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

The principal activity of the company continued to be that of the manufacture and sale of rare earth-based alloys, either by Vacuum Induction Melting or Co-reduction and the production of light rare earth metals by molten salt electrolysis. The company's main products are samarium cobalt and neodymium iron boron alloys, both for permanent magnet applications. Such magnets are used, for example in automotive, power generation and electronic industries.

Business model

The Company adds value through processing of rare earth oxides, rare earth metals and transition metals into specialised and often complex alloys of close compositional control, low and consistent levels of impurities and controlled microstructures.

Rare earth-based raw materials used by the Company are sourced both from China, the main global supplier of such materials, and from non-Chinese suppliers in order to lessen overdependence on a single geographic region. Other key raw materials, such as cobalt-based materials are sourced from the main ethical global suppliers. The company maintains close links with key raw material suppliers and a strong understanding of market conditions, enables secure and competitive feed to support manufacturing activities.

The company's customers are located primarily in Europe, the USA and the far-East. Emphasis is placed on maintaining close links with all customers on commercial, technical and logistical matters to retain and grow share in key markets.

The company had a difficult trading year in 2024 following raw material prices falling back to levels last seen in 2021.

Chinese dominance in the market still prevails across all areas of the market that LCM supplies.

With the dependence on China for rare earth being on the political agenda for the UK, USA and Europe; LCM has focused its technical efforts on:

• Increasing the capacity of it's HRE (Dy/Tb) production;

• Developing a process for Samarium production.

LCM has been successful in applying for grant funding through both the EU Horizon program and the UKRI Climates programme. All projects will focus on NdFeB alloy production.

LCM remains committed to ethical sourcing. This includes working to fully understand supply chains, the use of legitimate sources for rare earth purchases only, procurement of cobalt-based materials only from sources free of illegally-mined artisanal material and adherence to conflict minerals legislation.

LCM's neodymium iron boron alloy sold in 2024 continues to use non-Chinese neodymium/neodymium praseodymium metal.

Sales by volume in 2024 decreased 27% on the 2023 figures and Revenue also reduced by 35%. Due to a reduction in overhead costs, the Gross Profit only decreased by 18%.

Year-end stock value decreased by 27% compared with the end of 2023. Stock values were affected by the movements in raw materials purchases.

LCM continues its commitment to operate all activities under the highest possible standards of Environmental, Health and Safety stewardship. Focus is placed on; maintaining an appropriate company-wide culture, senior management participation on all Health and Safety matters, employee awareness and training of staff. The company has comprehensive ISO9001 Quality and ISO14001 Environmental Management Systems, with specific objectives relating to; customer satisfaction, continuous improvement, segregation of waste streams and reduction of landfill waste. Senior management commitment, effective communication and obvious reporting of performance are maintained to support all these commitments.

Key Performance Indicators

LCM measures a number of Key Performance Indicators linked to Environmental, Health and Safety, Financial, Quality and Operational aspects of the business.

Environmental, Health and Safety KPIs focus on minimising incidents and by monitoring the effectiveness of EHS systems and measures taken to prevent any incident.

The main Financial KPIs are linked to achieving the Annual Operating Plan, specifically increasing sales volume while maintaining suitable margins for the business.

Quality and Operational KPIs focus on ensuring customer satisfaction, maintaining close contact with customers, minimising non-conformances, optimising furnace utilisation, maximising yields and ensuring that all production activities are carried out efficiently.

LCM sources critical raw materials in the open market and, as such, must consider the risk of supply disruption due to geopolitical or other factors. At the time of writing this Strategic Report, there is increased concern that China may restrict the export of certain rare earths, in particular to the USA as part of ongoing trade disputes.

For several years, the low price of added-value rare earth products from China has served as a barrier to entry into the market from other potential suppliers. Low export prices from China continue, and these are supported by Chinese Government policies to maintain the strong position of the domestic industry. However, current concerns about possible supply disruption should stimulate efforts to establish viable alternatives to China. LCM is actively involved in much of this work.

The company continues to explore options for securing a stable and realistic supply of rare earth raw materials to support its manufacturing activities at competitive prices. Such options include both strategic partnerships with other companies and possible moves towards developing supply based on other business interests of the parent company shareholders.

The company has created a non-Chinese source of samarium oxide and developed a plan to commercialise the samarium production process, supporting Western Supply Chains. This process will increase future volume.

As non-Chinese mining companies start to produce non-Chinese HRE oxides in 2025 LCM is positioned as the only metal maker in the Western World able to produce HRE metals and support the market for an alternative non-Chinese supply chain.

With the European Critical Raw Material Act coming into play in 2030 there are more opportunities to work with OEM’s to support the requirement of 25% recycled content and 40% material processed in Europe. With the UKRI projects undertaken in 2024, a new market has been opened up for future years.

The company continues to explore options for diversification away from magnet products. New markets and products continued to be developed throughout the year. Further development has been made with a US customer for hydrogen storage materials.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

On 31st March 2025, the Company acquired 100% of the issued share capital of Less Common Metals Europe SARL, a company incorporated in France.

The auditor, MHA, previously traded through the legal entity MacIntyre Hudson LLP. In response to regulatory changes, MacIntyre Hudson LLP ceased to hold an audit registration with the engagement transitioning to MHA Audit Services LLP.

MHA will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and principal risks and uncertainties.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

The directors are responsible for preparing the annual 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 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.

We have audited the financial statements of Less Common Metals Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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 Auditor 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 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 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. 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 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 our 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 the directors' report have been prepared in accordance with applicable legal requirements.

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 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.

As explained more fully in the directors' responsibilities statement, 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 to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:

• Enquiries with management about any known or suspected instances of non-compliance with laws and regulations;

• Auditing the risk of fraud in revenue, including through the testing of the cut off of income at the year end and sales transaction testing to ensure revenue occurred and has been recognised in the correct accounting period;

• Enquires with management about any known or suspected instances of fraud;

• Examination of journal entries and other adjustments to test for appropriateness and identify any instances of management override of controls; and

• Review of legal and professional expenditure to identify any evidence of ongoing litigation or enquiries.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 12 to 28 form part of these financial statements.

The notes on pages 12 to 28 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The notes on pages 12 to 28 form part of these financial statements.

Less Common Metals Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 2, Hooton Park, North Road, Ellesmere Port, CH65 1BL.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of LCMG Limited. These consolidated financial statements are available from its registered office, Unit 2, Hooton Park, North Road, Ellesmere Port, CH65 1BL and at Companies House.

The directors have assessed the company’s ability to continue as a going concern and have a reasonabletrue expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis.

In making this assessment, the directors considered all available information about the future, covering a period of at least twelve months from the date of approval of the financial statements. This included:

• Forecasted cash flows and liquidity position;

• Access to financing facilities;

• Principal risks and uncertainties, including both financial and non-financial factors; and,

• The impact of current economic conditions and market volatility.

The directors have concluded that there are no material uncertainties that may cast significant doubt on the company’s ability to continue as a going concern. Should circumstances change, the directors will reassess the appropriateness of the going concern basis and make the necessary disclosures.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT (where applicable) and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from the supply of services, including consultancy fees, represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Where a contract has only been partially completed at the balance sheet date turnover represents the fair value of the service provided to date based on the stage of completion of the contract activity at the balance sheet date. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

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

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. A grant that becomes receivable as compensation for expenses or losses already incurred or for the purposes of giving immediate financial support to the entity with no future related costs, is recognised as income in the period in which it becomes receivable.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and selling price less cost of selling. Cost is based on the weighted average principle and includes expenditure incurred in acquiring the stocks, production or conversion costs and other costs in bringing them to their existing location and condition.

The majority of raw material stocks, by their nature, are considered to have an indefinite useful life due to their non-perishable nature and ability to be re-used or recycled through the chemical processes used by the company. As such, no specific provision for obsolete stock has been made in the financial statements, however the directors continually review for signs of impairment.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet 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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

All financial assets are considered to be basic financial assets.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 profit or loss.

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 the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if 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.

All financial liabilities are considered to be basic financial liabilities.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

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

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. A grant that becomes receivable as compensation for expenses or losses already incurred or for the purposes of giving immediate financial support to the entity with no future related costs, is recognised as income in the period in which it becomes receivable.

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

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The company holds significant quantities of raw material inventories which, due to their non-perishable nature and ability to be reused or recycled through the chemical processes employed by the company, are considered by management to have an indefinite useful life.

As a result, the directors have judged that no specific provision for obsolete or slow-moving raw materials is required at the reporting date. This assessment represents a significant area of judgement, as it relies on the directors’ view that the raw materials will retain their utility in the production process over time.

The directors continue to monitor and review inventory balances for any indicators of impairment or obsolescence and will recognise a provision where there is evidence that stock may no longer be recoverable at its carrying value.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).

Remuneration of the highest paid director was made in the form of fees charged by a personal service company of the director. Further detail can be found within transactions with related parties, note 23 of the financial statements.

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

From 1 April 2023 the government enacted changes to the corporation tax rate, increasing the main tax rate to 25% for companies with augmented profits greater than £250,000. For companies where financial year ends straddle two tax years, pre and post the increase of corporation tax to 25%, profits are apportioned in the ratio to account for the number of months under the 19% taxation rate and the 25% rate. The effective tax rate for the comparative year ended 31 December 2023, was therefore 19.00%.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

A fixed charge dated 9th November 2022 has been secured against the company's freehold property, as detailed in note 19 of the financial statements.

Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

A balance of £19,658 (2023: £nil) is included within other creditors relating to deferred grant income received on 19 December 2024 in respect of the first staged payment for an asset required for the purposes of the grant project. The income will be recognised in profit or loss on a straight-line basis over the useful life of the related asset, when it is brought in to use after the balance sheet date.

Included within other creditors falling due after more than one year, in the prior year, was a formalised long term loan of £813,664 due to the ultimate parent company Indian Ocean Rare Metals Pte Ltd, which was unsecured and interest free. This loan was fully waived in the year through an offset agreement against amounts owed by the UK parent LCMG Limited.

Bank loans are secured by fixed and floating charges dated 11 October 2018 over all of the property and undertakings of the company; this charge also contains a negative pledge.

Included within bank loans, payable within one year is £943,570 (2023: £1,476,627) relating to a Trade Loan Account incurring interest at a margin above bank base of 2.5%.

The remaining balance of £352,188 (2023: £281,125) relates to a formalised directors loan account advanced for the purchase of a property. The loan is repayable in 89 instalments following the balance sheet date and is incurring a fixed interest rate of 4.77%. The loan term end date was amended to 31 December 2025 and as such the entirety of the loan is categorised as falling due within one year. The loan is secured by a fixed charge registered on 9 November 2022 as detailed in note 19 of the financial statements.

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 1 year. All leases are secured against the assets to which they relate (as detailed in note 9) and are on a fixed repayment basis.

Amounts provided for at the balance sheet date relate to a provision for reinstatement costs on termination of the lease of the company occupied rental property, The formal end date of the current lease is the 15th November 2026.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

All ordinary shares fully participate in dividends and capital, and have full voting rights. Ordinary shares are non-redeemable.

Deferred shares carry no right to vote, but a right to participate in dividends and capital subject to certain conditions being met (as defined in the articles of association).

The Company banker Barclays Bank Plc, has a debenture secured against a fixed and floating charge registered on 11 October 2018 over all the property or undertakings of the company.

A director and shareholder of the Company, Mr G Smith, has advanced the company funds, secured by way of a fixed charge registered on 9 November 2022 over the freehold property at 6 Blackfriars Court, Blackfriars, Chester, CH1 2PY.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Amounts contracted for but not provided in the financial statements:

On 31st March 2025, the Company acquired 100% of the issued share capital of Less Common Metals Europe SARL, a company incorporated in France.

The Company has taken advantage of the exemption conferred by FRS102 paragraph 33 and has not disclosed transactions or outstanding balances with its fellow subsidiary undertakings or its parent company, LCMG Limited, on the basis that all relevant companies are directly or indirectly wholly owned by the parent company, where group accounts are prepared, in which these companies are included.

At the balance sheet date the company owed a director £352,188 (2023: £281,125) by way of a secured loan on which interest is charged, as detailed in note 14 of the financial statements.

During the year, the company made payments to Indian Ocean Rare Metals Pte Ltd, the ultimate worldwide parent company, totalling £12,000 (2023: £12,000). At the balance sheet date £5,000 (2023: £813,664) remained outstanding following an offset of the prior year balance of £813,664 against amounts owed by the UK parent company LCMG Limited. Details of which can be found within amounts owed to group undertakings in note 12 (2023: other creditors, note 13) of the financial statements.

The company also made payments during the year to Less Common Metals Europe SARL a company registered in France and connected by virtue of common ownership, totalling £5,609 (2023: £nil). At the balance sheet date £5,609 (2023: £nil) remained outstanding, as detailed in other debtors in note 11 of the financial statements.

Finally, the company made payments to Australasian Minerals & Trading PTY Ltd, a company owned by a director and registered in Australia. Payments totalled £134,551 (2023: £106,473). The majority of these costs are included as part of directors remuneration, within note 6 of the financial statements. At the balance sheet date £nil (2023: £nil) remained outstanding in respect of this balance.

The immediate and ultimate UK parent undertaking at the balance sheet date was LCMG Limited (a Company registered in England & Wales). The ultimate and overall worldwide parent undertaking was Indian Ocean Rare Metals Pte Ltd, a company registered in Singapore.

The parent company of the smallest group that includes the company and for which consolidated financial statements are prepared is LCMG Limited. Copies of these financial statements can be obtained from the registered office at Unit 2 Hooton Park, North Road, Ellesmere Port, Cheshire, CH65 1BL and at Companies House.

The Company is controlled by Mr G Smith, by virtue of his majority shareholding in the ultimate parent company Indian Ocean Rare Metals Pte Ltd.

A prior period adjustment has been recorded to reallocate shipping and freight (£195,923), and power, light and heat (£168,061) as cost of sales. These were included within administrative expenses in the previous year and the Directors have deemed this to be inconsistent with the Company prepared management information and the gross profit KPI's measured by the business. In making this change for 2024, the prior year analysis has been restated so as to ensure comparability of the profit and loss account. This has resulted in a decrease in prior year reported gross profit, but no change to operating profit, tax charges or the balance sheet.