Ashland Specialties UK Limited
Registered number: 07816571
Annual Report
For the year ended 30 September 2024
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ASHLAND SPECIALTIES UK LIMITED
COMPANY INFORMATION
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Squire Patton Boggs (UK) LLP
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ASHLAND SPECIALTIES UK LIMITED
CONTENTS
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Directors' Responsibilities Statement
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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ASHLAND SPECIALTIES UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The directors present their Strategic Report of Ashland Specialties UK Limited (the 'Company') for the year ended 30 September 2024.
Principal activity and review of the business
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The principal activities of the Company are the manufacture and sale of Adhesives material plus the distribution of specialty chemicals (ASI materials).
Ashland Specialty Ingredients (ASI) is one of the world’s largest producers of cellulose ethers. It provides specialty additives and functional ingredients that primarily manage the physical properties of water based systems. Many of its products are derived from renewable and natural raw materials and perform in a wide variety of applications. Most of ASI’s products are sold as key ingredients to other manufacturers, where they are used as small quantity additives to provide functionality such as thickening and rheology control, water retention, adhesive strength, binding powder, film formation, protective colloid, suspending and emulsifying action, form control and pH stability.
On 19 October 2023, Ashland International Receivables Designated Activity Company (DAG), a consolidated special purpose entity (SPE) of Ashland Inc., entered into an agreement to acquire certain trade receivables, without recourse, of eight foreign-based Ashland subsidiaries. Ashland Specialties UK Limited is one such subsidiary. The sale is accomplished through a classic two-step transaction where the Company will sell 100% of entire invoices/receivables to DAG. DAG then sells a portion of the portfolio and transfers whole receivables to the Purchasers: Bank of America (BOA) and ING Bank Belgium (ING).
Through 30 September 2024, the Company has sold £60,157,000 in receivables under this agreement and has received proceeds against the buyer at purchase price of 98.80%, which amounted to £59,435,000. Accordingly, this resulted to the Company’s recognition of discount expense of £722,000 in the Statement of Comprehensive Income for year ended 30 September 2024.
In November 2023, a buy-in in respect of the defined benefit pension plan's liabilities was transacted. The Company contribution of £2,600,000 as assessed by Mercer was paid by the Company.
The Company’s profit after taxation for the financial year is £1,667,000 (2023: £1,642,000). Net assets (excluding pension surplus) were £54,805,000 (2023: £51,117,000).
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ASHLAND SPECIALTIES UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Key performance indicators
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Management uses a range of performance measures to manage and monitor the performance of the business. Some performance indicators are as follows:
Turnover increased by £1,227,000 in 2024 as compared to 2023. Intermediates and Solvents sales are increased by £950,000, this is driven by higher demand for BLO – particularly to Nufarm Limited. Life Sciences shows a lower sales of £777,000 due to less demand within VP&Derivatives- mainly within the nutrition segment. Personal care business sales are increased by £1,918,000 due to higher demand from Estee Lauder for biofunctional materials. Speciality Additives turnover decreased by £864,000 compared to prior year, driven by lower demand from Clear solutions international through the Energy Resources segment.
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Average number of employees
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Management monitor various KPIs across the business to gain feedback on various areas of the business. These KPIs are: Order Intake, Invoices Sales and Gross Margins: It is important to achieve the right balance between order intake, sales and gross margin to achieve the profitability targets. The actual overall results are in line with the Company's expectations.
Quality: The Company has a robust quality system in place to capture, analyses and report on quality issues arising from products. The quality is measured by customer complaints.
Health, Safety and Environments: The Company has a target to achieve zero fatalities and operates a zero- incident culture. The Company works towards managing its impact on the environment. In 2024, the Company had zero fatalities, zero major incidents and no lost time minor incidents.
Finance: The Company has clear profitability targets to meet each year. To achieve this, it is important for the Company to manage its sales, general and administrative costs and net asset position on the balance sheet.
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ASHLAND SPECIALTIES UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Principal risks and uncertainties
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The principal risks and uncertainties facing the Company are broadly grouped as follows:
Competitive risks
There are no known competitive risks at this point in time.
Financial risk management
The directors and management of the Company regularly review the risks facing the Company.
The Euro compared to Sterling stayed stable during the year, which lowered risk to the Company. Whilst certain levels of currency exposure can be managed on a Group basis the Company faces some risk in this area. The Company does not have exposure to interest or credit risk as this is managed on a Group basis through derivative transactions.
Industry and market considerations
The Company operates in the specialty chemical industry. While many of Ashland’s manufactured products, especially within Consumer Specialties are used in goods deemed ‘essential’ during this pandemic, some product lines within Industrial Specialties have seen a weaker demand.
Economic impact of global events
UK businesses are facing many uncertainties and challenges caused by political, economic, social, technological, legal and environmental factors. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
The directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and concluded that the greatest impact on the business is expected to be from the economic ripple effect on the global economy. The directors have taken account of these potential impacts in their going concern assessment.
The Company continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.
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ASHLAND SPECIALTIES UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Directors' section 172 statement
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The directors have acted in a way that they considered, in good faith to promote the success of the Company, having regard to the following:
Likely consequences of any decision in the long term
The Company is wholly owned by Ashland Inc. and as such will always operate to the standards set by its parent. Any decision taken will be aligned to the strategy of the wider group and be made in the best interests of all stakeholders. Impacts of any decisions will be determined through ongoing risk assessment conducted with all relevant stakeholders.
Employees
Our employees are fundamental to the delivery of our plan. The Company are committed to being a responsible employer. Our behaviour is aligned with the expectations of our people, clients, investors, communities and society. People are at the heart of our services. For our business to succeed we need to manage our people's performance and develop and bring through talent. We conduct and act on regular employee surveys and consult and engage regularly with our employees at all levels of the business. This helps to ensure that we achieve our goals in the right way.
Business relationships
The Company recognises the importance of building strong relationships with customers and actively engages with representatives of key supplier contracts to build strong relationships delivering strategic objectives in an effective and efficient manner for both parties.
Reputation
The Company’s reputation is fundamental to its long-term success and the directors are committed to adhering to laws and regulations, conducting business in a socially and environmentally responsible way and treating all stakeholders with honesty and integrity which is underpinned by the Company’s Code of Ethics.
Environmental
The Company is conscious of both its social and environmental impact and is committed to reducing its carbon footprint with recycling and reduced use of paper and plastic throughout the Company, worldwide. Reporting is required on a series of environmental indicators to its parent company on an annual basis.
Principal decisions
There were no significant principal decisions made during the year. We define principal decisions taken by the Board of Directors as those decisions that are strategic in nature and are significant to our stakeholders. Our key stakeholders include; Customers, Shareholders, Employees and Suppliers.
This report was approved by the board and signed on its behalf by:
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ASHLAND SPECIALTIES UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The directors present their Annual Report and the audited financial statements of Ashland Specialities UK Limited (the 'Company') for the year ended 30 September 2024.
The profit for the year, after taxation, amounted to £1,667,000 (2023: £1,642,000).
The directors recommend a final dividend for the year of £nil (2023: £96,000,000).
The directors who served during the year and to the date of this report were:
All intercompany invoices are paid based on the Netting payment schedule. The Netting calendar is prepared by the Treasury department in advance for the entire year. The payment terms for third party vendors vary based on the agreement and type of service. Most of these vendors have payment terms of between 7 to 30 days.
The Company will continue focusing on growth. Optimising our businesses and achieving efficiencies will be a major objective and a shift in the world economy will challenge the Company to create new opportunities to ensure growth during 2025 and beyond. The industry that the Ashland Group operates in is changing rapidly. The Group is investing more resource in research and development with new products being launched by the ASI. This is in order to maintain and improve the Group’s competitive position. The directors expect the economic environment to remain challenging in the short term. As a consequence, the Company does not envisage that a material change in its ability to operate as a going concern for a period up to 30 June 2026.
During the current year, the Company made a profit of £1,667,000 (2023: £1,642,000) and had net assets of £55,063,000 (2023: £65,355,000). On this basis the directors have considered the Company’s current and future prospects and its availability of financing, and is satisfied that the Company can continue to pay its liabilities as they fall due over a period to 30 June 2026.
The directors have received assurances and a letter of support from Ashland Inc. on behalf of the Ashland Group that it will continue to support the Company for a period to 30 June 2026.
The directors have made detailed enquiries, including confirmation of the strong liquidity position announced by Ashland Group and review of the latest financial results and projections for a period to 30 June 2026. After making these detailed enquiries, the directors are confident that Ashland Group has sufficient resources to enable it to provide financial support, for a period to 30 June 2026 and therefore have prepared the financial statements on a going concern basis.
Matters covered in the Strategic Report
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As permitted by paragraph 1A of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and reports) Regulations 2008 certain matters which are required to be disclosed in the Directors' Report have been omitted as they are included in the Strategic Report. These matters relate to the principal activities, review of the business, key performance indicators and principal risks and uncertainties.
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ASHLAND SPECIALTIES UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Greenhouse gas emissions, energy consumption and energy efficiency action
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The Company has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is 40,000kWh or lower.
Provision of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware; and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Company since the year end.
The auditors, Ernst & Young LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf by:
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ASHLAND SPECIALTIES UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
∙provide additional disclosures when compliance with the specific requirements in FRS 102 is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company financial position and financial performance;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards including, FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙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 transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Under applicable laws and regulations, the directors are also responsible for preparing a Strategic Report and Directors' report that comply with the relevant laws and regulations.
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ASHLAND SPECIALTIES UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ASHLAND SPECIALTIES UK LIMITED
Opinion
We have audited the financial statements of Ashland Specialties UK Limited (the ‘Company’) for the year ended 30 September 2024 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes 1 to 25, 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 FRS 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 Company’s affairs as at 30 September 2024 and of its 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 Auditor’s 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.
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 Company’s ability to continue as a going concern for a period to 30 June 2026.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company's ability to continue as a going concern.
Other information
The other information comprises the information included in the Annual Report, other than the financial statements and our Auditor’s Report thereon. The directors are responsible for the other information contained within the annual report.
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.
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ASHLAND SPECIALTIES UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ASHLAND SPECIALTIES UK LIMITED
Other information (continued)
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 course of 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 the 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In 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 Directors' Report.
We have nothing to report in respect of the following matters in relation to which 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 directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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ASHLAND SPECIALTIES UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ASHLAND SPECIALTIES UK LIMITED
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on page 7, 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 is 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 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 either to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 an Auditor’s Report 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.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. 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 or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
Our approach was as follows:
∙We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are those that relate to the reporting framework (Companies Act 2006, FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', Bribery Act 2010, those laws and regulations relating to health and safety and employee matters and relevant tax compliance regulations in the jurisdictions in which the Company operates, including the United Kingdom).
∙We understood how the Company is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through the review of the following documentation: all minutes of board meetings held during the year; the Company's code of conduct setting out the key principles and requirements for all staff in relation to compliance with laws and regulations; and any relevant correspondence with local tax authorities.
∙We assessed that revenue was a judgemental area of the audit which might be more susceptible to fraud. We obtained an understanding of the controls over the process for the recognition of revenue and tested in particular the existence of the revenue recorded in the financial statements and any manual adjustments to the revenue.
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ASHLAND SPECIALTIES UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ASHLAND SPECIALTIES UK LIMITED
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud (continued)
∙We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by considering the controls that the Company established to address risks identified by the Company or that otherwise seek to prevent, deter or detect fraud. We gained an understanding of the entity level controls and policies that the Company applies.
∙Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures involved testing of journal entries, with a focus on journals indicating large or unusual transactions or meeting our defined risk criteria based on our understanding of the business, enquiries of management and the directors and review of legal correspondence.
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 Auditor’s Report.
Use of the audit 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 an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body for our audit work, for this report, or for the opinions we have formed.
Mark Lawther (Senior statutory auditor)
for and on behalf of
Belfast
Date: 26 June 2025
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ASHLAND SPECIALTIES UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Interest receivable and similar income
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Interest payable and similar expenses
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Net interest on pension scheme assets and liabilities
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Profit for the financial year
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Other comprehensive expense for the year
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Movement on deferred tax relating to pension gains
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Remeasurement loss recognised on defined benefit pension scheme
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Other comprehensive expense for the year
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Total comprehensive expense for the year
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The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
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The notes on pages 15 to 39 form part of these financial statements.
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ASHLAND SPECIALTIES UK LIMITED
REGISTERED NUMBER: 07816571
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024
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Debtors: amounts falling due within one year
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Cash and cash equivalents
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by by:
The notes on pages 15 to 39 form part of these financial statements.
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ASHLAND SPECIALTIES UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Comprehensive expense for the year
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Actuarial loss on pension scheme (note 21)
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Total comprehensive expense for the year
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Contributions by and distributions to owners
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Comprehensive expense for the year
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Actuarial loss on pension scheme (note 21)
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Total comprehensive expense for the year
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The notes on pages 15 to 39 form part of these financial statements.
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Ashland Specialties UK Limited (the 'Company') is a private company limited by shares incorporated and domiciled in England and Wales. The address of its registered office is 30 Old Bailey, London, United Kingdom, EC4M 7AU.
The principal activities of the Company are the manufacture and sale of Adhesives material plus the distribution of specialty chemicals (ASI materials).
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland (FRS 102) and the Companies Act 2006.
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland (FRS 102) and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The financial statements have been presented in Pound Sterling as this is the currency of the primary economic environment in which the Company operates and is rounded to the nearest thousand pounds (£000) unless otherwise stated.
The following significant accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23; and
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Ashland Inc. as at 30 September 2024 and these financial statements may be obtained from 8145 Blazer Drive, Wilmington, Delaware 19808.
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
During the current year, the Company made a profit of £1,667,000 (2023: £1,642,000) and had net assets of £55,063,000 (2023: £65,355,000). On this basis the directors have considered the Company’s current and future prospects and its availability of financing, and is satisfied that the Company can continue to pay its liabilities as they fall due over a period to 30 June 2026.
The directors have received assurances and a letter of support from Ashland Inc. on behalf of the Ashland Group that it will continue to support the Company for a period to 30 June 2026.
The directors have made detailed enquiries, including confirmation of the strong liquidity position announced by Ashland Group and review of the latest financial results and projections for a period to 30 June 2026. After making these detailed enquiries, the directors are confident that Ashland Group has sufficient resources to enable it to provide financial support, for a period to 30 June 2026 and therefore have prepared the financial statements on a going concern basis.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentation currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income.
All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within 'Administrative expenses'.
- 16 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
Turnover represents sales to external customers at amounts invoiced less value added tax and trade discounts. Turnover is of goods to customers.
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Sale of goods
Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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|
Operating leases: the Company as lessee
|
Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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|
Interest receivable and similar income
|
Interest receivable and similar income is recognised in the Statement of Comprehensive Income using the effective interest method.
|
|
Interest payable and similar expenses
|
Interest payable and similar expenses are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
- 17 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
Defined benefit pension plan
The Company operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.
The liability recognised in the Statement of Financial Position in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of plan assets at the reporting date (if any) out of which the obligations are to be settled.
The defined benefit obligation is calculated using the projected unit credit method. Annually the Company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').
The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.
The cost of the defined benefit plan, recognised in the Statement of Comprehensive Income as employee costs, except where included in the cost of an asset, comprises:
a) the increase in net pension benefit liability arising from employee service during the period; and
b) the cost of plan introductions, benefit changes, curtailments and settlements.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in the Statement of Comprehensive Income as a 'finance expense'.
The defined benefit scheme was closed to members on 31 October 2016.
- 18 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
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Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
- 19 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
Goodwill
Goodwill arising from the acquisition of business undertakings, represent the difference between purchase consideration and the fair value of assets and liabilities acquired, and purchased goodwill is capitalised in the statement of financial position and is amortised over a period of 10 years or less, depending on the circumstances of each acquisition.
If a business undertaking is subsequently sold or closed, any goodwill arising on acquisition that has not been amortised through the profit and loss account and is taken into account in determining the profit or loss on sale or closure.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
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 which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Amortisation is included in 'Administrative expenses' in the Statement of Comprehensive Income.
Goodwill was reviewed for impairment at the end of the first full financial year following the acquisition and in other periods if events or changes in circumstances indicated that the carrying value may not be recoverable.
The Company reviews goodwill at segment level on a regular basis and if events change then an impairment calculation is performed based on a fair value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversible.
- 20 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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 which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.
Depreciation is included in 'Administrative expenses' in the Statement of Comprehensive Income.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income.
As a Limited Risk Distributor (LRD), the Company buys products from Ashland Industries Europe GmbH and then immediately resells them to customers (“flash title” transfer). So, there will be no inventory reported in Company’s financial statements.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
- 21 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
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Cash and cash equivalents
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
- 22 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the Statement of Comprehensive Income. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the Statement of Comprehensive Income.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
- 23 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the Statement of Comprehensive Income. They are subsequently measured at fair value with changes in the Statement of Comprehensive Income.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the Statement of Comprehensive Income. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
- 24 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Judgements in applying accounting policies and key sources of estimation uncertainty
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In applying the Company’s accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors’ judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
3.1 Critical judgements in applying the Company’s accounting policies
Valuation of derivatives
When the fair value of financial assets and financial liabilities cannot be measured based on quoted prices in active markets or on the price of a recent transaction for an identical asset or liability, their fair values are measured using valuation techniques including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
3.2 Key sources of estimation uncertainty
Taxation
Judgements are required when determining the provision for taxes. Tax benefits are not recognised unless it is probable that the benefit will be obtained. Tax provisions are made if it is possible that a liability will arise. The Company reviews each significant tax liability or benefit to assess the appropriate accounting treatment. Management estimation is required to determine the amount of deferred tax assets that can be recognised, based upon likely timing and level of future profits.
Pensions
The cost of defined benefit pension plans is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates and mortality rates. Due to the complexity of the valuation, the underlying assumptions and the long term nature of these plans, such estimates are subject to significant uncertainty.
The defined benefit pension scheme was closed to members on 31 October 2016.
- 25 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
|
Judgements in applying accounting policies and key sources of estimation uncertainty
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3.2 Key sources of estimation uncertainty (continued)
Recoverability of debtors
The Company establishes a provision for debtors that are estimated not to be recoverable. When assessing recoverability the directors have considered factors such as the aging of the debtors, past experience of recoverability, and the credit profile of individual or groups of customers.
Impairment of intangible assets and goodwill
The Company considers whether intangible assets and/or goodwill are impaired. Where an indication of impairment is identified the estimation of recoverable value requires estimation of the recoverable value of the cash generating units (CGUs). This requires estimation of the future cash flows from the CGUs and also selection of appropriate discount rates in order to calculate the net present value of those cash flows.
Determining residual values and useful economic lives of intangible assets
The Company amortises intangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management.
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An analysis of turnover by class of business is as follows:
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Ashland Specialty Ingredients
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Analysis of turnover by country of destination:
- 26 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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The operating loss is stated after charging:
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Depreciation of tangible fixed assets
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Amortisation of intangible assets
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Auditor's remuneration for the audit of the financial statements
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Other operating lease rentals
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Staff costs were as follows:
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Pension costs - Defined benefit (note 21)
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Pension costs - Defined contribution (note 21)
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The average monthly number of employees, including the directors, during the year was as follows:
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The remuneration of the Company directors in the current and preceding financial accounting year was borne by other group companies and is disclosed in the financial statements of those companies. It is not practical to apportion their remuneration between those companies. The directors did not participate in the Company’s pension scheme arrangements.
- 27 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Interest receivable and similar income
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Interest receivable from group companies
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Other interest receivable
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Interest payable and similar expenses
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Interest payable from group companies
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Net interest on pension scheme assets and liabilities
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Interest income on pension scheme assets (note 21)
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Interest cost on defined benefit obligation (note 21)
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- 28 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2023: higher than) the standard rate of corporation tax in the UK of25% (2023: 22.01%). The differences are explained below:
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Profit multiplied by standard rate of corporation tax in the UK of 25% (2023: 22.01%)
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Income not taxable for tax purposes
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Adjustments to tax charge in respect of previous periods - deferred tax
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Remeasurement of deferred tax for changes in tax rates
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Adjustments to tax charge in respect of previous periods
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Expenses not deductible for tax purposes
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Total tax charge for the year
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- 29 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
11.Tax on profit (continued)
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Factors that may affect future tax charges
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From 1 April 2023, the rate of corporation tax in the United Kingdom increased from 19% to 25%. Companies with profits of £50,000 or less are continuing to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase. Deferred tax recognised during the year has been calculated at 25%.
The Organization for Economic Co-operation and Development (“OECD”) introduced Global Anti-Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules under which multi-national entities would pay a minimum level of tax. Numerous countries, including European Union member states, have enacted or are expected to enact legislation to effectuate the new rules. In addition, several non-EU countries have proposed and/or adopted legislation consistent with the global minimum tax framework. Important details of these minimum tax developments are still to be determined and, in some cases, enactment and timing remain uncertain. Based on current legislation and available guidance, these rules will be effective for Ashland in its fiscal year beginning 1 October 2024. Ashland plans to treat the Pillar Two global minimum tax as a period cost. Currently, Ashland expects these Pillar Two minimum tax rules will result in an increase in Ashland’s effective tax rate, but the overall impact will not have a material impact on Ashland’s financial condition, results of operations, or cash flows in the fiscal year ending 30 September 2025.
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Final dividend paid of £nil per share (2023: £2.80)
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- 30 -
|
ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Negative goodwill relates to the acquisition of the trade and assets of Ashland Industries UK Limited and Ashland UK Limited on 1 June 2012 and of ISP (Great Britain) on 1 July 2013. In January 2016 the portion relating to ISP (Great Britain) was released due to the sale of the ISP (Great Britain) offices.
Goodwill relates to the acquisition of Schülke & Mayr GmbH. The main brands/products of Schülke & Mayr GmbH include Sensidin, Effisin, Sensiva etc.
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- 31 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 32 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Debtors: amounts falling due within one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Deferred taxation (note 18)
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Amounts owed by group undertakings are unsecured, payable on demand and include £87,401,000 (2023: £72,811,000) related to cash pool which is interest bearing at GBP Overnight Deposit minus 25 basis points per annum. The remaining balance is interest free.
On 19 October 2023, Ashland International Receivables Designated Activity Company (DAG), a consolidated special purpose entity (SPE) of Ashland Inc., entered into an agreement to acquire certain trade receivables, without recourse, of eight foreign-based Ashland subsidiaries. The amount of trade receivables sold during the year is £60,157,000.
The Company is one such subsidiary. Intercompany loans of £nil (2023: £27,000) are secured against trade debtors under this agreement. The average interest rate is 0% (2023: 0.95%).
Trade debtors are stated after a bad debt provision of £nil (2023: £nil).
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Cash and cash equivalents
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- 33 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Creditors: amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free.
Intercompany loans relate to a balance of £nil (2023: £27,000) due to Ashland Industries Europe GmbH, a fellow group company, the loans are unsecured, carry interest at 0% (2023: 3 month Sonia plus 1.375%) and was repaid during the year.
Derivatives
The Company enters into forward foreign currency contracts to mitigate the exchange rate risk for certain foreign currency payables. At 30 September 2024, the outstanding contracts all mature within 1 month (2023: 1 month). The Company is committed to buy $98,000,000 and €24,750,000 and pay a fixed sterling amount (2023: $75,159,577 and €17,660,592).
The forward currency contracts are measured at fair value, which is determined using valuation techniques that utilise observable inputs. The key inputs used in valuing the derivatives are the forward exchange rates for GBP:USD and GBP:EUR. The forward rate exchange rate were £1: $1.33 (2023: $£1: $1.23) and £1: €1.19 (2023: €1.15). The difference between the fair value and the contract rate as at 30 September 2024 of the forward-foreign currency contracts is an asset of £687,000 (2023: liability of £541,000).
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- 34 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Charged to the statement of comprehensive income
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Charged to other comprehensive income
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The deferred tax balance is made up as follows:
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Accelerated capital allowances
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Deferred tax liability in pensions plans
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Asset - due within one year
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Allotted, called up and fully paid
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34,315,001 (2023: 34,315,001) Ordinary shares of £1 each
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The ordinary shares entitle each holder to one voting right and no right to fixed income.
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Profit and loss account
The profit and loss account reserve represents cumulative comprehensive income less any dividends paid.
- 35 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £208,867 (2023: £236,615). There were no amounts payable to the fund at the year end (2023: £nil).
The Company also operates a defined benefit pension scheme.
In November 2023, a buy-in in respect of the defined benefit pension plan's liabilities was transacted. The Company contribution of £2,600,000 as assessed by Mercer was paid by the Company.
For the year ended 30 September 2024, the defined pension benefit scheme has been revalued, so that it is based on the most recent actuarial valuation at 21 December 2023. It has been revalued by a qualified independent actuary to take account of the requirements of FRS 102 in order to assess the liabilities of the scheme as at 30 September 2024. The valuation used the projected unit method and was carried out by Mercer, professionally qualified actuaries.
There will be no further contributions as from the date of closure of the pension scheme. The defined benefit scheme was closed to future accrual and new entrants as at 31 October 2016.
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Reconciliation of present value of plan liabilities:
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Reconciliation of present value of plan liabilities
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At the beginning of the year
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Current service cost (note 6)
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Actual benefit payments by the fund
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- 36 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
21.Pension commitments (continued)
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Reconciliation of present value of plan assets:
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At the beginning of the year
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Interest income on plan assets (note 10)
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Administrative expenses paid from plan assets
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Composition of plan assets:
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Fair value of plan assets
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Present value of plan liabilities
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Net pension scheme liability
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The amounts recognised in the Statement of Comprehensive Income are as follows:
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Interest income on plan assets
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- 37 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
21.Pension commitments (continued)
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The Company expects to contribute £nil to its defined benefit pension scheme in 2025.
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Analysis of actuarial loss recognised in Other Comprehensive Income
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Actual return less interest income included in net interest income
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Principal actuarial assumptions at the Statement of Financial Position date (expressed as weighted averages):
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- at 65 for a male aged 45 now
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- for a female aged 65 now
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- at 65 for a female member aged 45 now
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- 38 -
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ASHLAND SPECIALTIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Commitments under operating leases
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At 30 September 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The Company is a wholly owned subsidiary of Ashland Inc. and as such has taken advantage of the exemption permitted by Section 33 'Related party disclosures' not to provide disclosures of transactions entered into with other wholly owned members of the group.
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Post balance sheet events
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There have been no significant events affecting the Company since the year end.
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Ultimate parent undertaking and controlling party
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The immediate parent undertaking is Ashland Industries Europe GmbH, a Company registered in Switzerland.
The ultimate parent undertaking and controlling party is Ashland Inc., a company registered in United States of America.
The largest and smallest group into which the results of the Company are consolidated is that headed by Ashland Inc. a company registered in United States of America, and the controlling party of the Company.
The consolidated financial statements of Ashland Inc. are available to the public and may be obtained from 8145 Blazer Drive, Wilmington, Delaware 19808.
- 39 -
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