NOTES TO THE UK GAAP PARENT COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2008

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1 1. SIGNIFICANT ACCOUNTING POLICIES BASIS OF PREPARATION The Company s fi nancial statements are prepared on the historical cost basis, except for derivative fi nancial instruments which are stated at their fair value, and in accordance with applicable UK accounting standards. The fi nancial statements have been prepared on a going concern basis, for the reasons outlined in the Finance Review on page 24. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Company s fi nancial statements. PROFIT AND LOSS ACCOUNT Under Section 230 (4) of the Companies Act 1985, the Company is exempt from the requirement to present its own profi t and loss account. RELATED PARTY TRANSACTIONS As the parent company of the British Polythene Industries PLC Group (the fi nancial statements for which can be found on pages 45 to 70, the Company has taken advantage of the exemption contained in FRS 8 and has therefore not disclosed transactions or balances with entities which form part of the Group. FOREIGN CURRENCIES Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary assets and liabilities carried at historical cost that are denominated in foreign currencies are translated at the rates prevailing at the date when the historical cost was determined. Gains and losses arising on retranslation are included in the profi t and loss account for the year. TAXATION The Company s tax charge is based on the result for the year and tax rates in force during the year. Estimation of the tax charge requires an assessment to be made of the potential tax treatment of certain items which will only be resolved once fi nally agreed with the relevant tax authorities. DEFERRED TAXATION Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19. A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suffi cient taxable profi ts from which the future reversal of the underlying timing differences can be deducted. INVESTMENTS Investments are stated at cost less provisions for any impairment. DERIVATIVE FINANCIAL INSTRUMENTS Certain derivative fi nancial instruments are designated as hedges in line with the Company s treasury policy. Hedges are classifi ed as follows: Fair value hedges that hedge the exposure to changes in the fair value of a recognised asset or liability. Cash fl ow hedges that hedge exposure to variability in cash fl ows that is either attributable to a particular risk associated with a recognised asset or liability or a forecast transaction. For fair value hedges, any gain or loss from remeasuring the hedging instrument at fair value is recognised in the profi t and loss account. Any gain or loss on the hedged item attributable to the hedged risk is adjusted against the carrying amount of the hedged item and similarly recognised in the profi t and loss account. For cash fl ow hedges, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge, as defi ned by FRS 26, is recognised in equity, with any ineffective portion recognised in the profi t and loss account. When hedged cash fl ows result in the recognition of a non fi nancial asset or liability, the associated gains or losses previously recognised in equity are included in the initial measurement of the asset or liability. For all other cash fl ow hedges, the gains or losses that are recognised in equity are transferred to the profi t and loss account in the same period in which the hedged cash fl ows affect the profi t and loss account. Any gains or losses arising from changes in fair value of derivative fi nancial instruments not designated as hedges are recognised in the profi t and loss account. When a hedging instrument is sold, terminated or exercised, or the entity revokes designation of the hedge relationship but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and is recognised in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss recognised in equity is recognised immediately in the profi t and loss account. FINANCIAL GUARANTEE CONTRACTS Where the Company enters into fi nancial guarantee contracts to guarantee the indebtedness of other companies within the Group, the Company considers these to be insurance arrangements, and accounts for them as such. In this respect, the Company treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee. SHARE-BASED PAYMENTS The fair value of employee share options granted is calculated at grant date and the resulting cost is charged to the profi t and loss account over the vesting period of the options with a corresponding increase in equity. The value of the charge is adjusted to refl ect expected and actual levels of options vesting. Failures to vest as a result of market conditions are not reversed. TREASURY SHARES When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a change in equity. Repurchased shares are classifi ed as treasury shares and presented as a deduction from profi t and loss reserves. 72 FINANCIAL STATEMENTS

2 PROVISIONS AND CONTINGENT LIABILITIES In accordance with FRS 12 Provisions, Contingent Liabilities and Contingent Assets, provisions are recognised where there is a present obligation as a result of a past event, it is probable that a transfer of economic benefi ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If these conditions are not met, no provision is recognised. However, contingent liabilities are disclosed in the Notes to the Financial Statements, unless the possibility of a transfer of economic benefi ts is remote. Contingent gains are not recognised unless realisation of the profi t is virtually certain. DIVIDENDS PAYABLE Dividends payable to the Company s shareholders are recorded as a liability in the period in which the dividends are approved. RETIREMENT BENEFIT OBLIGATIONS The Company participates in a group-wide scheme, the British Polythene Pension Scheme, which has a defi ned benefi t section (providing benefi ts based on fi nal pensionable pay) and a defi ned contribution section. The assets of the scheme are held separately from those of the Company. The pension costs for the defi ned contribution section are charged to the profi t and loss account on the basis of contributions due in respect of the fi nancial year. In relation to the defi ned benefi t section of the scheme, the Company is unable to identify its share of the underlying assets and liabilities on a consistent and reliable basis and therefore, as required by FRS 17, the Company accounts for this scheme as a defi ned contribution scheme. As a result, the amount charged to the profi t and loss account in respect of the defi ned benefi t section represents the contributions payable to the scheme in respect of the year. 2. STAFF COSTS AVERAGE NUMBER OF EMPLOYEES Administration EMPLOYEE COSTS Wages and salaries Social security costs Other pension costs Wages and salary costs are inclusive of any redundancy costs. Disclosures regarding Directors remuneration, share-based payments and pension entitlements are included on pages 37 to FIXED ASSET INVESTMENTS SUBSIDIARY UNDERTAKINGS EQUITY NON-EQUITY INVESTMENTS TOTAL SHARES AT COST LESS PROVISIONS At 31 December Additions in the year AT 31 DECEMBER SUBSIDIARY UNDERTAKINGS Except as indicated below, the Company owns the whole issued share capital of all subsidiary undertakings. The principal subsidiary undertakings are as follows: COMPANY COUNTRY OF INCORPORATION TRADE British Polythene Limited England Polythene Manufacturer AT Films Inc* Canada Polythene Manufacturer BPI plc England Property Company BPI Europe BV* Netherlands Holding Company Combipac BV* Netherlands Polythene Manufacturer Formipac France SA* France Distribution Company Irish Polythene Industries Limited Republic of Ireland Distribution Company Venture Hong Kong Limited (75% owned)* Hong Kong Holding Company Xinhui Alida Polythene Limited + China Polythene Manufacturer * Shares held through an intermediate holding company + 20% owned through a subsidiary undertaking FINANCIAL STATEMENTS 73

3 4. DEBTORS Trade debtors Amounts due by subsidiary undertakings Prepayments and accrued income 0.4 Other debtors Group relief receivable BANK AND OTHER BORROWINGS: AMOUNTS FALLING DUE WITHIN ONE YEAR Bank overdrafts Other loan OTHER CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Trade creditors 0.1 Other taxes and social security Accruals and deferred income Other creditors Amounts due to subsidiary undertakings BANK AND OTHER BORROWINGS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR Bank loans Other loan CALLED UP SHARE CAPITAL AUTHORISED Equity 80,227,336 (2007: 80,227,336) ordinary shares of 25p each ALLOTTED CALLED UP AND FULLY PAID Equity 26,498,160 (2007: 26,498,160) ordinary shares of 25p each FINANCIAL STATEMENTS

4 9. SHARE PREMIUM ACCOUNT M AT 31 DECEMBER 2008 AND 31 DECEMBER OTHER RESERVES M MERGER RESERVE At 31 December 2008 and 31 December CAPITAL REDEMPTION RESERVE At 31 December 2008 and 31 December CAPITAL RESERVE At 31 December 2008 and 31 December TOTAL OTHER RESERVES AT 31 DECEMBER 2008 AND 31 DECEMBER PROFIT AND LOSS ACCOUNT At 1 January Profi t for the fi nancial year Dividends paid (5.8) (5.8) Decrease in own shares held FRS 20 charge in relation to equity settled transactions AT 31 DECEMBER The profi t after taxation for the year amounted to 1.9 million (2007: 0.7 million). 12. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS FUNDS OPENING SHAREHOLDERS FUNDS Profi t for the fi nancial year Dividends paid (5.8) (5.8) New shares subscribed (net of expenses) Decrease in own shares held FRS 20 charge in relation to equity settled transactions NET MOVEMENT IN SHAREHOLDERS FUNDS (3.5) (5.2) CLOSING SHAREHOLDERS FUNDS FINANCIAL STATEMENTS 75

5 13. OWN SHARES HELD COST OF OWN SHARES HELD At 1 January Shares purchased 0.3 AT 31 DECEMBER The cost of own shares held represents shares held by the British Polythene Industries Employee Share Ownership Trust to satisfy the Company s liabilities under the restricted share plan and the long-term incentive plan. The market value of the shares is 0.5 million (2007: 0.7 million). DATE OF AVERAGE DATE OF AVERAGE PURCHASE / PURCHASE NUMBER PURCHASE/ PURCHASE NUMBER ALLOCATION PRICE OF SHARES ALLOCATION PRICE OF SHARES MOVEMENTS IN THE NUMBERS OF SHARES HELD At 1 January 260, ,456 No of shares allocated to employees 3/3/06 (4,000) Various (89,625) Shares purchased Various ,000 AT 31 DECEMBER 256, , DIVIDENDS AMOUNTS RECOGNISED AS DISTRIBUTIONS TO EQUITY HOLDERS IN THE YEAR: Final dividend for the year ended 31 December 2007 of 15.0p per share (2006: 15.0p) Interim dividend for the year ended 31 December 2008 of 7.0p per share (2007: 7.0p) Proposed fi nal dividend for the year ended 31 December 2008 of 7.5p per share (2007: 15.0p) The proposed fi nal dividend is to be approved by shareholders at the Annual General Meeting on 14 May 2009 and has not been included as a liability as at 31 December CONTINGENT LIABILITIES The Company has guaranteed the bank overdrafts of certain subsidiaries amounting at 31 December 2008 to 10.9 million (2007: 14.1 million) including interest from time to time thereon. The Company also has an obligation under the Group VAT registration amounting at 31 December 2008 to 2.7 million (2007: 4.3 million). 16. SHARE-BASED PAYMENTS The Company considers the IFRS 2 Group disclosures found at Note 30 to the consolidated fi nancial statements to satisfy all FRS 20 disclosure requirements. 17. PENSIONS DEFINED CONTRIBUTION SCHEMES The assets of the defi ned contribution section of the British Polythene Pension Scheme and other defi ned contribution schemes are held separately from those of the Group, being invested with a number of insurance companies. The pension charge includes contributions payable to the various insurance companies. DEFINED BENEFIT SCHEME The Company is a member of a larger group wide pension scheme providing benefi ts based on pensionable pay. As the Company is unable to identify its share of the scheme assets and liabilities on a reliable and consistent basis, as permitted by FRS 17 Retirement benefi ts, the scheme is accounted for as if it were a defi ned contribution scheme. The Company made contributions of 0.2 million (2007: 0.2 million) in the year. There were no outstanding or prepaid Company contributions at either the beginning or the end of the fi nancial year. The assets of the defi ned benefi t section are invested in a self-administered trust fund and hence are also separated from the Group s business assets. FRS 17 DISCLOSURES The Company considers the IAS 19 Group disclosures found at Note 31 to the consolidated fi nancial statements to satisfy all FRS 17 disclosure requirements. 76 FINANCIAL STATEMENTS