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REGISTERED NUMBER: 03519788 (England and Wales)













GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

FOR

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)






CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022




Page

Company Information 1

Group Strategic Report 2

Report of the Directors 4

Report of the Independent Auditors 6

Consolidated Income Statement 10

Consolidated Other Comprehensive Income 11

Consolidated Balance Sheet 12

Company Balance Sheet 13

Consolidated Statement of Changes in Equity 14

Company Statement of Changes in Equity 15

Consolidated Cash Flow Statement 16

Notes to the Consolidated Cash Flow Statement 17

Notes to the Consolidated Financial Statements 19


ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2022







DIRECTORS: K Slingsby
M V Willis
V L Slingsby





SECRETARY: K Slingsby





REGISTERED OFFICE: Unit 3 Potteric Carr Industrial Estate
Potteric Carr Road
Doncaster
South Yorkshire
DN4 5NP





REGISTERED NUMBER: 03519788 (England and Wales)





AUDITORS: D & J Randles Limited
Chartered Accountants
Statutory Auditors
203 Askern Road
Bentley
Doncaster
South Yorkshire
DN5 0JR

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors present their strategic report of the company and the group for the year ended 31 December 2022.

Environmental Speciality Chemicals Limited is the holding company of a number of subsidiaries, associates and investments across the UK and Northern Europe. It aspires to advance water treatment through investment in technological development and skills.

The company formulates speciality chemicals for the control of scale, corrosion and biofouling within industrial and commercial water systems. This provides massive economic and environmental benefits to its customer base throughout Europe.

Products are manufactured in a recently developed production plant based in Poland which is owned by the group. Research, product development and technical support comes from the head office, based in Doncaster.

The current customer base comprises a mix of food and beverage suppliers, petrochemical companies, along with metal production, leisure facilities, hotels and hospitals.

REVIEW OF BUSINESS
The directors aim to present a balanced and comprehensive review of the development and performance of the group during the year and its position at the year end. Our review is consistent with the size and nature of our business and is written in the context of the risks and uncertainties we face.

The directors consider the financial KPI's of the business to be:
· Turnover
· Gross margins
· Operational costs
· Operating profit
· Profit before tax
· Debt levels
· Stock levels

These are monitored on a monthly basis and resultant actions are taken when necessary .

For the year under review, turnover has fallen from £8,819,641 to £7,930,502, a decrease of 10%. Operating profit is £1,139,975 (14.5% of sales) compared to £2,612,628 (29.6% of sales) in 2021. Net profit before tax is £1,104,323 compared to £2,593,335 in 2021. Net assets have reduced from £4,924,501 to £4,100,372 but the directors still consider this to be a very satisfactory state of affairs.

The downturn in results is due to a combination of market pressures and cost increases, most of which were beyond the group's control. However, a significant improvement has taken place in the current year, with most group companies showing an increase in sales of over 20%. A return to previous levels of profitability is therefore expected for 2023.

PRINCIPAL RISKS AND UNCERTAINTIES
The impact of Brexit on the Group was less than anticipated but challenges remain as do the volatility in exchange rates. However, these issues are under constant review from group management so as to minimise disruption to sales and supplies. It also has a hedging strategy to ensure optimal exchange rates.

Any susceptibility by the group's customer and supplier base to political, economic and industrial changes will have an impact on the group. To mitigate this, the group ensures it is not reliant on any one customer, supplier or industry.

The group mitigates financial risk by ensuring close control of cash flow and borrowing.


ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

OTHER KEY PERFORMANCE INDICATORS
In addition to Key Financial Performance Indicators, the directors are also passionate about monitoring non-financial KPI's and promote them at the highest level. The main non-financial KPI's for the group cover the following areas:

· Customer service
· Health and safety compliance
· Environmental issues
· Quality compliance
· Staff welfare
· Development of new products and technologies.

In addition, the directors believe in a commitment to the local community, using local businesses wherever possible.

ON BEHALF OF THE BOARD:





K Slingsby - Director


29 September 2023

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2022.

PRINCIPAL ACTIVITY
The principal activity of the group in the year under review was that of the manufacture and supply of specialist water treatment chemicals.

DIVIDENDS
Details of dividends paid are given in Note 8 to the accounts.

DIRECTORS
The directors during the year under review were:

K Slingsby
R Gulbrandsen
M V Willis
V L Slingsby - appointed 31.12.22

The beneficial interests of the directors holding office on 31 December 2022 in the issued share capital of the company were as follows:
1.1.22
or date of
appointment
31.12.22 if later
"A" Ordinary £1 shares

K Slingsby 4,291 4,291
R Gulbrandsen - -
M V Willis - -
V L Slingsby - -

"B" Ordinary £1 shares

K Slingsby - -
R Gulbrandsen 316 316
M V Willis - -
V L Slingsby - -

DIRECTORS SHAREHOLDINGS
3,975 ordinary B shares are held by Rune Holding AS, a company in which Rune Gulbrandsen is a director and shareholder.
The directors record with great sadness, the death of Rune Gulbrandsen on 12 May 2023.


ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2022

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

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

- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS
The auditors, D & J Randles Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





K Slingsby - Director


29 September 2023

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED

Opinion
We have audited the financial statements of Environmental Speciality Chemicals Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2022 and of the group's profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED


Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
- the parent company financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED


Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
- we identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the Officers and other management (as required by auditing standards).

- we had regard to laws and regulations in areas that directly affect the financial statements including financial reporting and taxation legislation. We considered that extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.

- with the exception of any known or possible non-compliance, and as required by auditing standards, our work in respect of these was limited to enquiry of the Officers.

- we communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

- we addressed the risk of fraud through management override of controls, by testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED


Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.




D F Randles FCA (Senior Statutory Auditor)
for and on behalf of D & J Randles Limited
Chartered Accountants
Statutory Auditors
203 Askern Road
Bentley
Doncaster
South Yorkshire
DN5 0JR

29 September 2023

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

CONSOLIDATED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022

31.12.22 31.12.21
Notes £    £   

TURNOVER 7,930,502 8,819,641

Cost of sales (2,477,143 ) (2,551,946 )
GROSS PROFIT 5,453,359 6,267,695

Administrative expenses (4,563,517 ) (4,021,279 )
889,842 2,246,416

Other operating income 3 250,133 366,212
OPERATING PROFIT 5 1,139,975 2,612,628

Interest receivable and similar income 7,276 3,334
1,147,251 2,615,962

Interest payable and similar expenses 6 (42,928 ) (22,427 )
PROFIT BEFORE TAXATION 1,104,323 2,593,535

Tax on profit 7 (274,764 ) (496,561 )
PROFIT FOR THE FINANCIAL YEAR 829,559 2,096,974
Profit attributable to:
Owners of the parent 694,552 1,847,720
Non-controlling interests 135,007 249,254
829,559 2,096,974

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

CONSOLIDATED
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

31.12.22 31.12.21
Notes £    £   

PROFIT FOR THE YEAR 829,559 2,096,974


OTHER COMPREHENSIVE INCOME
Acquisition of minority interests - (115,285 )
Income tax relating to other comprehensive
income

-

-
OTHER COMPREHENSIVE INCOME
FOR THE YEAR, NET OF INCOME TAX

-

(115,285

)
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

829,559

1,981,689

Total comprehensive income attributable to:
Owners of the parent 694,552 1,732,435
Non-controlling interests 135,007 249,254
829,559 1,981,689

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

CONSOLIDATED BALANCE SHEET
31 DECEMBER 2022

31.12.22 31.12.21
Notes £    £   
FIXED ASSETS
Intangible assets 10 1,669,821 1,757,706
Tangible assets 11 1,297,357 1,405,307
Investments 12 171,671 237,185
3,138,849 3,400,198

CURRENT ASSETS
Stocks 13 863,038 741,508
Debtors 14 1,965,464 1,484,082
Cash at bank and in hand 197,995 1,187,019
3,026,497 3,412,609
CREDITORS
Amounts falling due within one year 15 (1,926,446 ) (1,676,082 )
NET CURRENT ASSETS 1,100,051 1,736,527
TOTAL ASSETS LESS CURRENT
LIABILITIES

4,238,900

5,136,725

CREDITORS
Amounts falling due after more than one
year

16

(137,658

)

(207,195

)

PROVISIONS FOR LIABILITIES 19 (870 ) (5,029 )
NET ASSETS 4,100,372 4,924,501

CAPITAL AND RESERVES
Called up share capital 20 8,582 8,582
Share premium 1,372,368 1,372,368
Retained earnings 2,878,281 3,526,433
SHAREHOLDERS' FUNDS 4,259,231 4,907,383

NON-CONTROLLING INTERESTS (158,859 ) 17,118
TOTAL EQUITY 4,100,372 4,924,501

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2023 and were signed on its behalf by:





K Slingsby - Director


ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

COMPANY BALANCE SHEET
31 DECEMBER 2022

31.12.22 31.12.21
Notes £    £   
FIXED ASSETS
Intangible assets 10 - -
Tangible assets 11 345,688 345,699
Investments 12 2,523,410 2,592,066
2,869,098 2,937,765

CURRENT ASSETS
Stocks 13 9,884 20,084
Debtors 14 927,654 473,505
Cash at bank 62 197,059
937,600 690,648
CREDITORS
Amounts falling due within one year 15 (1,091,977 ) (567,792 )
NET CURRENT (LIABILITIES)/ASSETS (154,377 ) 122,856
TOTAL ASSETS LESS CURRENT
LIABILITIES

2,714,721

3,060,621

CREDITORS
Amounts falling due after more than one
year

16

(27,459

)

(34,487

)

PROVISIONS FOR LIABILITIES 19 (8,271 ) (8,909 )
NET ASSETS 2,678,991 3,017,225

CAPITAL AND RESERVES
Called up share capital 20 8,582 8,582
Share premium 1,372,368 1,372,368
Retained earnings 1,298,041 1,636,275
SHAREHOLDERS' FUNDS 2,678,991 3,017,225

Company's profit for the financial year 1,004,469 1,042,000

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2023 and were signed on its behalf by:




K Slingsby - Director


ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022

Called up
share Retained Share
capital earnings premium
£    £    £   

Balance at 1 January 2021 8,582 2,896,687 1,372,368

Changes in equity
Dividends - (1,102,689 ) -
Total comprehensive income - 1,732,435 -
Balance at 31 December 2021 8,582 3,526,433 1,372,368

Changes in equity
Dividends - (1,342,704 ) -
Total comprehensive income - 694,552 -
Balance at 31 December 2022 8,582 2,878,281 1,372,368
Non-controlling Total
Total interests equity
£    £    £   

Balance at 1 January 2021 4,277,637 32,917 4,310,554

Changes in equity
Dividends (1,102,689 ) (265,053 ) (1,367,742 )
Total comprehensive income 1,732,435 249,254 1,981,689
Balance at 31 December 2021 4,907,383 17,118 4,924,501

Changes in equity
Dividends (1,342,704 ) (310,985 ) (1,653,689 )
Total comprehensive income 694,552 135,007 829,559
Balance at 31 December 2022 4,259,231 (158,860 ) 4,100,371

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022

Called up
share Retained Share Total
capital earnings premium equity
£    £    £    £   

Balance at 1 January 2021 8,582 1,696,964 1,372,368 3,077,914

Changes in equity
Dividends - (1,102,689 ) - (1,102,689 )
Total comprehensive income - 1,042,000 - 1,042,000
Balance at 31 December 2021 8,582 1,636,275 1,372,368 3,017,225

Changes in equity
Dividends - (1,342,703 ) - (1,342,703 )
Total comprehensive income - 1,004,469 - 1,004,469
Balance at 31 December 2022 8,582 1,298,041 1,372,368 2,678,991

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022

31.12.22 31.12.21
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 1,318,154 2,644,454
Interest paid (37,579 ) (18,415 )
Interest element of hire purchase payments
paid

(5,349

)

(4,012

)
Government grants - 100,347
Tax paid (386,906 ) (438,505 )
Net cash from operating activities 888,320 2,283,869

Cash flows from investing activities
Purchase of tangible fixed assets (55,036 ) (184,656 )
Purchase of fixed asset investments (7,789 ) -
Sale of tangible fixed assets 47,043 47,852
Acquisition of minority interests - (115,285 )
Interest received 7,276 3,334
Net cash from investing activities (8,506 ) (248,755 )

Cash flows from financing activities
New loans in year - 94,224
Bank and Other loan repayments (78,365 ) (67,320 )
Hire purchase repayments (21,265 ) (15,357 )
Amount introduced by directors 7,364 5,744
Amount withdrawn by directors (147,276 ) (138,954 )
Equity dividends paid (1,342,704 ) (1,102,689 )
Dividends paid to minority interests (310,984 ) (265,503 )
Net cash from financing activities (1,893,230 ) (1,489,855 )

(Decrease)/increase in cash and cash equivalents (1,013,416 ) 545,259
Cash and cash equivalents at beginning of
year

2

1,187,019

641,760

Cash and cash equivalents at end of year 2 173,603 1,187,019

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
31.12.22 31.12.21
£    £   
Profit before taxation 1,104,323 2,593,535
Depreciation charges 243,732 234,862
Profit on disposal of fixed assets (10,559 ) (17,252 )
Exchange differences on fixed assets (32,487 ) 68,769
Impairment of unlisted investments 76,445 -
Government grants - (100,347 )
Finance costs 42,928 22,427
Finance income (7,276 ) (3,334 )
1,417,106 2,798,660
Increase in stocks (121,530 ) (82,047 )
(Increase)/decrease in trade and other debtors (246,464 ) 26,940
Increase/(decrease) in trade and other creditors 269,042 (99,099 )
Cash generated from operations 1,318,154 2,644,454

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2022
31.12.22 1.1.22
£    £   
Cash and cash equivalents 197,995 1,187,019
Bank overdrafts (24,392 ) -
173,603 1,187,019
Year ended 31 December 2021
31.12.21 1.1.21
£    £   
Cash and cash equivalents 1,187,019 641,760


ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022

3. ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

At 1.1.22 Cash flow At 31.12.22
£    £    £   
Net cash
Cash at bank and in hand 1,187,019 (989,024 ) 197,995
Bank overdrafts - (24,392 ) (24,392 )
1,187,019 (1,013,416 ) 173,603
Debt
Finance leases (67,426 ) 21,265 (46,161 )
Debts falling due within 1 year (436,330 ) 10,193 (426,137 )
Debts falling due after 1 year (205,830 ) 68,172 (137,658 )
(709,586 ) 99,630 (609,956 )
Total 477,433 (913,786 ) (436,353 )

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1. STATUTORY INFORMATION

Environmental Speciality Chemicals Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill
In order to comply with the requirements of Financial Reporting Standard 102, goodwill arising on consolidation is now being amortised over its estimated useful life of 25 years, with effect from the year ended 31 December 2017.

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.
Freehold property - 2% on cost
Plant and machinery - 33% on cost
Fixtures and fittings - 15% on reducing balance
Motor vehicles - 25% on reducing balance
Computer equipment - 33% on cost and 33% on reducing balance

Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

2. ACCOUNTING POLICIES - continued
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

3. OTHER OPERATING INCOME
31.12.22 31.12.21
£    £   
Sundry receipts 224,127 258,068
Government grants - 100,347
Exchange gains 26,006 7,797
250,133 366,212

4. EMPLOYEES AND DIRECTORS
31.12.22 31.12.21
£    £   
Wages and salaries 2,444,156 2,375,385
Social security costs 297,343 256,884
Other pension costs 166,223 150,708
2,907,722 2,782,977

The average number of employees during the year was as follows:
31.12.22 31.12.21

Staff members 72 71

31.12.22 31.12.21
£    £   
Directors' remuneration 103,600 105,600
Directors' pension contributions to money purchase schemes 2,201 2,197

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31.12.22 31.12.21
£    £   
Hire of plant and machinery 92,067 106,074
Depreciation - owned assets 140,117 129,989
Depreciation - assets on hire purchase contracts 15,730 16,988
Profit on disposal of fixed assets (10,559 ) (17,252 )
Goodwill amortisation 87,885 87,885
Auditors' remuneration 7,950 7,650
Auditors' remuneration for non audit work 9,749 10,202
Foreign exchange differences (5,085 ) 27,157

Auditors remuneration represents the charges for auditing the group accounts and those of the parent company.

6. INTEREST PAYABLE AND SIMILAR EXPENSES
31.12.22 31.12.21
£    £   
Bank interest 25,541 18,415
Other loan interest 12,038 -
Hire purchase 5,349 4,012
42,928 22,427

7. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
31.12.22 31.12.21
£    £   
Current tax:
UK corporation tax 278,863 488,959
Previous years adjustment - (86 )
Total current tax 278,863 488,873

Deferred tax (4,099 ) 7,688
Tax on profit 274,764 496,561

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

7. TAXATION - continued

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

31.12.22 31.12.21
£    £   
Profit before tax 1,104,323 2,593,535
Profit multiplied by the standard rate of corporation tax in the UK of 19 %
(2021 - 19 %)

209,821

492,772

Effects of:
Expenses not deductible for tax purposes 32,569 526
Depreciation in excess of capital allowances 14,429 16,766
enhanced deduction
Overseas taxation & exchange rate differences 17,945 (13,503 )
Total tax charge 274,764 496,561

Tax effects relating to effects of other comprehensive income

There were no tax effects for the year ended 31 December 2022.

31.12.21
Gross Tax Net
£    £    £   
Acquisition of minority interests (115,285 ) - (115,285 )

8. INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.


9. DIVIDENDS
31.12.22 31.12.21
£    £   
"A" Ordinary shares of £1 each
Interim 679,648 559,619
"B" Ordinary shares of £1 each
Interim 663,056 543,070
1,342,704 1,102,689

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

10. INTANGIBLE FIXED ASSETS

Group
Goodwill
£   
COST
At 1 January 2022
and 31 December 2022 2,197,131
AMORTISATION
At 1 January 2022 439,425
Amortisation for year 87,885
At 31 December 2022 527,310
NET BOOK VALUE
At 31 December 2022 1,669,821
At 31 December 2021 1,757,706

11. TANGIBLE FIXED ASSETS

Group
Freehold Long Plant and
property leasehold machinery
£    £    £   
COST
At 1 January 2022 937,974 248,799 299,872
Additions - - 10,334
Disposals - - -
Exchange differences 28,454 - 8,227
At 31 December 2022 966,428 248,799 318,433
DEPRECIATION
At 1 January 2022 146,574 - 226,619
Charge for year 22,510 - 32,547
Eliminated on disposal - - -
Exchange differences 2,605 - 6,203
At 31 December 2022 171,689 - 265,369
NET BOOK VALUE
At 31 December 2022 794,739 248,799 53,064
At 31 December 2021 791,400 248,799 73,253

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

11. TANGIBLE FIXED ASSETS - continued

Group

Fixtures
and Motor Computer
fittings vehicles equipment Totals
£    £    £    £   
COST
At 1 January 2022 330,337 366,200 107,683 2,290,865
Additions 36,572 - 8,130 55,036
Disposals (23,640 ) - (54,150 ) (77,790 )
Exchange differences 3,734 1,740 - 42,155
At 31 December 2022 347,003 367,940 61,663 2,310,266
DEPRECIATION
At 1 January 2022 201,811 272,758 37,796 885,558
Charge for year 59,008 27,745 14,037 155,847
Eliminated on disposal (23,640 ) - (17,666 ) (41,306 )
Exchange differences 2,274 1,728 - 12,810
At 31 December 2022 239,453 302,231 34,167 1,012,909
NET BOOK VALUE
At 31 December 2022 107,550 65,709 27,496 1,297,357
At 31 December 2021 128,526 93,442 69,887 1,405,307

Depreciation is not provided in land included within Freehold Property and Long Leasehold land.

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:
Motor
vehicles
£   
COST
At 1 January 2022
and 31 December 2022 93,079
DEPRECIATION
At 1 January 2022 42,118
Charge for year 15,730
At 31 December 2022 57,848
NET BOOK VALUE
At 31 December 2022 35,231
At 31 December 2021 50,961

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

11. TANGIBLE FIXED ASSETS - continued

Company
Fixtures
Long Plant and and
leasehold machinery fittings
£    £    £   
COST
At 1 January 2022 248,799 1,968 79,714
Additions - - 24,572
Disposals - - (5,283 )
At 31 December 2022 248,799 1,968 99,003
DEPRECIATION
At 1 January 2022 - 1,968 47,615
Charge for year - - 3,912
Eliminated on disposal - - (5,283 )
At 31 December 2022 - 1,968 46,244
NET BOOK VALUE
At 31 December 2022 248,799 - 52,759
At 31 December 2021 248,799 - 32,099

Motor Computer
vehicles equipment Totals
£    £    £   
COST
At 1 January 2022 93,079 39,703 463,263
Additions - 1,117 25,689
Disposals - (15,519 ) (20,802 )
At 31 December 2022 93,079 25,301 468,150
DEPRECIATION
At 1 January 2022 42,118 25,863 117,564
Charge for year 15,730 6,058 25,700
Eliminated on disposal - (15,519 ) (20,802 )
At 31 December 2022 57,848 16,402 122,462
NET BOOK VALUE
At 31 December 2022 35,231 8,899 345,688
At 31 December 2021 50,961 13,840 345,699

Depreciation is not provided on long leasehold land.

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

11. TANGIBLE FIXED ASSETS - continued

Company

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:
Motor
vehicles
£   
COST
At 1 January 2022
and 31 December 2022 93,079
DEPRECIATION
At 1 January 2022 42,118
Charge for year 15,730
At 31 December 2022 57,848
NET BOOK VALUE
At 31 December 2022 35,231
At 31 December 2021 50,961

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

12. FIXED ASSET INVESTMENTS

Group

Unlisted
investments
£
COST
At 1 January 2022 237,185
Additions 7,789
Provision for impairment (76,445 )
Currency gain 3,142

At 31 December 2022 171,671

NET BOOK VALUE
At 31 December 2022 171,671

At 31 December 2021 237,185

The group's unlisted investments comprise interests in Tarn-Pure Holdings Ltd and Aquanoah AS.

Company

The cost of the company's investments in the shares of group and related undertakings is represented by the following investments which are listed below.

The countries of incorporation and the name of the company and the percentages owned by the parent company are as follows:

Poland - ESC Global Sp.Zo.o - 90.00%
Poland - Global Concepts 2000 Polska Sp.Zo.o - 80.00%
Norway - Global Concept Mitco AS - 100.00%, which also owns 100% of Aquanoah AS, also registered in Norway together with 40% of Green Aquacare AS, another Norwegian company.
Sweden - Global Concept Sverige AB - 81.27% (2020 - 70%)
United Kingdom - ESC Global Ltd - 100.00%
United Kingdom - Global Water Test Kits Ltd (Dormant) - 100.00%
Republic of Ireland - Environmental Speciality Chemicals Ltd (Dormant) - 100%
United Kingdom - Tarn-Pure Holdings Ltd (15%)
United Kingdom - Wentworth Park Shoot Ltd (33.33%)

13. STOCKS

Group Company
31.12.22 31.12.21 31.12.22 31.12.21
£    £    £    £   
Stocks 863,038 741,508 9,884 20,084

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

14. DEBTORS

Group Company
31.12.22 31.12.21 31.12.22 31.12.21
£    £    £    £   
Amounts falling due within one year:
Trade debtors 1,086,738 1,004,171 7,601 7,780
Amounts owed by group undertakings - - 211,822 154,194
Other debtors 305,217 140,730 217,248 33,685
Directors' loan accounts 364,003 216,727 364,003 216,727
Prepayments 120,614 122,454 35,515 52,913
VAT - - 2,573 8,206
1,876,572 1,484,082 838,762 473,505

Amounts falling due after more than one year:
Taxation recoverable 88,892 - 88,892 -

Aggregate amounts 1,965,464 1,484,082 927,654 473,505

15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
31.12.22 31.12.21 31.12.22 31.12.21
£    £    £    £   
Bank loans and overdrafts (see note 17) 143,219 131,447 235,261 10,000
Other loans (see note 17) 307,310 304,883 307,501 304,883
Hire purchase contracts (see note 18) 46,161 66,061 44,796 55,644
Trade creditors 397,235 308,017 20,481 11,468
Amounts owed to group undertakings - - 124,745 10,802
Tax 152,026 172,367 118,841 49,949
Social security and other taxes 145,486 87,677 8,042 10,212
VAT 156,848 158,979 - -
Other creditors 178,241 113,009 164,892 72,256
Directors' loan accounts 13,238 5,874 13,238 5,874
Accruals and deferred income 386,682 327,768 54,180 36,704
1,926,446 1,676,082 1,091,977 567,792

16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR

Group Company
31.12.22 31.12.21 31.12.22 31.12.21
£    £    £    £   
Bank loans (see note 17) 137,658 205,830 27,459 34,487
Hire purchase contracts (see note 18) - 1,365 - -
137,658 207,195 27,459 34,487

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

17. LOANS

An analysis of the maturity of loans is given below:

Group Company
31.12.22 31.12.21 31.12.22 31.12.21
£    £    £    £   
Amounts falling due within one year or on demand:
Bank overdrafts 24,392 - 227,879 -
Bank loans 118,827 131,447 7,382 10,000
Other loans 307,310 304,883 307,501 304,883
450,529 436,330 542,762 314,883
Amounts falling due between one and two years:
Bank loans - 1-2 years 59,008 72,126 10,000 10,000
Amounts falling due between two and five years:
Bank loans - 2-5 years 78,650 133,704 17,459 24,487

18. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group
Hire purchase contracts
31.12.22 31.12.21
£    £   
Net obligations repayable:
Within one year 46,161 66,061
Between one and five years - 1,365
46,161 67,426

Company
Hire purchase contracts
31.12.22 31.12.21
£    £   
Net obligations repayable:
Within one year 44,796 55,644

Company
Non-cancellable operating leases
31.12.22 31.12.21
£    £   
Between one and five years 57,500 87,500

The operating lease agreements relate to land and buildings.

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

19. PROVISIONS FOR LIABILITIES

Group Company
31.12.22 31.12.21 31.12.22 31.12.21
£    £    £    £   
Deferred tax 870 5,029 8,271 8,909

Group
Deferred
tax
£   
Balance at 1 January 2022 5,029
Credit to Income Statement during year (4,159 )
Balance at 31 December 2022 870

Company
Deferred
tax
£   
Balance at 1 January 2022 8,909
Credit to Income Statement during year (638 )
Balance at 31 December 2022 8,271

20. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31.12.22 31.12.21
value: £    £   
4,291 "A" Ordinary £1 4,291 4,291
4,291 "B" Ordinary £1 4,291 4,291
8,582 8,582

21. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to a director subsisted during the years ended 31 December 2022 and 31 December 2021:

31.12.22 31.12.21
£    £   
K Slingsby
Balance outstanding at start of year 216,727 77,773
Amounts advanced 247,276 216,727
Amounts repaid (100,000 ) (77,773 )
Amounts written off - -
Amounts waived - -
Balance outstanding at end of year 364,003 216,727

The loan to Mr Slingsby has been subject to interest at the Official Rate.

ENVIRONMENTAL SPECIALITY CHEMICALS
LIMITED (REGISTERED NUMBER: 03519788)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2022

22. RELATED PARTY DISCLOSURES

The company owes £307,501 (2021 - £304,883) to Rune Holdings AS, a company in which R Gulbrandsen, a director, has an interest. The loan is interest free and there is no fixed date for repayment. The company also owes Rune Holdings AS £164,892 (2021- £72,256) on current account, which is shown in other creditors.
Dividends paid and payable to Rune Holdings AS amounted to £614,226 (2021 - £503,077).

23. ULTIMATE CONTROLLING PARTY

Following the death of Mr R Gulbrandsen, the Ultimate Controlling Party is Mr K Slingsby.