tax 8,637 4,698

Less share of associated profits (1,050) (888)

7,587 3,810

Taxation based on Irish corporate tax rate of 12.5% 948 476

Expenses not deductible for tax purposes 113 105

Higher rates of tax on other income 387 59

Higher rates of tax on overseas income 511 113

Adjustments in respect of prior years (195) (921)

Utilisation of losses forward (757) (811)

Other adjustments 647 903

Share of associates tax 81 62

Total current tax charge 1,735 (14)

Other adjustments: In calculating the corporation tax liability for the year no deduction can be claimed for the accrued interest on the CLN's as a deduction can only be claimed where the interest is paid in cash (see note 32).

€’000 ’000

54


notes

11 Earnings per Share

Basic earnings per share

The calculation of basic earnings per share for the year ended 31 December 2007 was based on the profit for the financial year

attributable to ordinary shareholders of €6,249,000 (2006: €2,532,000) and the weighted average number of ordinary shares

outstanding during the year of 72,510,160 (2006: 44,761,143) calculated as follows:

2007 2006

€’000 ’000

Profit for the financial year attributable to ordinary shareholders 6,249 2,532

Weighted average number of ordinary shares €’000 €’000

Issued ordinary shares at 1 January 2007 44,943 44,509

Effect of shares issued during the year 27,567 252

Weighted average number of ordinary shares for the year 72,510 44,761

Basic earnings per share 8.62 cent 5.66 cent

Diluted earnings per share

The calculation of diluted earnings per share at 31 December 2007 was based on diluted profit for the financial year attributable to ordinary shareholders of €6,249,000 (2006: €2,532,000) and the weighted number of ordinary shares (diluted) outstanding during the year ended 31 December 2007 of 73,333,661 (2006: 44,761,142) calculated as follows:

2007 2006

€’000 ’000

Diluted Profit for the financial year attributable to ordinary shareholders 6,249 2,532

Weighted average number of ordinary shares (diluted) €’000 ’000

Weighted average number of ordinary shares used in basic calculation 72,510 44,761

Effect of equity instruments with a dilutive effect 824 -

Weighted average number of ordinary shares for the year 73,334 44,761

Diluted earnings per share 8.52 cent 5.66 cent

55



notes

12 (A) Acquisitions of Subsidiaries

€’000 ’000

Net assets acquired (excluding cash) 51,530 9,506

Fair value adjustment - 1,645

Less minority interest (324) (1,436)

Group share of net assets acquired 51,206 9,715

Total consideration including costs of acquisition 169,567 60,307

Cash payment 103,131 53,676

Net debt acquired 452 (5,391)

Deferred consideration 17,820 10,878

Share based payments 44,775 -

Capitalised costs 3,389 1,144

Total consideration 169,567 60,307

The information relating to each individual acquisition is not disclosed as, in the opinion of the Directors, this is considered to be commercially sensitive information.

The deferred consideration relating to acquisitions is recorded at the present value of future payments using a discount rate approximating to cost of funds.

Share based payments relate to the issuance of preference shares in a subsidiary of the Group to the vendors of an acquired company. A put and call agreement has been entered into regarding these shares whereby the vendors can require One51 plc to purchase the shares for cash consideration or consideration in the form of One51 plc ordinary shares

12 (B) Acquisitions of Associates

€’000 ’000

Net assets acquired (excluding cash) 1,120 -

Group share of net assets acquired 1,120 -

Total consideration including costs of acquisition 28,191 -

Cash payment 28,051 -

Capitalised costs 140 -

Total consideration 28,191 -

The information relating to each individual acquisition is not disclosed as, in the opinion of the Directors, this is considered to be commercially sensitive information.

56


notes

13 Intangible Assets (Goodwill)2007 2006

€’000 ’000

Group

Cost

At 1 January 2007 65,509 14,956

Adjustment and reclassification to goodwill (150) (52)

Arising on acquisitions 145,432 50,592

Other - 13

Translation adjustment (2,877) -

At 31 December 2007 207,914 65,509

Amortisation

At 1 January 2007 (576) (576)

Amortisation in year - -

At 31 December 2007 (576) (576)

Net book value 207,338 64,933

13 Intangible Assets (Other)2007 2006

€’000 ’000

Group

Cost

At 1 January 2007 - -

Acquired during the year 2,458 -

At 31 December 2007 2,458 -

Amortisation

At 1 January 2007 - -

Acquired during the year (80) -

Amortisation in year (30) -

At 31 December 2007 (110) -

Net book value 2,348 -

Total intangible assets 209,686 64,933

57



notes

14 Tangible Assets (i) Tangible Fixed Assets (Group) Land and

BuildingsPlant and

MachineryTransportation

Assets Total

’000 ’000 ’000 ’000

Group

Cost / Valuation

At 1 January 2007 58,500 56,898 3,384 118,782

Additions in year 24,106 10,215 2,218 36,539

Relating to acquisitions 19,004 36,240 7,683 62,927

Disposals in year (422) (823) (652) (1,897)

Translation adjustment (856) (710) (14) (1,580)

At 31 December 2007 100,332 101,820 12,619 214,771

Depreciation

At 1 January 2007 1,864 27,138 2,054 31,056

Additions 792 7,599 1,174 9,565

Relating to acquisitions 661 11,735 4,536 16,932

Disposals in year (22) (511) (364) (897)

Translation adjustment (28) (304) (12) (344)

At 31 December 2007 3,267 45,657 7,388 56,312

Net book value

As at 31 December 2007 97,065 56,163 5,231 158,459

As at 31 December 2006 56,636 29,760 1,330 87,726

(i) Tangible Fixed Assets (Company) Land and Buildings

Plant and Machinery

Transportation Assets Total

’000 ’000 ’000 ’000

Company

Cost

At 1 January 2007 22,078 1,884 187 24,149

Additions in year 41 1,568 - 1,609

Transferred to / from subsidiary (22,119) (1,884) (187) (24,190)

At 31 December 2007 - 1,568 - 1,568

Depreciation

At 1 January 2007 - (201) (107) (308)

Additions - (378) (37) (415)

Transferred to / from subsidiary - 579 144 723

At 31 December 2007 - - - -

Net book value

As at 31 December 2007 - 1,568 - 1,568

As at 31 December 2006 22,078 1,683 80 23,841

58


notes

15 Financial Assets (i) Financial Assets Group Company

At 31 December 2007

At 31 December 2006

At 31 December 2007

At 31 December 2006

€’000 ’000 €’000 ’000

Cost as at 1 January 239,387 139,810 237,933 161,527

Additions during the year 49,993 103,225 319,452 76,656

Disposals during the year (1,933) (3,648) (444,988) (250)

Revaluation* 122,156 - - -

Cost / Valuation 409,603 239,387 112,397 237,933

(ii) Investment in Associate and Joint Ventures Group Company

At 31 December 2007

At 31 December 2006

At 31 December 2007

At 31 December 2006

€’000 ’000 €’000 ’000

As at 1 January 5,102 4,714 - -

Additions during the year – share of net assets 1,957 -

Share of operating profits for the year 1,050 888 - -

Less: Group share of associate’s tax

charge for the year 49 (62) - -

Less: Group share of associate’s interest

charge for the year (69) (62) - -

Less: Dividends received from associate (375) (376) - -

Total 7,714 5,102 - -

Total financial assets 417,317 244,489 112,397 237,933

The cost of quoted investments held by the Group at 31 December 2007 is €221 million (2006: €217 million).

*Quoted investments held by the Group at 31 December 2007 were revalued to the lowest price at which the relevant shares traded during the financial year, or from the date of acquisition to the end of the financial year as appropriate, as this basis more accurately reflects the value of these investments.

The change in valuation basis represents a change in accounting policy and gives rise to the revaluation of €122 million (note 24). While such a change of accounting policy would normally give rise to the restatement of the prior year financial statements, the impact of this change in policy on the 2006 financial statements would have resulted in the recognition of a revaluation of €19 million which is not deemed to materially alter the results for 2006 as previously reported and thus no restatement to reflect the change in accounting policy has been made.

59



notes

16 Stocks Group Company

At 31 December 2007

At 31 December 2006

At 31 December 2007

At 31 December 2006

€’000 ’000 €’000 ’000

Raw materials and consumables 5,256 3,632 - -

Finished goods and goods for resale 6,762 505 - -

12,018 4,137 - -

There are no material differences between the replacement cost of stock and the balance sheet amounts.

17 Debtors Group Company

At 31 December 2007

At 31 December 2006

At 31 December 2007

At 31 December 2006

€’000 ’000 €’000 ’000

Amounts falling due within one year

Trade debtors 47,272 23,606 678 346

Amounts owed by group undertakings - - 693,243 97,550

Amounts owed by related parties 12,541 13,723 - 1,808

Prepayments and accrued income 5,388 4,346 - 1,891

Taxes recoverable - - - -

Other debtors 1,225 266 1,128 20

66,426 41,941 695,049 101,615

60


notes

18 Creditors: Amounts falling due within one year

Group Company

At 31 December 2007

At 31 December 2006

At 31 December 2007

At 31 December 2006

€’000 ’000 €’000 ’000

Loans and other borrowings (note 20)

Bank loans and overdrafts 9,827 9,563 - -

Obligations under finance leases

and hire purchase contracts 3,245 1,755 - -

13,072 11,318 - -

Creditors

Trade creditors 29,439 17,522 2,067 442

Other creditors including tax and social welfare 875 3,580 179 -

Amounts owed to group undertakings - - 11,859 13,450

Amounts owed to related parties 66 1,607 - 3,027

Accruals and deferred income 29,304 18,901 4,287 9,032

Deferred consideration 16,388 3,360 7,398 1,481

Taxation 554 1,182 840 845

89,698 57,470 26,630 28,277

19 Creditors: Amounts falling due after more than one year

Group Company

At 31 December 2007

At 31 December 2006

At 31 December 2007

At 31 December 2006

€’000 ’000 €’000 ’000

Loans and other borrowings

Bank loans (note 20) 146,990 64,690 - -

Deferred consideration on acquisition 22,531 8,603 8,609 4,977

169,521 73,293 8,609 -

Trade creditors and accruals (i) 4,685 4,028 - -

Amounts owed to group undertakings - - 26,985 -

Finance lease obligations 1,735 1,960 - -

175,941 79,281 35,594 4,977

(i) Includes CLN interest (see note 4)

61



notes

20 Details of BorrowingsWithin

One YearBetween One

and Two YearsBetween Two

and Five Years Total

’000 ’000 ’000 ’000

Group

Repayable other than by instalments:

Bank overdrafts (i) (9,827) - - (9,827)

Repayable by instalments:

Bank loans (i) - - (146,990) (146,990)

Obligations under finance leases

and similar hire purchase contracts (3,245) (1,735) - (4,980)

(13,072) (1,735) (146,990) (161,797)

(i) The bank loans are secured against certain property and other assets of the Group.

21 Deferred Tax Asset / (Liability)Group Company

’000 ’000

Group

At 1 January 2007 1,010 1,785

(Charged) / credited during year (199) (994)

Acquired during the year (1,624) -

At 31 December 2007 (813) 791

Deferred taxationThe amounts provided for deferred taxation arise from losses forward and temporary timing differences. There are no material unprovided amounts.

22 Capital GrantsGroup Company

At 31 December 2007

At 31 December 2006

At 31 December 2007

At 31 December 2006

€’000 ’000 €’000 ’000

At 1 January 2007 (300) (379) - -

Amortised in year 81 79 - -

At 31 December 2007 (219) (300) - -

62


notes

23 Called up Share CapitalAt 31 December 2007 At 31 December 2006

€’000 ’000

Authorised200,000,000 ordinary shares of €1 each 200,000 200,000

1,800,000 A1 Deferred convertible shares of €1 each 1,800 - 600,000 A2 Deferred convertible shares of €1 each 600 - 600,000 A3 Deferred convertible shares of €1 each 600 - 600,000 A4 Deferred convertible shares of €1 each 600 - 600,000 A5 Deferred convertible shares of €1 each 600 - 600,000 A6 Deferred convertible shares of €1 each 600 - 600,000 A7 Deferred convertible shares of €1 each 600 - 600,000 A8 Deferred convertible shares of €1 each 600 -1,800,000 B1 Deferred convertible shares of €1 each 1,800 - 600,000 B2 Deferred convertible shares of €1 each 600 - 600,000 B3 Deferred convertible shares of €1 each 600 - 600,000 B4 Deferred convertible shares of €1 each 600 - 600,000 B5 Deferred convertible shares of €1 each 600 - 600,000 B6 Deferred convertible shares of €1 each 600 - 600,000 B7 Deferred convertible shares of €1 each 600 - 600,000 B8 Deferred convertible shares of €1 each 600 -1,800,000 C1 Deferred convertible shares of €1 each 1,800 - 600,000 C2 Deferred convertible shares of €1 each 600 - 600,000 C3 Deferred convertible shares of €1 each 600 - 600,000 C4 Deferred convertible shares of €1 each 600 - 600,000 C5 Deferred convertible shares of €1 each 600 - 600,000 C6 Deferred convertible shares of €1 each 600 - 600,000 C7 Deferred convertible shares of €1 each 600 - 600,000 C8 Deferred convertible shares of €1 each 600 -1,800,000 D1 Deferred convertible shares of €1 each 1,800 - 600,000 D2 Deferred convertible shares of €1 each 600 - 600,000 D3 Deferred convertible shares of €1 each 600 - 600,000 D4 Deferred convertible shares of €1 each 600 - 600,000 D5 Deferred convertible shares of €1 each 600 - 600,000 D6 Deferred convertible shares of €1 each 600 - 600,000 D7 Deferred convertible shares of €1 each 600 - 600,000 D8 Deferred convertible shares of €1 each 600 -1,800,000 E1 Deferred convertible shares of €1 each 1,800 - 600,000 E2 Deferred convertible shares of €1 each 600 - 600,000 E3 Deferred convertible shares of €1 each 600 - 600,000 E4 Deferred convertible shares of €1 each 600 - 600,000 E5 Deferred convertible shares of €1 each 600 - 600,000 E6 Deferred convertible shares of €1 each 600 - 600,000 E7 Deferred convertible shares of €1 each 600 - 600,000 E8 Deferred convertible shares of €1 each 600 -

230,000 200,000

63



notes

23 Called up Share Capital (continued)2007 2006

€’000 ’000

Allotted, called up and fully paid

Ordinary shares of €1 each

Opening balance at 1 January 44,943 44,509

Ordinary shares issued during the financial year – CLN conversion 39,362 -

Ordinary shares issued during the financial year – issue of new shares 35,443 434

Closing balance at 31 December 2007 119,748 44,943

Deferred convertible shares of €1 each

Opening balance at 1 January 2007

605,000 A1 Deferred convertible shares of €1 each 605 -






665,500 B1 Deferred convertible shares of €1 each 666 -






732,050 C1 Deferred convertible shares of €1 each 732 -






Closing balance at 31 December 2,526 -

64


notes

23 Called up Share Capital (continued)

Note 23a – Share Placing

At the AGM of One51 plc in August 2007, shareholders gave approval for the raising of up to €200 million by way of an issue of new shares in the Company.

On 12 September 2007 One51 plc wrote to all existing shareholders and CLN holders offering them and their family and friends, the opportunity to subscribe for ordinary shares in One51 plc at a share price of €5.00 per share. The closing date for applications was 5 October 2007 and the offer was subject to scale back provisions.

On 19 October 2007 the Company issued 27,520,554 new ordinary shares to applicants of the share placing.

24 Reserves

Share Premium

Share Based

Payment Reserve

CLN Reserve

Translation Reserves

Profit and Loss Account Total

’000 ’000 ’000 ’000 ’000 ’000

Group

At 1 January 2007 1,086 - 167,834 744 123,953 293,617

Share premium on issue

of new shares 138,517 - - - - 138,517

Transfer on conversion of CLN's 102,210 - (141,571) - - (39,361)

Transfer of accrued CLN interest

to share premium 6,336 - - - - 6,336

Transfer of CLN reserve - - (11) - - (11)

Share based payments reserve - 1,562 - - - 1,562

Revaluation reserve - - - - 122,156 122,156

Foreign exchange translation - - - (7,424) - (7,424)

Defined benefit pension scheme - - - - (1,557) (1,557)

Group share of retained profits

for the year - - - - 6,249 6,249

At 31 December 2007 248,149 1,562 26,252 (6,680) 250,801 520,084

Group 248,149 1,562 26,252 (6,680) 248,988 518,271

Associate - - - - 1,813 1,813

Total 248,149 1,562 26,252 (6,680) 250,801 520,084

65



notes

24 Reserves (continued)

Share Premium

Share Based

Payment Reserve

CLN Reserve

Translation Reserves

Profit and Loss Account Total

’000 ’000 ’000 ’000 ’000 ’000

Company

At 1 January 2007 1,086 - 168,892 - 118,051 288,029

Share premium on issue

of new shares 138,517 - - - - 138,517

Transfer on conversion of CLN's 102,210 - (141,571) - - (39,361)

Transfer of accrued CLN interest

to share premium 6,336 - - - - 6,336

Share based payments reserve - 1,562 - - - 1,562

Retained profit for the year - - - - 231,844 231,844

At 31 December 2007 248,149 1,562 27,321 - 349,895 626,927

25 Reconciliation of Movements in Shareholders’ FundsAt 31 December

2007At 31 December

2006

€’000 ’000

Total recognised gains and losses for the year 119,424 3,276

CLN reserve (141,582) 167,834

Nominal value of shares issued 74,805 434

Share premium on shares issued 247,063 1,086

Deferred convertible share issue 2,526 -

Share award to employees 1,562 -

Reclassification to goodwill - (113)

Net increase in shareholders’ funds 303,798 172,517

Shareholders’ funds at 1 January 338,560 166,043

Shareholders’ funds at 31 December 642,358 338,560

The shareholders’ funds are all attributable to the equity shares.

66

26 Minority Interest2007 2006

€’000 ’000

Minority interest at 1 January 1,938 876

On acquisition (22) 1,435

Share of results for the period 454 (373)

Translation adjustment (187) -

Minority interest at 31 December 2,183 1,938

27 Analysis of Headings Grouped in Cash Flow Statement

€’000 ’000

Profit on ordinary activities before taxation 8,637 4,698

Depreciation and amortisation of tangible fixed assets 9,595 4,993

Interest payable and similar charges 13,678 4,995

Share of operating profit of associated undertakings (1,050) (888)

Gain on disposal of investments (451) (890)

Grants amortised (143) (79)

Loss on disposal of fixed assets 13 -

Share based payment charge 6,151 -

Other operating income (4,818) -

Cash inflow before working capital 31,612 12,829

Decrease / (Increase) in stocks 859 (803)

Decrease / (Increase) in debtors 1,715 (5,386)

Decrease in creditors (8,706) (7,448)

Net cash inflow / (outflow) from operating activities 25,480 (808)

Return on investment and servicing of finance

Interest paid (8,239) (951)

Dividends received 2,468 -

(5,771) (951)

Taxation

Corporation tax paid during the year (3,567) (479)

(3,567) (479)


notes

67



notes

27 Analysis of Headings Grouped in Cash Flow Statement (continued)

€’000 ’000

Related party balances

Increase in related party balances (4,751) (8,132)

(4,751) (8,132)

Capital expenditure and financial investments

Purchases of tangible fixed assets (34,971) (29,591)

Disposal of tangible fixed assets 987 267

Purchases of financial assets (76,199) (98,723)

Disposal of financial assets 2,384 4,540

Dividends from associates 375 -

(107,424) (123,507)

Acquisitions

Cost of acquiring subsidiaries (103,583) (48,285)

Acquisition costs paid (3,389) (1,144)

Deferred consideration paid (3,483) -

(110,455) (49,429)

Financing

Finance lease drawdowns / (repaid) (810) 2,754

Convertible loan notes - 167,834

Share issue 136,150 1,520

135,340 172,108

Decrease in cash (71,148) (11,198)

68


notes

28 Analysis of Changes in Net Debt During the Year

2006 Cash flowsTranslation

Movements 2007

’000 ’000 ’000 €’000

Cash 33,313 13,993 - 47,306

Overdrafts (9,563) 74 (338) (9,827)

Term loans (64,690) (83,950) 1,650 (146,990)

(40,940) (69,883) 1,312 (109,511)

Finance leases (3,715) (1,265) - (4,980)

Net debt (44,655) (71,148) 1,312 (114,491)

29 Commitments

The Group entered into an agreement with two private equity funds to contribute a total of €25 million to investment opportunities as they arise. At the 31 December 2007 contributions had been made totalling €7.33 million to specific investments.

Commitments in relation to contracted capital expenditure at the end of the year amounted to €6.95 million and non capital expenditure commitments amounted to €2.7 million.

Non-cancellable operating leases at the end of the year amounted to €1.26 million.

30 Contingencies

In order to avail of the exemption under Section 17 of the Companies (Amendment) Act, 1986 the Group has guaranteed the liabilities

of its subsidiaries registered in the Republic of Ireland.

31 Bank Security

The Group entered into a five year syndicated bank facility on 15 December 2006 totalling €280 million, subsequently increased

to €440 million in July 2007. These facilities are secured on certain assets of the parent and a number of subsidiary companies.

69



notes

32 Convertible Loan Notes (‘CLN’s’)

The main terms of the CLN's issued on 13 January 2006 and on 20 July 2006 by One51 plc are as follows:

1. Convertible Loan Notes issued on 13 January 2006

1.1 Conversion on an Initial Public Offering or Trade Sale

The noteholders shall be entitled to convert all but not part of their CLN’s (including accrued but unpaid interest) into Ordinary Shares on the notification to them by the Company of the occurrence of one of the following (‘Conversion Event’):

(a) An initial public offering of the shares of the Company; or

(b) The sale of 51% or more of the issued share capital of the Company; or

(c) The sale of the whole or a substantial part of the business and assets of the Company.

The Company will be required to notify the noteholders of their right to convert on the occurrence of any one of the events described above. The noteholders will then have a period of 20 working days from notification to notify the Company of their intention to convert their CLN’s into Ordinary Shares, failing which they will lose forever the right to convert their CLN’s into Ordinary Shares.

1.2 Conversion after Three Years

On the third anniversary of the issue of the CLN’s, each noteholder will become entitled to convert not less than 50% of his CLN’s (including accrued but unpaid interest) into Ordinary Shares, provided that a Conversion Event has not previously occurred. The noteholders will have 60 days from the third anniversary of the issue of the CLN’s to notify the Company of their intention to convert their CLN’s into Ordinary Shares.

1.3 Conversion after Five Years

From the fifth anniversary of the issue of the CLN’s, provided that a Conversion Event has not previously occurred, each noteholder will become entitled to convert not less than 50% of his CLN’s (including accrued but unpaid interest) into Ordinary Shares during the following periods:

(a) a period of 60 days beginning on the fifth anniversary of the issue of the CLN’s;

(b) a period of 14 working days following notification by the Company that it intends to redeem the CLN’s;

(c) 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.

1.4 Redemption

If a Conversion Event has occurred and the noteholder has not elected to convert his CLN’s into Ordinary Shares under paragraph 1.1 above, the right of conversion is lost forever, and the Company shall be entitled to redeem the CLN’s at any time.

If a noteholder does not elect to convert a minimum of 50% of his CLN’s into Ordinary Shares within 60 days of the fifth anniversary of the issue of the CLN’s in accordance with paragraph 1.3 above, the Company shall be entitled to redeem the CLN’s held by that noteholder at any time thereafter.

The Company shall never be required to redeem the CLN’s unless a specified event of default has occurred in relation to the Company.

Payment of any principal and interest in respect of the CLN’s is subordinated to all monies owing in respect of bank debt.

70


notes

32 Convertible Loan Notes (‘CLN’s’) (continued)

1.5 Coupon

Interest will accrue on the principal amount outstanding on the CLN’s from the date of issue at a rate of 4.0% per annum compounded annually in arrears. Interest payments accrued from years one to five inclusive will be rolled-up and will become convertible into Ordinary Shares on the same terms as the principal of the CLN’s. However, if conversion has not occurred by the end of year five, the interest payments from years one to five inclusive shall be payable in cash on the fifth anniversary of the issue of the CLN’s or upon the redemption of the CLN’s if earlier. Interest on the CLN’s accruing after the fifth anniversary of the issue of the CLN’s shall be payable in cash on an annual basis in arrears commencing on the sixth anniversary of the issue of the CLN’s, unless the CLN’s are converted or redeemed prior to this date.

1.6 Conversion Price

The CLN’s are convertible into ordinary shares at a share price of €3.37. As at 31 December 2007 950,991 CLN’s have not been converted.

2. Convertible Loan Notes issued on 20 July 2006

2.1 Conversion on an Initial Public Offering or Trade Sale

Noteholders will be entitled to convert not less than 100% of their CLN’s (including accrued but unpaid interest) into Ordinary Shares on the occurrence of one of the following events (‘Conversion Event’):

(a) An initial public offering of the shares in the Company on a recognised Stock Exchange; or

(b) The sale of 51% or more of the issued share capital of the Company; or

(c) The sale of the whole or a substantial part of the business and assets of the Company; or

(d) A merger transaction pursuant to which the Company issues new shares equal to 50% or greater of the issued share capital of the Company.

The Company will be required to notify the noteholders of their right to convert on the occurrence of any one of the events described above. The noteholders will then have a period of 60 days from notification to notify the Company of their intention to convert their CLN’s into Ordinary Shares.

In the case of a Conversion Event under (d) above, the entitlement to convert will commence 12 months from the date of the merger transaction (but will in any event cease on 30 April 2011).

If a noteholder fails to exercise his / her conversion right on the occurrence of a conversion event, then, in such circumstances the noteholder will not be entitled to convert any of the CLN’s pursuant to paragraph 2.2.

2.2 Conversion at 28 February 2011

On 28 February 2011, provided that a Conversion Event has not previously occurred, each noteholder will become entitled to convert not less than 100% of his CLN’s (including accrued but unpaid interest) into Ordinary Shares. The noteholders will have 60 days from 28 February 2011 to notify the Company of their intention to convert their CLN’s into Ordinary Shares.

2.3 Conversion Prior to 28 February 2011

The Company may (but shall not be obliged to) by Notice in writing to all noteholders invite noteholders to convert all (but not some only) of their CLN’s at certain time(s) prior to 28 February 2011 at the Conversion Price set out in paragraph 2.5.

71


32 Convertible Loan Notes (‘CLN’s’) (continued)

2.4 Redemption

To the extent that a noteholder has not converted all his CLN’s pursuant to paragraphs 2.1 to 2.3 (inclusive) above, then from 30 April 2011 onward the Company will have the option to redeem the CLN’s (including any accrued but unpaid interest) for cash at its absolute discretion. The Company shall never be required to redeem the principal amount of the CLN’s unless a specified event of default has occurred in relation to the Company.

2.5 Conversion Price

The CLN’s are convertible into Ordinary Shares in the Company at a share price of €4.00.

2.6 Coupon

Interest will accrue on the principal amount outstanding on the CLN’s from the date of issue at a rate of 4% compounded annually in arrears. Interest will be rolled up and will become convertible into Ordinary Shares on the same terms as the principal amount of the CLN’s on the occurrence of a Conversion Event or conversion at 28 February 2011. However, if conversion has not occurred by 28 February 2011, the rolled-up interest will become payable in cash at the end of the 60 day notice period following this date. Thereafter, interest will be paid annually in cash in arrears.

As at 31 December 2007 25,300,564 CLN’s have not been converted.

33 Post Balance Sheet Events

On 14 January 2008, the Group acquired the trade and assets of Howarth Metals, a Non Ferrous metal recycling business located in Manchester, United Kingdom.

On 14 January 2008, the Group acquired 100% of the share capital of Howcan Ltd, a Non Ferrous metal recycling business located in Manchester, United Kingdom.

On 14 March 2008, the Group acquired 100% of the share capital of Any Waste Solutions Ltd., a commercial and industrial recycling business located in Maidstone, Kent, United Kingdom. This represents the next step in the Group’s expansion plans into the South East of the United Kingdom.

On 19 March 2008, the Group acquired 100% of the share capital of Ampthill Metal Company Ltd, a Ferrous and Non Ferrous metal recycling business located in Ampthill, Bedfordshire, United Kingdom.


notes

72

34 Pension Information

The disclosures required under Financial Reporting Standard 17 'Retirement Benefits' (FRS 17) are outlined below.

The Group operates a number of defined benefit schemes with assets held in separate trustee administered funds. The two material defined benefit schemes are the One51 plc Pension Scheme and the Irish Pride Bakeries Limited Plan. The date of the most recent full actuarial valuation of these schemes was 1 August 2007.

The valuation of the defined benefit schemes under FRS17 at 31 December 2007 has been based on the results of the most recent full actuarial valuations. These valuations have been updated by an independent actuary to take account of the requirements of FRS17 in order to assess the liabilities at the balance sheet date. Assets are stated at their mid-market value.

FRS 17 Disclosures

The financial assumptions used to calculate the schemes’ liabilities under FRS 17 as at 31 December 2007 were as follows:

Discount rate 5.50%

Inflation rate 2.50%

Salary increases 4.00%

Pension increases 2.75% / 0.00%


notes

The value and distribution of the assets in the schemes, the expected rates of return and the schemes’ liabilities as at 31

December 2007 were:

Expected Return

Asset Distribution

and Value at

31 December 2007

€’000

Equities 7.7% 6,039

Bonds 4.3% 1,884

Property - -

Other - -

Present value of schemes’ assets 7,923

Present value of schemes’ liabilities (7,900)

Net surplus in schemes 23

The financial assumptions used to calculate the schemes’ service costs for the year ended 31 December 2007 were as follows:

Discount rate 4.70%

Inflation rate 2.50%

Salary increases 4.00%

Pension increases 2.75% / 0.00%

73



notes

Movement in Surplus / (Deficit) During the Year: €’000

Surplus at beginning of year 395

Movement in year:

Current service cost (352)

Company contributions 1,180

Past service costs (25)

Settlements and curtailments -

Other finance income 231

Actuarial gain / (loss) (1,406)

Surplus at end of year before deferred tax 23

34 Pension Information (continued)

Service Cost: €’000

Current service cost 352

Past service cost 25

Settlements and curtailments -

Total service costs 377

Analysis of Amounts to be Credited to Other Finance Income: €’000

Interest on schemes’ liabilities 395

Expected return on schemes’ assets (626)

Other finance income (231)

Analysis of Amount to be Recognised in Statement of Recognised Gains and Losses (STRGL): €’000

Actual return less expected return on scheme assets (811)

Experience gains / (losses) on schemes’ liabilities (1,549)

Changes in assumptions 954

Actuarial loss to be recognised in STRGL (1,406)

74


notes

34 Pension Information (continued)

In January 2007, One51 acquired the Resmar group of companies based in Switzerland. The pension regime in Switzerland is governed by Swiss law and each company in the Resmar group operates its own pension plan, commonly referred to as BVG pension plans. As permitted under Swiss law, these pension plans have been contracted to an independent professional pension fund operated by a large Swiss insurance company until 2010. Under these contracts the obligations of the employer is limited to the contributions payable into the pension fund, except in the case of non temporary deficits where both the employer and the employee may jointly contribute to eliminate this situation. While these plans have the attributes of a Defined Contribution pension scheme, the Swiss Auditing Chamber’s Auditing Practice committee and its Accounting Practice subcommittee have issued guidance that these schemes should be regarded as defined benefit schemes for the purpose of accounting under International Accounting Standard ('IAS') 39.

While One51 does not report under IAS, as the requirements of FRS20 are similar to IAS 39, One51 has accounted for these schemes as defined benefit schemes in the financial statements for the year to 31 December 2007 by the inclusion of the following in relation to the pension plans operated by the Resmar Group:

€’000

Actuarial loss on Group defined benefit pension schemes 151

Service cost for the year to 31 December 2007 152

Scheme deficits as at 31 December 2007 388

75



notes

35 Key Operating Subsidiaries, Associates and Joint Ventures

NameRegistered Office

Country of Incorporation Principal ActivityCompany Subsidiary

A1 Metal Recycling i Ireland 100% Metal Recycling

Andrew and Mark Smith Metals Ltd ii United Kingdom 100% Metal Recycling

Cullen Environmental Services Ltd i Ireland 100% Recycling and Treatment

Country Land Ltd iv United Kingdom 100% Property Company

Country Waste Recycling Ltd iv United Kingdom 100% Recycling and Treatment

Enplast Ltd i Ireland 100% Manufacturer of

Polypropylene Sheeting

Foamalite Ltd i Ireland 100% Manufacturer of PVC foam

products

Galway Metal Company Ltd i Ireland 100% Metal Recycling

GEEP Inc.* viii Canada 33.33% Metal and Electronic Recycling

Glassdon Ltd iii Northern Ireland 72.5% Glass and Dry Recycling

Hegarty Metal Processors

(International) Ltd i Ireland 100% Metal Recycling

Irish Pride Bakeries Ltd i Ireland 100% Manufacturing and

Distribution of Bread

Products

One51 Capital Ltd i Ireland 100% Investment Company

One51 Services Ltd i Ireland 100% Management Services

Company

One51 Treasury Services i Ireland 100% Treasury Services Company

Pinilla Ltd i Ireland 100% Intermediate Holding

Company

Plunkett Holdings UK Ltd iv United Kingdom 100% Intermediate Holding

Company

Premier Proteins (2000) Ltd i Ireland 100% Rendering

Protech Performance Plastics Ltd i Ireland 100% Injection Moulding Company

Rambone Ltd ** i Ireland 50% Joint Venture Vehicle

Renore Ltd ** vi Ireland 50% Joint Venture Vehicle Holding

Greenore Port investment

Resmar Ltd i Ireland 100% Intermediate Holding

Company

Resmar Holding AG vii Switzerland 97.5% Electronic Recycling

Reclamet Ltd iv United Kingdom 100% Metal Recycling

Returnbatt Ltd i Ireland 100% Battery Recycling

Proportion Held by

76

notes

35 Key Operating Subsidiaries, Associates and Joint Venture (continued)

NameRegistered Office

Country of Incorporation Principal ActivityCompany Subsidiary

Rilta Environmental Ltd i Ireland 100% Recycling and Treatment

Soils Environmental Services Ltd i Ireland 100% Recycling and Treatment

Tallgrove Properties Ltd iii Northern Ireland 72.5% Property Company

TechRec Ireland Ltd i Ireland 60% Electronic Recycling

TechRec (NI) Ltd v Northern Ireland 90% Electronic Recycling

Thormac Engineering Ltd i Ireland 100% Injection Moulding Company

TS Capital Ltd i Ireland 100% Investment Company

(i) Registered Office is 151 Thomas Street, Dublin 8, Ireland.

(ii) Registered Office is Darbishire Street, Off Waterloo Street, Bolton, BL1 2TN, United Kingdom.

(iii) Registered Office is 52 Creagh Road, Toomebridge, Co. Antrim BT41 3SE, Northern Ireland.

(iv) Registered Office is C/o Andrew and Mark Smith Metals Ltd, Darbishire Street, Off Waterloo Street, Bolton, BL1 2TN United Kingdom.

(v) Registered Office is 110 Trewmont Road, Killyman, Dungannon, Northern Ireland.

(vi) Registered Office is Dublin Port Company, Port Centre, Alexandra Road, Dublin 1, Ireland.

(vii) Registered Office is Bahnstrasse 142, 8105 Regensdorf, Switzerland.

(viii) Registered Office is 220 John Street, Barrie, ONL4N 2L2, Canada.

* Associate ** Joint Ventures

A full list of subsidiaries, associates and joint ventures will be filed with the relevant Registrar of Companies.

The Group has shareholdings of 25.26% and 26.89% in NTR plc and Augean plc respectively. The Group does not exercise significant influence over the operating policies of these entities. Therefore, in the opinion of the Directors, these shareholdings are investments and are treated as financial assets in the financial statements of the Group.

36 Approval of Financial Statements

The Board of Directors approved these financial statements on 3 April 2008.

Proportion Held by


151 Thomas Street, Dublin 8, Ireland T: + 353 1 612 1151 F: + 353 1 612 1210 E: [email protected] www.one51.com

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