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REGISTERED NUMBER: 07734226 (England and Wales)















AAK NATURAL EMULSIFIERS LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024






AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024










Page

Company Information 1

Strategic Report 2

Report of the Directors 3

Report of the Independent Auditors 5

Statement of Comprehensive Income 9

Balance Sheet 10

Statement of Changes in Equity 11

Notes to the Financial Statements 12


AAK NATURAL EMULSIFIERS LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2024







DIRECTORS: P A J Malmunger
S Jaspers





SECRETARY: D Taylor





REGISTERED OFFICE: King George Dock
Hull
HU9 5PX





REGISTERED NUMBER: 07734226 (England and Wales)





AUDITORS: Clarke Nicklin LLP
Chartered Accountants and
Statutory Auditors
Clarke Nicklin House
Brooks Drive
Cheadle Royal Business Park
Cheadle
Cheshire
SK8 3TD

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024


The directors present their strategic report for the year ended 31 December 2024.

To comply with the Companies Act 2006, the Company has provided below a review of the performance of the business during the year, including key financial performance indicators and a description of the risks and uncertainties facing the Company.

The strategic review contains forward looking statements and opinions that involve risks and uncertainties. These risks and uncertainties could cause results to differ materially from expectations.

BUSINESS REVIEW
The results for the year show a decrease in turnover of 48.4% with gross margin loss at -51.1% (2023: -148.7%) resulting in an operating loss of -£4.9m (2023: -£21.3m). The decrease was due to net impact of lower net realisable value provisions based on restating stock value at the lower of realisable value, cost to re-work expired stock, and purchase cost related to lecithin.

PRINCIPAL RISKS AND UNCERTAINTIES
The company operates in a rapidly changing economic environment subject to global raw material prices for soft oilseeds. This presents areas of risk which are driven by factors which we cannot control or predict. The business seeks to manage these risks as well as possible.

UKRAINE IMPACT
The conflict in the Ukraine remains a factor in disrupting the sunflower lecithin market and the wider lecithin market. AAK AB (publ.), the parent company of AAK Natural Emulsifiers, remains committed to its controlled exit from its operations and investments in Russia. Management believe the business is structurally resilient to the disruptions caused related to the Ukraine.

TARIFFS
The changing landscape of global tariffs in North America, EU and UK coupled with other global jurisdictions presents an area of risk. Management believe the business is structurally resilient to the disruptions caused related to these government decisions.

FINANCIAL KEY PERFORMANCE INDICATORS
Key performance indicators for the business are turnover, gross profit, EBIT and operational efficiencies. There are not considered to be any non-financial key performance indicators that require disclosure.

KEY STRENGTHS
The business is well placed within its sector in that it can leverage on the global sales resources of AAK and reach out to customers worldwide. Other key strengths include extensive technical product application know how to benefit customers in food, pharmaceutical and animal feed sectors.

FUTURE DEVELOPMENTS
The Company is looking to capitalize on its market position in delivering quality lecithin to the market as part of AAK's global organization as well as continued expansion of products through portfolio development, to achieve growth in turnover and gross profit.

ON BEHALF OF THE BOARD:





D Taylor - Secretary


17 March 2025

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2024


The directors present their report with the financial statements of the company for the year ended 31 December 2024.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of import and distribution of food ingredients.

DIVIDENDS
No dividends will be distributed for the year ended 31 December 2024.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

P A J Malmunger
S Jaspers

GOING CONCERN
The directors have assessed the principal risks and uncertainties facing the company and have reviewed its financial position, including available resources and committed facilities. In performing this assessment, the directors have considered the company's budget and medium-term financial plan, along with confirmation from its ultimate parent company that financial support shall remain in place for at least 12 months from the date of approval of these financial statements.

The directors have also evaluated potential downside scenarios and are satisfied that the company has sufficient liquidity to meet its obligations as they fall due, with the continued support of its parent company.

For these reasons, the directors consider it appropriate to prepare the financial statements on a going concern basis.

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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 and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director 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.

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2024


AUDITORS
The auditors, Clarke Nicklin LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:



D Taylor - Secretary


17 March 2025

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
AAK NATURAL EMULSIFIERS LIMITED


Opinion
We have audited the financial statements of AAK Natural Emulsifiers Limited (the 'company') for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, Balance Sheet, 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 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 31 December 2024 and of its loss for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the 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 of at least twelve months from when the financial statements are authorised for issue.

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

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

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

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

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

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
AAK NATURAL EMULSIFIERS 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 Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, 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.

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

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

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
AAK NATURAL EMULSIFIERS 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:

Procedures to identify risks:
- enquiring of management concerning the company's procedures relating to: identifying, evaluating and
complying with laws and regulations and whether they were aware of any instances of noncompliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual,
suspected or alleged fraud;
- discussing among the engagement team regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud. As part of this discussion, we identified potential for
fraud in the following areas: timing of recognition of sales and purchases and their related stock
movements, posting of unusual journals; and
- obtaining an understanding of the legal and regulatory frameworks that the company operates in,
focusing on those laws and regulations that had a direct effect on the financial statements or that had a
fundamental effect on the operations of the company. The key laws and regulations we considered in
this context included UK Companies Act, employment law, health and safety, pensions legislation and
tax legislation.

The procedures to respond to risks identified included:
- reviewing the financial statement disclosures and testing to supporting documentation to assess
compliance with relevant laws and regulations discussed above;
- enquiring of management, concerning actual and potential litigation and claims;
- performing analytical procedures to identify any unusual or unexpected relationships that may indicate
risks of material misstatement due to fraud;
- reviewing correspondence with HMRC;
- testing the timing and matching of income and expense transactions relating to stock movements
either side of the year end; and
- in addressing the risk of fraud through management override of controls, testing the appropriateness of
journal entries and other adjustments; assessing whether the judgements made in making accounting
estimates are indicative of a potential bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
AAK NATURAL EMULSIFIERS LIMITED


Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.




Graham Travis FCA (Senior Statutory Auditor)
for and on behalf of Clarke Nicklin LLP
Chartered Accountants and
Statutory Auditors
Clarke Nicklin House
Brooks Drive
Cheadle Royal Business Park
Cheadle
Cheshire
SK8 3TD

17 March 2025

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024

2024 2023
Notes £    £   

TURNOVER 3 6,279,967 12,979,610

Cost of sales 9,486,714 32,274,477
GROSS LOSS (3,206,747 ) (19,294,867 )

Administrative expenses 1,648,971 1,962,766
OPERATING LOSS 5 (4,855,718 ) (21,257,633 )

Interest receivable and similar income 20,027 2,676
(4,835,691 ) (21,254,957 )

Interest payable and similar expenses 6 1,611,104 1,294,446
LOSS BEFORE TAXATION (6,446,795 ) (22,549,403 )

Tax on loss 7 - (140,090 )
LOSS FOR THE FINANCIAL YEAR (6,446,795 ) (22,409,313 )

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

(6,446,795

)

(22,409,313

)

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

BALANCE SHEET
31 DECEMBER 2024

2024 2023
Notes £    £    £   
FIXED ASSETS
Tangible assets 8 5,020 3,484

CURRENT ASSETS
Stocks 9 2,821,359 7,404,844
Debtors 10 858,013 1,912,900
Cash at bank and in hand 796,890 68,620
4,476,262 9,386,364
CREDITORS
Amounts falling due within one year 11 27,025,221 25,486,992
NET CURRENT LIABILITIES (22,548,959 ) (16,100,628 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

(22,543,939

)

(16,097,144

)

CAPITAL AND RESERVES
Called up share capital 13 100 100
Retained earnings 14 (22,544,039 ) (16,097,244 )
SHAREHOLDERS' FUNDS (22,543,939 ) (16,097,144 )

The financial statements were approved by the Board of Directors and authorised for issue on 17 March 2025 and were signed on its behalf by:





P A J Malmunger - Director


AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 January 2023 100 6,312,069 6,312,169

Changes in equity
Total comprehensive income - (22,409,313 ) (22,409,313 )
Balance at 31 December 2023 100 (16,097,244 ) (16,097,144 )

Changes in equity
Total comprehensive income - (6,446,795 ) (6,446,795 )
Balance at 31 December 2024 100 (22,544,039 ) (22,543,939 )

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024


1. STATUTORY INFORMATION

AAK Natural Emulsifiers 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.

2. ACCOUNTING POLICIES

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

The financial statements are presented in Sterling (£).

Going Concern
The directors have assessed the principal risks and uncertainties facing the company and have reviewed its financial position, including available resources and committed facilities. In performing this assessment, the directors have considered the company's budget and medium-term financial plan, along with confirmation from its ultimate parent company that financial support shall remain in place for at least 12 months from the date of approval of these financial statements.

The directors have also evaluated potential downside scenarios and are satisfied that the company has sufficient liquidity to meet its obligations as they fall due, with the continued support of its parent company.

For these reasons, the directors consider it appropriate to prepare the financial statements on a going concern basis.

Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirements of Section 7 Statement of Cash Flows.

Related party exemption
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2024


2. ACCOUNTING POLICIES - continued

Significant judgements and estimates
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if revision only affects that period, or in the period of the revision and future periods if the revision affects both current and future periods.

There are no other judgements considered to have had a significant effect on amounts recognised in the financial statements except for the below.

Stock write down
The company recognised a significant impairment charge on its stock, primarily acquired before the onset of the conflict in Ukraine. This precautionary measure aimed to ensure sufficient supply amidst potential disruptions to the supply chain. However, the purchase prices during this period were heavily inflated due to market uncertainty. Subsequently, in the current financial period, as pricing stabilised management faced challenges in passing the increased prices on to its customers. This resulted an adjustment of £3,068,030 to impair its stock (2023: £16,474,136).

Rework provision

The company recognised a rework provision in respect of inventory that has passed its expiry date but remains suitable for sale after undergoing necessary rework processes. Management estimates the required provision based on expected future costs to bring the inventory back to a saleable condition. These costs include direct expenses incurred in the rework process. Management considers historical rework costs and expected volumes. As these estimates involve uncertainty, actual costs may differ, and the provision is reviewed regularly for adjustment.

Turnover
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods).

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Fixtures and fittings - 33% on cost
Computer equipment - 33% on cost

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

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

Current or deferred taxation assets and liabilities are not discounted.

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


AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2024


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

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

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

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

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

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

Financial assets
Basic financial assets, including trade debtors, cash and bank balances and amounts owed by group undertakings, are initially recognised at transaction price, 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.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the income statement.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in the income statement.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party, or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2024


2. ACCOUNTING POLICIES - continued

Financial liabilities
Basic financial liabilities, including trade creditors and amounts owed to group undertakings, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

3. TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2024 2023
£    £   
United Kingdom 682,134 1,760,350
Europe 3,310,233 10,386,183
Rest of World 2,287,600 833,077
6,279,967 12,979,610

4. EMPLOYEES AND DIRECTORS
2024 2023
£    £   
Wages and salaries 193,524 240,902
Social security costs 20,261 20,472
Other pension costs (5,284 ) 5,630
208,501 267,004

The average number of employees during the year was as follows:
2024 2023

Directors 2 2
Administration 5 5
7 7

2 (2023: 2) directors are remunerated by other companies in the group.

2024 2023
£    £   
Directors' remuneration - -

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2024


5. OPERATING LOSS

The operating loss is stated after charging:

2024 2023
£    £   
Other operating leases 49,995 52,995
Depreciation - owned assets 2,226 1,902
Auditors' remuneration 20,250 18,453
Foreign exchange differences 22,764 55,906
Impairment of trade debtors 25,618 181,387
Impairment of stock (See note 9) 3,068,030 16,474,136
Litigation settlement 371,293 -
Rework provision 1,328,754 -

During the financial year the company agreed to a final settlement of €1,000,000, of which €550,000 has been covered by insurers. This related to a prior year customer claim arising from supplied batches of Soy Lecithin contaminated with traces of peanut protein, coupled with a Non-Performance claim for failure to deliver contracted volumes. The claim was handled by AAK AB on a group-wide basis.

6. INTEREST PAYABLE AND SIMILAR EXPENSES
2024 2023
£    £   
Bank interest 1,611,104 1,294,446

7. TAXATION

Analysis of the tax credit
The tax credit on the loss for the year was as follows:
2024 2023
£    £   
Current tax:
Adjustment in respect of prior year - (140,090 )
Tax on loss - (140,090 )

UK corporation tax has been charged at 19% (2023 - 19%).

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2024


7. TAXATION - continued

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

2024 2023
£    £   
Loss before tax (6,446,795 ) (22,549,403 )
Loss multiplied by the standard rate of corporation tax in the UK of
19% (2023 - 19%)

(1,224,891

)

(4,284,387

)

Effects of:
Adjustments to tax charge in respect of previous periods - (140,090 )
Loss carried forward 1,225,360 4,144,370
Losses carried back - 140,090
Capital allowances super deduction - (58 )
Deferred tax not accounted for (469 ) (15 )
Total tax credit - (140,090 )

The company has, subject to HMRC approval, corporation tax losses of £28,261,733 available to offset against future trading profits.

8. TANGIBLE FIXED ASSETS
Fixtures
and Computer
fittings equipment Totals
£    £    £   
COST
At 1 January 2024 2,590 16,767 19,357
Additions 3,762 - 3,762
At 31 December 2024 6,352 16,767 23,119
DEPRECIATION
At 1 January 2024 697 15,176 15,873
Charge for year 1,258 968 2,226
At 31 December 2024 1,955 16,144 18,099
NET BOOK VALUE
At 31 December 2024 4,397 623 5,020
At 31 December 2023 1,893 1,591 3,484

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2024


9. STOCKS
2024 2023
£    £   
Finished goods 2,821,359 7,404,844

The company recognized a significant impairment charge on its stock, primarily acquired before the onset of the conflict in Ukraine. This precautionary measure aimed to ensure sufficient supply amidst potential disruptions to the supply chain. However, the purchase prices during this period were heavily inflated due to market uncertainty. Subsequently, in the current financial period, as pricing stabilised management faced challenges in passing the increased prices on to its customers. This resulted an adjustment of £3,068,030 to impair its stock (2023: £16,474,136).

10. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2024 2023
£    £   
Trade debtors 696,348 1,875,861
Other debtors 13,526 32,083
Corporation tax 140,056 -
Prepayments and accrued income 8,083 4,956
858,013 1,912,900

Trade debtors are stated after provisions for impairment of £29,478 (2023: £308,715).

11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2024 2023
£    £   
Bank loans and overdrafts (see note 12) 24,729,770 23,192,519
Trade creditors 765,842 740,357
VAT 4,451 38,628
Other creditors 27,757 55,160
Accruals and deferred income 1,497,401 1,460,328
27,025,221 25,486,992

12. LOANS

An analysis of the maturity of loans is given below:

2024 2023
£    £   
Amounts falling due within one year or on demand:
Bank overdrafts 24,729,770 23,192,519

The bank overdrafts are guaranteed by the company's parent undertaking, AAK AB.

13. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2024 2023
value: £    £   
100 Ordinary £1 100 100

AAK NATURAL EMULSIFIERS LIMITED (REGISTERED NUMBER: 07734226)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2024


14. RESERVES
Retained
earnings
£   

At 1 January 2024 (16,097,244 )
Deficit for the year (6,446,795 )
At 31 December 2024 (22,544,039 )

15. ULTIMATE PARENT COMPANY

The parent undertaking of the largest and smallest group for which consolidated financial statements are prepared is AAK AB (incorporated in Sweden). Consolidated financial statements are available from https://aak.com/investors/.