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REGISTERED NUMBER: 01532065 (England and Wales)















Strategic Report, Report of the Director and

Financial Statements for the Year Ended 31 December 2023

for

Fine Organics Limited

Fine Organics Limited (Registered number: 01532065)






Contents of the Financial Statements
for the Year Ended 31 December 2023




Page

Company Information 1

Strategic Report 2

Report of the Director 6

Statement of Director's Responsibilities 10

Report of the Independent Auditors 11

Statement of Comprehensive Income 14

Statement of Financial Position 15

Statement of Changes in Equity 16

Notes to the Financial Statements 17


Fine Organics Limited

Company Information
for the Year Ended 31 December 2023







DIRECTOR: Y Xue
T M J Bollaert





REGISTERED OFFICE: Seal Sands
Middlesbrough
Cleveland
TS2 1UB





REGISTERED NUMBER: 01532065 (England and Wales)





AUDITORS: Shinewing Wilson Accountancy Limited
Chartered Certified Accountants
and Statutory Auditors
9 St Clare Street
London
EC3N 1LQ

Fine Organics Limited (Registered number: 01532065)

Strategic Report
for the Year Ended 31 December 2023

The director presents his strategic report for the year ended 31 December 2023.

REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS
During the year ended 31 December 2023 the business's revenue has risen by 37% to £67,038K (2022: £48,925K) following a prolonged construction and commissioning of a new facility and postponement of a manufacturing campaign, leading to significant periods of plant idle time. Following the increase in revenue and decrease of impairment, the Company profit have increased to £54,637K (2022: loss of £218,530K) in terms of EBITDA (earnings before interest, tax, depreciation and amortisation), the measure used by the Board of directors and investors to track financial performance.

The Company's profit before taxation for the financial year is £54,753K (2022: loss before taxation £218,483K).

Despite the increase in revenues and profitability, there were several challenges during the year relating to commissioning of a new expanded manufacturing facility. Following successful commissioning of the new plant in Q1 2023, production unfortunately had to cease in mid-Q2 owing to a breach of our emissions permits as a result of technical challenges in operating the new plant. During the shutdown window, we successfully implemented new technologies to manage our emissions challenges, as well as making improvements to achieve the design capacity of the plant.

Having restarted the plant in Q3 2023, we received the unfortunate news that the customer was withdrawing all future demand for production in the new facility. As a result, we entered a period of restructuring to address the new business reality the site was facing. The restructuring activities concluded in January 2024, impacting around 60 heads in total after completion.

Despite these challenges, the Company has made a positive response in 2024. During Q1, the business successfully reached agreement on a mutual termination of the product contract, a significant milestone which allows the site to freely utilise the assets to attract new business. In parallel, we have been focusing on business development activities to engage those assets. As a result of this development, the Company has entered into a new manufacturing agreement, utilising some of the new asset base. The business still has a stable and expanding customer base with which it works technically to implement innovative chemistry solutions in order to drive process efficiencies and optimal performance from its manufacturing assets.

Following an extensive review of the strategic positioning of all sites within the group, the investors are satisfied with the direction and on-going investment of the business. The company is well placed to take advantage of any upturn in the Agrochemical markets, as well as expansion across all other market sectors served.

The financial position of the company as at the year-end is net liabilities of £168,425K (2022: £223,062K).

PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the execution of the company's strategy are subject to a number of risks. The main risks and uncertainties are as follows:

- Pricing: competition in the company's portfolio is based primarily on price, with additional weighting being placed on product quality, reliability of supply and customer service.

- Raw material and energy prices: these are significant costs to the business. Mitigation of this exposure is actioned by wherever practicable by procuring on a global basis.

- Utilisation of assets: the Company's results are materially influenced by the degree to which assets are utilised in order to achieve maximum production volumes.

- Ukraine conflict: following the outbreak of the conflict in Ukraine the business has acknowledged price risks, particularly with regards to gas and electricity. As such, the business continues to work with its energy consultant, energy suppliers and its customers to ensure the appropriate actions are taken to minimise the impact to the business.


Fine Organics Limited (Registered number: 01532065)

Strategic Report
for the Year Ended 31 December 2023

SECTION 172(1) STATEMENT
The Companies (Miscellaneous Reporting) Regulations 2018 ('2018 MRR') require directors to explain how they considered the interests of key stakeholders and the broader matters set out in section 172(1) (A) to (F) of the Companies Act 2006 ('S172') when performing their duty to promote the success of the Company under S172. This includes considering the interest of other stakeholders which will have an impact on the long-term success of the company. This S172 statement explains how the directors:

- have engaged with employees, suppliers, customers and others; and

- have had regard to employee interests, the need to foster the company's business relationships with suppliers, customers and other, and the effect of that regards, including on the principal decisions taken by the company during the financial year.

The S172 statement focuses on matters of strategic importance, and the level of information disclosed is consistent with the size and the complexity of the business.

When making decisions, each Director ensures that he/she acts in the way he/she considers, in good faith, would most likely promote the Company's success for the benefit of its members as a whole, and in doing so have regard (among other matters) to:

S172(1) (A) "The likely consequences of any decision in the long term"
The company's operations, including its sales, manufacturing and investment plans for the year, are set out through the annual budget. This is prepared by the company's senior leadership team and approved by the board of the ultimate parent company and is aligned with the long-term plans for the Site within the context of the overall group strategy. This can be demonstrated by the company's response to the shifting customer demand and contract terminations as described on page 2 above.

In addition to reporting on the financials through the monthly management accounts, the board of directors is kept informed of operational matters through monthly reports compiled by the senior leadership team. This report includes, but is not limited to, manufacturing performance, safety statistics and quality metrics.

The board takes a view on long-term decisions based on commercial enquiries, research and development activities and thereafter the appropriate financial and analytical modelling, which it receives in the form of detailed proposals presented by the senior leadership team to the board and subsequently to the ultimate parent company. This could include, but not be limited to, new product development, acquisition opportunities and strategic partnerships.

S172(1) (B) "The interests of the company's employees"
The directors recognise that the company's employees are fundamental and core to our business and delivery of our strategic ambitions. The success of our business depends on attracting, retaining and motivating employees. From ensuring that we remain a responsible employer, from pay and benefits to our health, safety and workplace environment, the directors factor the implications of decisions on employees and the wider workforce, where relevant and feasible.

The directors also recognise that in supporting the long-term sustainability and strategy of the site, there has been a need to make some employees redundant as noted in page 2 above. Where possible, all efforts were made to evaluate those at risk for alternative positions to retain as many employees as possible. Where this was not possible, the business has worked through the redundancy process, following a constructive consultation process, with designated representatives elected by employees and where appropriate in conjunction with site Trade Union officials. For those affected, support has been offered by way of counselling and by engaging our recruitment partners and local businesses in search of opportunities.

The board of directors' support significant levels of investment in training, online learning, paid-for external development, and the hosting of internal learning events. This sits alongside a generous benefits package which includes pension contributions above the statutory minimum requirement and an annual bonus scheme.

The board of directors recognises the importance of having a diverse workforce that both reflects the company's global supply chain network, and which strengthens its business growth. The business is committed to promoting fairness and equality in the workplace which it demonstrates through a number of policies, including: Equal Opportunities Policy; Flexible Working Policy; Parental Leave Policy; and Maternity, Paternity and Adoption Policies.


Fine Organics Limited (Registered number: 01532065)

Strategic Report
for the Year Ended 31 December 2023

S172(1) (C) "The need to foster the company's business relationships with suppliers, customers and others"
Delivering our strategy requires strong mutually beneficial relationships with suppliers, customers, local and national government, regulators and other associated stakeholders.

Moreover, the directors receive information updates on a variety of topics that indicate and inform how these stakeholders have been engaged. These range from information provided from the supply chain function (on suppliers related to items such as sourcing project updates and supplier contract management topics) to information provided by the commercial and development teams (on customers related to items such as business strategies, on-going manufacturing campaigns and investment or divestment proposals).

In its relationship with suppliers, the company strives to maintain a reputation for fairness and high standards through striving for contracts that provide mutual benefit, and ensuring that suppliers are paid on time.

The company has a zero-tolerance to human trafficking and slavery and expects its suppliers to take the same approach. The board of directors has approved the publication of the company's Modern Slavery Act statement and will support the senior leadership team in its review of its policies and procedures to ensure continued compliance.

In its relationship with customers, feedback can be collated by the several teams and fed back to the directors, mainly by the Commercial Directors, whose primary focus is customer engagement, management and communication. Specifically, with regard to contract manufacturing agreements, our customers have a direct contribution toward the supply chain, technical development and quality parameters of our finished products, integration of customer feedback is a key input for site operations.

S172(1) (D) "The impact of the company's operations on the community and the environment"
The directors recognise that the business has a significant responsibility when it comes to its relationship with the environment. The site is Top-Tier COMAH (Seveso III) compliant, has a broad environmental permit and similarly has extensive consents in place to allow us to handle a broad range of substances at a range of scales. A key consideration for the business in this respect is with regards to its chemical substance waste management. The site has direct pipeline access to one of the largest municipal liquid aqueous waste disposal facilities in Europe, and works closely with its sister company Fine Environmental Services Limited, who operate one of only three, third party licensed, high temperature thermal oxidisers for incineration of other waste streams. The business continues to work with its regulators in maintaining compliance and striving for best practice where environmental impact is concerned.

S172(1) (E) "The desirability of the company maintaining a reputation for high standards of business conduct"
The directors recognise that the business operates within an industry where a high degree of emphasis is placed on ensuring business decisions are economically, environmentally and socially responsible. The company periodically reviews its policies and principles, as set out in the company Staff Handbook and other guiding documentation, to ensure that these high standards are maintained. This, complemented by the ways the board is informed and monitors compliance with relevant governance standards help assure its decisions are taken and that the company acts in a way that promotes high standards of business conduct.

S172(1) (F) "The need to act fairly as between members of the company"
The directors consider which course of action best enables delivery of our strategy through the long-term, taking into consideration the impact on stakeholders. In doing so, our directors act fairly as between the Company's members but are not required to balance the Company's interest with those of other stakeholders, and this can sometimes mean that certain stakeholder interests may not be fully aligned.


Fine Organics Limited (Registered number: 01532065)

Strategic Report
for the Year Ended 31 December 2023

KEY PERFORMANCE INDICATORS
The key performance indicators of the company were as follows:

31 December 2023 31 December 2022 Change
£'000 £'000
Turnover 67,038 48,925 37%+
Gross profit 19,674 465 4,131%+
Operating profit / (loss) 28,287 (218,288) 112%-
Lost time injury rate (based on 1m man hours) 0.00 0.00

As at 31 December 2023, the Company had net current liabilities amounts to £210,615K (2022: £192,364K) and net liabilities amounts to £168,425K (2022: £223,062K) respectively, these are mainly due to impairment review of the tangible fixed assets.

In conjunction with the management of costs and working capital to improve profit, the Company uses a number of KPIs to monitor performance. These KPIs are monitored both on a product-by-product basis and also for the Company as a whole, compared to budget.

ON BEHALF OF THE BOARD:





T M J Bollaert - Director


25 September 2024

Fine Organics Limited (Registered number: 01532065)

Report of the Director
for the Year Ended 31 December 2023

The director presents his report with the financial statements of the company for the year ended 31 December 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of a manufacturer of fine chemicals, supplying the pharmaceutical, agrochemical and speciality chemical industry. The Company's manufacturing plant is in the UK and has customers in Europe, North America, South America, and the UK.

DIVIDENDS
No dividends will be distributed for the year ended 31 December 2023 (2022: Nil).

RESEARCH AND DEVELOPMENT
The company's research and development activities are focused on the safe implementation of new products coupled with improving plant efficiency, optimisation of plant productivity, reducing waste and improving environmental performance, satisfying both our customers and all stakeholders.

EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

Y Xue
T M J Bollaert

Other changes in directors holding office are as follows:

L P Kingsbury - resigned 12 May 2023

FINANCIAL RISK MANAGEMENT
The company's operations expose it to a variety of financial risks that include the effects of changes in price risk, credit risk and liquidity risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company where appropriate.

Price risk
The Company is exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. The company has no exposure to equity securities price risk as it holds no listed or other equity investments.

Credit risk
The Company has implemented policies that require appropriate credit checks on potential customers before sales are made. Where debt finance is utilised, this is subject to pre-approval by the board of directors.

Liquidity risk
The Company actively manages its risk profile on a regular basis to ensure the company has sufficient available funds for operations and planned expansions.

Cashflow risk
The business actively manages it's cash flow with the assistance of the group's treasury department, seeking to effectively manage working capital and minimise exposure to foreign exchange movements.


Fine Organics Limited (Registered number: 01532065)

Report of the Director
for the Year Ended 31 December 2023

ENGAGEMENT WITH EMPLOYEES
Disabled Employees
The group is committed to employment policies, where following best practice, based on equal opportunities for all employees, irrespective of sex, race, colour, disability or marital status. The group gives full and fair consideration to applications for employment for disabled persons, having regard to their particular aptitudes and abilities. Appropriate arrangements are made for the continued employment and training, career development and promotion of disabled persons employed by the group. If members of staff become disabled the group continues employment, either in the same or an alternative position, with appropriate retraining being given where necessary.

Employee Involvement
The group systematically provides employees with information on matters of concern to them, consulting them or their representatives regularly, so that their views can be taken into account when making decisions that are likely to affect their interests. Employee involvement in the group is encouraged, as achieving a common awareness on the part of all employees of the financial and economic factors affecting the group plays a major part in maintaining its effective management.

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS
The Company engages with its stakeholders regularly to inform its decision making and assist in delivering our long term strategies. In respect of its customers, the Company seeks to build long term, stable relationships by collaborating on technical development, supply chain and quality decisions with regards to the services provided. The Company maintains a stable supplier base and seeks local suppliers to fulfil its requirements where possible. When it is appropriate, the Company also collaborates with its customers to fulfil its supply needs and, in all cases, will work closely with suppliers to ensure quality and delivery standards are met.

STREAMLINED ENERGY AND CARBON REPORTING
Introduction
Our environmental performance information is presented in accordance with the Streamlined Energy and Carbon Reporting ("SECR") Guidance (March 2019), as specified under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013. Data is presented for our financial year, from 1 January through to 31 December, and includes information on our most significant environmental aspects: energy consumption and associated greenhouse gas ("GHG") emissions; and waste generation.

We are actively seeking ways to reduce our impact on the environment and build resilience to climate change by focusing on energy, waste and water. These three focus areas have been identified based on an overall evaluation of environmental impacts and risks, with a focus on impacts that we can influence.

The company presents its energy usage as below:

Our greenhouse gas emissions
Year ended 31 December
2023
Year ended 31December
2022
kWh tCO2e kWh tCO2e
Scope 1 Energy and Emissions 77,580,922 14,252 88,843,007 16,261
Scope 2 Energy and Emission 24,876,118 5,151 13,128,801 2,539
102,457,040 19,404 101,971,808 18,800

Total Reactor Hours Occupied
Intensity Metric, TRHO 577,080 577,080 474,768 474,768
Intensity per TRHO 177.544 0.034 241.782 0.040

SECR Methodology
Below is a brief outline of the methodology used to produce the various figures and identified opportunities for Fine Organics Ltd.

Data Collection
Data was collected as follows:

Utility Data: This was collected from energy suppliers in the form of HH data or NHH consumption summary reports and invoics.

Fine Organics Limited (Registered number: 01532065)

Report of the Director
for the Year Ended 31 December 2023


Other Fuels: These were collected from automatic metering.

Carbon Conversion
To perform the carbon conversion, we utilised the Government conversion factors for company reporting of greenhouse gas emissions found here:
https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting

To report the greenhouse gas emissions associated with an organization's activities, the carbon emissions need to be converted into 'activity data' such as:
- distance travelled
- litres of fuel used
- tonnes of waste disposed

The conversion factor spreadsheets provide the values to be used for such conversions, and step by step guidance on how to use them.

A new set of conversion factors are published each year, together with a methodology paper explaining how the conversion factors are derived, and a paper explaining the major changes in the latest year's factors. All of which can be found following the Link above.

Energy Intensity
The Energy intensity metric utilised this year for Fine Organics is the total reactor hours occupied/kWh.

Identified Opportunities
The following opportunities were identified on site.

The Directors are committed to reducing greenhouse gas emissions and monitor opportunities for energy savings where possible. The following opportunities have been identified:

Energy Conservation Measures
Opportunity
Value

Investment

ROI

kWh Saving
tCO2
Reduction
Energy Policy & Energy
Management Systems

£37,644

£21,000

0.56

396,488

76.8
Staff Training & Awareness
Material

£37,644

£7,000

0.19

396,488

76.8
Automated Monitoring &
Targeting

£75,287

£47,568

0.63

792,975

153.7
Boiler 1 & 2 Economisers £99,699 £120,000 1.20 2,215,530 405.3
Boiler Blowdown Heat Recovery £19,940 £24,000 1.20 443,106 81.1
Lighting & Lighting Controls
Upgrades

£8,465

£56,000

6.62

54,260

11.2
High Efficiency Motor Upgrades £266,216 £605,750 2.28 1,706,512 353.4
Variable Speed Drive Upgrades £762,574 £535,000 0.70 4,888,292 1,012.2
Air Compressor Exhaust Heat
Recovery

£39,770

£120,000

3.02

883,768

161.7
Compressed Air Leak Detection
& Repairs

£87,074

£40,000

0.46

558,169

115.6
Transformer Upgrades & Voltage
Optimisation

£135,072

£700,000

5.18

865,845

179.3
Space Heating Upgrades £5,847 £10,000 1.71 37,478 7.8
Total £1,575,229 £2,286,318 1.45 13,238,909 2,634.8

DISCLOSURE IN THE STRATEGIC REPORT
The company has chosen to disclose information regarding the future development opportunities in the strategic report rather than the directors' report.

Fine Organics Limited (Registered number: 01532065)

Report of the Director
for the Year Ended 31 December 2023


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

AUDITORS
The auditors, Shinewing Wilson Accountancy Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





T M J Bollaert - Director


25 September 2024

Fine Organics Limited (Registered number: 01532065)

Statement of Director's Responsibilities
for the Year Ended 31 December 2023

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

Report of the Independent Auditors to the Members of
Fine Organics Limited

Opinion
We have audited the financial statements of Fine Organics Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and 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 101 'Reduced Disclosure Framework' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
- give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
- have been properly prepared in accordance with United Kingdom adopted International Financial Reporting Standards (IFRSs); 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 company 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.

Material uncertainty related to going concern
We draw attention to the "Going concern" section of note 2 to the financial statements. This note states that the Company incurred a profit before tax of £54,753K during the year (2022: loss £218,483K), and had net current liabilities of £210,615K (2022: £192,364K) and net liabilities of £168,425K (2022: £223,062K) as at the balance sheet date comprising principally of an amount owed to its intermediate parent. The Company is therefore dependent on its ultimate parent's support. Although we consider that the statements that are made in note 2 are fair, it is our opinion that the note should also state that these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a 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.

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 director is responsible for the other information. The other information comprises the information in the Strategic Report, the Report of the Director and the Statement of Director's Responsibilities, 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 Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
Fine Organics Limited


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

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, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of director's remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of director
As explained more fully in the Statement of Director's Responsibilities set out on page ten, the director is 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 director determines 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 director is responsible for assessing the 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Report of the Independent Auditors to the Members of
Fine Organics 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:

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity:
- Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.
- Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include environmental regulations, health and safety legislation, employment law, and General Data Protection Regulation (GDPR).

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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.

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.




Nijendra Dhungana (Senior Statutory Auditor)
for and on behalf of Shinewing Wilson Accountancy Limited
Chartered Certified Accountants
and Statutory Auditors
9 St Clare Street
London
EC3N 1LQ

26 September 2024

Fine Organics Limited (Registered number: 01532065)

Statement of Comprehensive Income
for the Year Ended 31 December 2023

31.12.23 31.12.22
Notes £'000 £'000 £'000 £'000

TURNOVER 4 67,038 48,925

Cost of sales 47,364 48,460
GROSS PROFIT 19,674 465

Distribution costs 372 390
Administrative expenses (8,885 ) 218,712
(8,513 ) 219,102
28,187 (218,637 )

Other operating income 5 100 349
OPERATING PROFIT/(LOSS) 28,287 (218,288 )

Exceptional items 7 27,234 -
55,521 (218,288 )


Interest payable and similar expenses 8 768 195
PROFIT/(LOSS) BEFORE TAXATION 9 54,753 (218,483 )

Tax on profit/(loss) 10 116 47
PROFIT/(LOSS) FOR THE FINANCIAL
YEAR

54,637

(218,530

)


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

54,637

(218,530

)

Fine Organics Limited (Registered number: 01532065)

Statement of Financial Position
31 December 2023

31.12.23 31.12.22
Notes £'000 £'000 £'000 £'000
FIXED ASSETS
Owned
Tangible assets 11 42,186 1,039
Right-of-use
Tangible assets 11, 17 95 36
42,281 1,075

CURRENT ASSETS
Inventory 12 52,086 30,996
Debtors 13 16,937 13,442
Cash at bank and in hand 3,386 1,938
72,409 46,376
CREDITORS
Amounts falling due within one year 14 283,024 238,740
NET CURRENT LIABILITIES (210,615 ) (192,364 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

(168,334

)

(191,289

)

CREDITORS
Amounts falling due after more than one
year

15

91

31,773
NET LIABILITIES (168,425 ) (223,062 )

CAPITAL AND RESERVES
Called up share capital 18 1 1
Share premium 47 47
Capital redemption reserve 120 120
Other reserves - IFRS16 (120 ) (120 )
Retained earnings (168,473 ) (223,110 )
SHAREHOLDERS' FUNDS (168,425 ) (223,062 )

The financial statements were approved by the director and authorised for issue on 25 September 2024 and were signed by:





T M J Bollaert - Director


Fine Organics Limited (Registered number: 01532065)

Statement of Changes in Equity
for the Year Ended 31 December 2023

Called up
share Retained Share
capital earnings premium
£'000 £'000 £'000
Balance at 1 January 2022 1 (4,580 ) 47

Changes in equity
Total comprehensive income - (218,530 ) -
Balance at 31 December 2022 1 (223,110 ) 47

Changes in equity
Total comprehensive income - 54,637 -
Balance at 31 December 2023 1 (168,473 ) 47
Capital Other
redemption reserves Total
reserve - IFRS16 equity
£'000 £'000 £'000
Balance at 1 January 2022 120 (120 ) (4,532 )

Changes in equity
Total comprehensive income - - (218,530 )
Balance at 31 December 2022 120 (120 ) (223,062 )

Changes in equity
Total comprehensive income - - 54,637
Balance at 31 December 2023 120 (120 ) (168,425 )

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements
for the Year Ended 31 December 2023

1. STATUTORY INFORMATION

Fine Organics 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 Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. ACCOUNTING POLICIES

Basis of preparation
These financial statements have been prepared in accordance with Financial Reporting Standard 101 "Reduced Disclosure Framework" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The company is a subsidiary of a larger group. The ultimate parent undertaking Lianhe Chemical Technology Co.Limited, is the smallest and largest group to consolidate the Company's financial statements. Ultimate parent consolidated financial statements continue to be prepared under Chinese GAAP, and the English version of these consolidated financial statements can be obtained from their registered office at No. 8 Yongjiao Road, Huangyan Economic Development Zone, Taizhou City, Zhejiang, P. R. China, 318020.

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework":

the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;
the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of
IFRS 16 Leases;
the requirements of paragraph 58 of IFRS 16;
the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134 to
136 of IAS 1;
the requirements of IAS 7 Statement of Cash Flows;
the requirements of paragraphs 88C and 88D of IAS 12 Income Taxes;
the requirements of paragraph 74(b) of IAS 16;
the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into
between two or more members of a group.

Going concern
The Company made a significant profit before tax of £54,753K during the year as result of exceptional items such as creditors written back and reversal of impairment, and had net current liabilities of £210,615K and net liabilities of £168,425K. At the year ended 31 December 2023 the company owed amount of £254,105K to group undertakings, which the group undertakings confirmed they seek no repayment until the Company has the ability to do so. Furthermore the ultimate parent company has confirmed that it will financially support the whole UK group for at least 18 months from the date of signing these financial statements. The management also considered the post balance sheet events described in the strategic report and Note 22 to the financial statements and no significant impact considered on the going concern basis. Based on this, the directors have concluded that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company therefore continues to adopt the going concern basis in preparing its financial statements.

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Turnover
The Company adopted IFRS 15 "Revenue from contracts with customers". IFRS 15 establishes the principles that an entity applies when reporting information about the nature, amount, timing and uncertainty of revenue and cash flows from a contract with a customer.

To recognise revenue under IFRS 15, the Company applies the following five steps:

- identify the contract(s) with a customer.
- identify the performance obligations in the contract.
- determine the transaction price, which is normally agreed in advance.
- allocate the transaction price to each performance obligation on the basis of each stage of product processing, which is promised in the contract.
- recognise revenue when a performance obligation is satisfied. A performance obligation is satisfied at the point when a quality control of the product is proved, product is ready to be delivered and invoice is subsequently issued.

Tangible fixed assets
Tangible fixed assets are stated at historic purchase cost less accumulated depreciation. The cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is calculated so as to write off the cost of a fixed asset on a straight line basis over its estimated useful economic life, taking into account any contractual relationships, using the following rates:

Freehold land - not depreciated
Freehold building - maximum of 25 years
Plant and machinery - maximum 10 years
Right of use assets - between 2-6 years
Construction in progress - not depreciated until completion and fully in use

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined with is the higher of its fair value less costs to sell and its value in use. An impairment loss or gain is recognised in the profit or loss account. The assets residual values, useful lives and depreciation methods are reviewed and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Financial instruments
Financial assets at amortised cost
The company’s financial assets measured at amortised cost comprise trade and other debtors and cash and cash equivalents in the balance sheet. Cash and cash equivalents includes cash in hand, deposits held at call with banks.

Financial liabilities
The company does not have any liabilities held for trading nor does it voluntarily classify any financial liabilities as being at fair value through profit or loss.

Trade creditors and other short-term monetary liabilities, which are initially recognised at fair value and are subsequently carried at amortised cost using the effective interest method.

Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

Share capital
Financial instruments issued by the company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset.

The company's ordinary shares are classified as equity instruments.

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the weighted average principle and includes expenditure incurred in acquiring the inventories and other costs in bringing them to their existing location and condition.

Where necessary, provision is made to reduce the cost to no more than net realisable value having regard to the nature and condition of inventory as well as anticipated utilisation and saleability.

Taxation
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the statement of financial position date.

Deferred tax is recognised in respect of all taxable temporary differences that have originated but not reversed at the balance sheet date where transactions that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. An asset is not recognised to the extent that the transfer of economic benefits in the future is uncertain. Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences are expected to reverse based on tax rates and laws that have been substantially enacted by the balance sheet date. Deferred tax assets and liabilities which have been recognised have not been discounted.

Research and development
Expenditure on research and development is written off in the year in which it is incurred.


Foreign currencies
Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Non-monetary items would never be retranslated. 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.

Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Leases
Leases are recognised as finance leases. The lease liability is initially recognised at the present value of the lease payments which have not yet been made and subsequently measured under the amortised cost method. The initial cost of the right-of-use asset comprises the amount of the initial measurement of the lease liability, lease payments made prior to the lease commencement date, initial direct costs and the estimated costs of removing or dismantling the underlying asset per the conditions of the contract.

Where ownership of the right-of-use asset transfers to the lessee at the end of the lease term, the right-of-use asset is depreciated over the asset’s remaining useful life. If ownership of the right-of-use asset does not transfer to the lessee at the end of the lease term, depreciation is charged over the shorter of the useful life of the right-of-use asset and the lease term.

The company leases various equipment and vehicles. Rental contracts are typically made for fixed periods of 3 to 5 years. If the contracts contain both lease and non-lease components, the Company allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.
At the inception of a contract, the Group assesses whether a contract is, or contains, a lease.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's weighted average incremental borrowing rate. The lease term comprises the non-cancellable period of the contract, together with periods covered by an option to extend the lease where the Company is reasonably certain to exercise that option. The lease liability is measured by increasing the carrying amount to reflect interest on the lease liability, and reducing it by the lease payments made. The lease liability is remeasured when the Company changes its assessment of whether it will exercise an extension or termination option.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

The Company presents right-of-use assets separately as 'Lease right of use assets' and lease liabilities as 'Trade and other payables' in the statement of financial position.

Employee benefit costs
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate.

Exceptional
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial performance of the company. They are items that are material either because of their size or their nature, or that are nonrecurring are considered as exceptional items and are presented within the line items to which they best relate.

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of the accounting policies and reported amounts of assets and liabilities, revenue and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are reasonable under the circumstances. Revisions to accounting estimates are recognised in the year in which the estimates are revised and in any future years affected.

a. Useful economic lives of property, plant and equipment
The annual depreciation charge (Note 10) for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

b. Fixed assets impairment
Management assesses whether there are any losses in the carrying value of the fixed assets (Note 11). As a first step the Company compares the carrying value to the recoverable value of the fixed assets as at 31 December 2023. If the recoverable value is below the carrying value, then the Company may perform a valuation of the fixed assets by using a discounted cash flow analysis. If this valuation still indicates a need for a write down, the Company reduces the carrying value of the fixed assets accordingly. The determination whether the fixed assets need to be impaired including assumptions about the profitability of the underlying business and growth, which involves management's estimates.

4. TURNOVER

The turnover and profit (2022 - loss) before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

31.12.23 31.12.22
£'000 £'000
United Kingdom 12,636 12,680
United States of America 26,319 22,941
South America 16,736 2,722
Asia 4,514 1,092
Europe (Excludes UK) 6,833 9,490
67,038 48,925

5. OTHER OPERATING INCOME
31.12.23 31.12.22
£'000 £'000
Misc income - 249
Government grants 100 100
100 349

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

6. EMPLOYEES AND DIRECTORS
31.12.23 31.12.22
£'000 £'000
Wages and salaries 13,235 11,849
Social security costs 1,345 1,258
Other pension costs 1,178 1,042
15,758 14,149

The average number of employees during the year was as follows:
31.12.23 31.12.22

Operations 299 289
Administration 28 30
Research and development 26 17
353 336

31.12.23 31.12.22
£    £   
Directors' remuneration 160,775 354,869
Directors' pension contributions to money purchase schemes 26,714 76,307

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 2 2

7. EXCEPTIONAL ITEMS
31.12.23 31.12.22
£'000 £'000
Exceptional items 27,234 -

Exceptional items represent the reversal of deferred income of £31.6M (Note 15) as result of the termination agreement signed between FMC and Fine Organic Limited on 24 April 2024 and net off with £4.40M provision provided for intercompany debtors.

8. INTEREST PAYABLE AND SIMILAR EXPENSES
31.12.23 31.12.22
£'000 £'000
Bank interest 759 191
Leasing 9 4
768 195

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

9. PROFIT/(LOSS) BEFORE TAXATION

The profit before taxation (2022 - loss before taxation) is stated after charging/(crediting):
31.12.23 31.12.22
£'000 £'000
Cost of inventories recognised as expense 47,364 48,460
Depreciation - owned assets 329 6,572
Depreciation - assets on hire purchase contracts or finance leases 62 69
Auditors' remuneration 67 56
Auditors' remuneration for non audit work 5 5
Foreign exchange differences 145 (733 )

10. TAXATION

Analysis of tax expense
31.12.23 31.12.22
£'000 £'000
Current tax:
Tax 116 47
Total tax expense in statement of comprehensive income 116 47

Factors affecting the tax expense
The tax assessed for the year is lower (2022 - higher) than the standard rate of corporation tax in the UK. The difference is explained below:

31.12.23 31.12.22
£'000 £'000
Profit/(loss) before income tax 54,753 (218,483 )
Profit/(loss) multiplied by the standard rate of corporation tax in the UK of
23.520% (2022 - 19%)

12,878

(41,512

)

Effects of:
Expenses not deductible for tax purposes 1,039 3
Tax on R+D expenditure credit (61 ) 47
Amounts not recognised (13,740 ) 41,509
Tax expense 116 47

The Company has not recognised deferred tax assets as at 31 December 2023 of £47.6mil (2022: £62.6mil). This has not been recognised in the financial statements due to uncertainty over the future income streams required from the potential asset to be recovered.

In the Spring Budget 2021 it was announced that the main UK corporation tax rate would increase from 19% to 25% from 1 April 2023. This rate increase was substantively enacted as part of the Finance Act 2021 on 24 May 2021 and has now taken effect. Accordingly, the company¡¯s profits are taxed at an effective rate of 23.52% for the year ended 31 December 2023 (19% for year ended 31 December 2022), and future profits will be taxed at a rate of 25%. Deferred tax at the balance sheet date has been calculated at 25% (2022: 25%), as this was the tax rate substantively enacted at the year end.

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

11. TANGIBLE FIXED ASSETS
Freehold Short Plant and
property leasehold machinery Totals
£'000 £'000 £'000 £'000
COST
At 1 January 2023 1,107 675 66,019 67,801
Additions - 121 10,248 10,369
At 31 December 2023 1,107 796 76,267 78,170
DEPRECIATION
At 1 January 2023 69 639 66,018 66,726
Charge for year 9 62 320 391
Impairments - - 3,972 3,972
Reversal of impairments - - (35,200 ) (35,200 )
At 31 December 2023 78 701 35,110 35,889
NET BOOK VALUE
At 31 December 2023 1,029 95 41,157 42,281
At 31 December 2022 1,038 36 1 1,075

The categories of plant and machinery includes assets under construction, classified as Construction in Progress (CIP).

Short leasehold are Right of Use asset such as Motor Vehicles, Copy machine and lab equipment leased by the Company for 2 - 6 years.

12. INVENTORY
31.12.23 31.12.22
£'000 £'000
Raw materials 33,105 19,559
Work-in-progress 1,430 1,205
Finished goods 17,551 10,232
52,086 30,996

13. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.2331.12.22
£'000£'000
Trade debtors7,4054,511
Amounts owed by group undertakings9,5164,839
Less: Provision for doubtful debts(4,397)-
Other debtors3,1502,578
Tax RDEC568367
Prepayments and accrued income6951,147
16,93713,442

Included in the amounts owed by group undertakings are amount of £4,397K (2022: £4,839K) due from a fellow subsidiary Fine Environmental Services Ltd and amount of £5,119K (2022:£Nil) due from a fellow subsidiary Lianhetech Singapore Pte.Ltd., The amounts owned by group undertakings were unsecured, interest free and have no fixed repayment date.

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.23 31.12.22
£'000 £'000
Bank loans and overdrafts (see note 16) 5,331 5,910
Leases (see note 16) 50 48
Trade creditors 17,367 8,281
Amounts owed to group undertakings 254,105 208,223
Social security and other taxes 582 514
Accruals and deferred income 5,589 15,764
283,024 238,740

Amounts owed to group undertakings of £254,105K (2022: £208,223K) were unsecured, interest free and have no fixed repayment date. At the balance sheet date, amounts of £167,941K (2022: £174,193K) and £86,164K (2022: £34,030K) were due to the intermediate parent company Lianhetech Holdco Ltd and immediate parent company Lianhetech Europe Ltd, respectively.

15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
31.12.23 31.12.22
£'000 £'000
Leases (see note 16) 66 17
Accruals and deferred income 25 31,756
91 31,773

16. FINANCIAL LIABILITIES - BORROWINGS

31.12.23 31.12.22
£'000 £'000
Current:
Bank overdrafts 5,331 5,910
Leases (see note 17) 50 48
5,381 5,958

Non-current:
Leases (see note 17) 66 17

Terms and debt repayment schedule

1 year or
less 1-2 years Totals
£'000 £'000 £'000
Bank overdrafts 5,331 - 5,331
Leases 50 66 116
5,381 66 5,447

Interest is charged on bank overdraft at 1.4% above Bank of England base rate.

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

17. LEASING

Right-of-use assets

Tangible fixed assets

31.12.23 31.12.22
£'000 £'000
COST
At 1 January 2023 675 675
Additions 121 -
796 675

DEPRECIATION
At 1 January 2023 639 570
Charge for year 62 69
701 639

NET BOOK VALUE 95 36

Lease liabilities

Minimum lease payments fall due as follows:

31.12.23 31.12.22
£'000 £'000
Gross obligations repayable:
Within one year 50 48
Between one and five years 66 17

116 65

Finance charges repayable:

Net obligations repayable:
Within one year 50 48
Between one and five years 66 17
116 65

Future finance charges associated with lease liabilities charges at 3% per annum are applied to the liabilities.

18. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31.12.23 31.12.22
value: £'000 £'000
1,200 Ordinary £1 1 1

Fine Organics Limited (Registered number: 01532065)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

18. CALLED UP SHARE CAPITAL - continued

The number of shares allotted and fully paid were 1,200 at £1 each.

19. PENSION COMMITMENTS

The Company operates a defined contribution pension scheme. The pension cost charged for the year represents contributions payable by the Company to the scheme and amounted to £1,178K (2022: £1,041K). There was £162K (2022: £140K) outstanding at the end of the financial year.

20. CAPITAL COMMITMENTS
31.12.23 31.12.22
£'000 £'000
Contracted but not provided for in the
financial statements 447 446

21. RELATED PARTY DISCLOSURES

See note 6 for disclosure of the directors’ remuneration, notes 13 and 14 for disclosures of balances due from a fellow subsidiary and due to the parent companies.

22. EVENTS AFTER THE REPORTING PERIOD

Subsequent to the balance sheet date, on 24 April 2024, a termination agreement was signed between FMC and Fine Organic Limited. These contracts were previously expected to continue into the next ten years and were significant to the entity's operations and revenue generation, as a result of which deferred income relating to the termination agreement has been released to profit and loss account.

23. ULTIMATE CONTROLLING PARTY

The immediate parent undertaking of the Company is Lianhetech Europe Ltd, a company incorporated in the UK.

The intermediate parent undertaking of the Company is Lianhetech Holdco Ltd, a company incorporated in the UK.

The ultimate parent undertaking of the Company is Lianhe Chemical Technology Co. Ltd, a company incorporated in P.R. China. This is the largest and smallest group for which consolidated financial statements are prepared. Copies of the consolidated financial statements can be obtained from the registered office at 17th Floor, General Chamber of Commerce Building, Laodong North Road, Huangyan District, Taizhou City, Zhejiang Province.

Ms Jinxiang Mu is the ultimate controlling party.