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

Industrial Chemicals Limited was incorporated in November 1999 as a manufacturer and trader of industrial chemicals. Currently employing 469 people and headquartered in Warley, Essex, with production facilities across the UK in West Thurrock, Newcastle, Port Clarence, Selby and Widnes.

Business Review

2024 represented a challenging year for Industrial Chemicals and the wider chemical industry, with Global instability, energy price volatility, and regulatory pressures continuing to weigh heavily on margins.

Despite these challenges Industrial Chemicals remains financially resilient, recording Turnover of £168.97m (2023: £187.69m), driven mainly by lower market pricing across high-volume products. While turnover fell 10%, profitability was supported by tighter cost control and robust customer demand in all key markets.

Gross profit margin was broadly stable at 41.3% (2023: 41.0%). Resulting in an EBITDA before exceptionals of £7.8m (2023: £12.5m) and post-tax profit of £3.8m (2023: £10.3m) reflecting both margin pressures and exceptional items, most notably a £2.56m provision for Health & Safety and Environmental fines following a historic operational incident at West Thurrock.

Balance Sheet

Raw material and finished goods stock closed the year at £4.7m (2023: £5.5m). This reduction reflects the Company’s active management of inventory, with a particular focus on lowering finished goods levels. The improvement supports more efficient use of working capital and aligns with our ongoing commitment to operational discipline and supply chain effectiveness.

Trade Debtors increased within the year to £17.7m (2023 £17.2m), reflecting a broader market trend of customers pushing for extended payment terms during the year.

Trade Creditors increased by £2.5m to £17.6m, primarily due to higher operational costs incurred across the business during 2024. The increase also reflects ongoing investment activity.

Our bank borrowings reduced to £7.2m from £9.2m, demonstrating our continued focus on cash management and debt reduction within the business.

Days sales outstanding (DSO) increased on average by 5 days across the year to 38.2 days, whilst Creditor days (CDO) increased by 15 days to 65 days on average for the year. A key focus for the business is maintaining an acceptable ratio for both our customers and suppliers in this regard and will continue to be monitored closely in 2025.

Capital Expenditure

Capital projects incurred by the parent company were directed towards general upgrades to Chlor Alkali capacity in West Thurrock, enhancing production at all existing Ferric Sulphate plants, and continued investment in the new Poly Aluminium Chloride (PAC) plant at West Thurrock, with construction to be completed in Q2 2025, with commissioning scheduled for Q3 2025.

In addition, the demolition and removal of the dormant Grays site progressed, funded through recovered scrap value, with full closure of the site expected in Q4 2025.

The relocation of head office functions from Grays to Warley, Essex was completed in February 2024, supporting centralisation and efficiency. All staff transferred with no redundancies.

Total capital expenditure in the parent company reached c.£15m.

Outlook

The UK chemicals sector in 2025 remains structurally disadvantaged relative to international peers. Energy and carbon costs are uncompetitive, and the fiscal environment under the new UK government offers little immediate relief. UK chemical production fell by almost one-third between 2021–2024. Growth projections for 2025 remain muted at c.1.7% versus c.2.1% for the Eurozone. Sentiment is cautiously optimistic among operators, but expectations remain constrained.

The government has reiterated commitment to maintain corporation tax at 25%, with limited headroom for sector-specific reliefs. Windfall-style taxes remain in place for oil & gas operators; which indirectly impacts chemicals through reduced upstream investment and higher input costs. Business rates reform has not yet materialised, resulting in continued significant fixed costs for our sites.

The UK government must recognise the chemicals manufacturers are a strategic enabler of UK industrial growth. Failure to reposition to support this market now risks further contraction and divestment; bold action can still convert headwinds into long-term strategic advantage.

Nevertheless, we remain well positioned with a robust balance sheet, diversified product portfolio, and new PAC capacity coming online to meet any challanges. Early trading in 2025 indicates stable volumes, albeit at moderated pricing. Strategic focus will remain on margin recovery, operational efficiency, and securing long-term supply contracts with UK water companies.

The Board acknowledges the resilience and dedication of employees through a difficult trading environment. Customer and supplier relationships remain central to the our stability.

UK regulatory drivers in water treatment markets continue to support long-term demand. Our strategy remains to invest throughout the cycle, strengthen our capital base, and enhance productivity across all operations.

In addition to the factors described elsewhere in this Annual Report, the following are the most significant known factors, risk and uncertainties that could cause actual results to differ materially from those expected in the Boards of Directors outlook for 2024.

Economic, Political & Trade Uncertainty

The deterioration of the global economy resulting from any further Global political tensions, or social crisis could affect the Company’s results, financial condition and cash flows. In addition, the Company’s ability to access the credit and capital markets under attractive rates and terms would be affected, which would negatively impact on the Company’s liquidity and our ability to pursue certain growth initiatives.

The Company prepares strategic plans to review demand in existing markets and potential new opportunities on a regular basis, responding rapidly to changing market conditions, taking necessary mitigating actions where required and using appropriate bank and alternative hedging facilities where applicable to ensure we adapt to any economic conditions.

Loss/Financial Weakness of Large Customers

Although the Company has an extensive customer base, loss of or material financial weakness of, certain of our largest customers could adversely affect the Comapny’s financial condition and results until such business is replaced. No assurance can be made that the Company would be able to regain or replace any lost customers.

The Company supplies predominantly well-established diverse customer markets on long term contracts, coupled with long term suppliers and a wide portfolio of products, which aids to mitigate this risk. The Company strategy remains to expand our customer portfolio further and secure long term contracts where possible.

The major water companies are some of our biggest customers, so naturally we monitor developments in this sector and manage credit exposure, whilst maintaining regular communication with key contacts as required.

Technological Failure of Change

Failure to keep pace with changes within the highly competitive markets, in which the Company operates, could result in a lack of competitive products or processes and could result in erosion of margin and loss of market share.

The Company continues the innovation of its existing product portfolio, supporting the current customer base, to ensure the product range remains compliant with legislation and cost effective for all stakeholders. This is coupled with further investment into research and development in all areas of the business, from new products, processes and services to maximise the return for all stakeholders.

The Company is also investing heavily into its business systems staff and infrastructure, to ensure that we remain at the forefront of this vital business resource.

Information Technology Systems Failure

The Company uses a wide variety of complex IT systems in operational and supporting activities. Failure of one or more of the major systems over an extended period could impact on the ability to manufacture or to report operational performance, ultimately impacting on the Company’s profitability.

The Company continuously reviews IT infrastructure, the network environment and cybersecurity protection, to ensure that it has an appropriate robust IT disaster recovery and general business continuity plan. These plans are regularly reviewed and tested, ensuring the continuation of the business systems in the most extreme of circumstances.

Principal Risks and Uncertainties (Continued)

Failure of Significant Sites

Whilst the Company operates from a variety of locations, certain sites are critical due to their scale of specific nature of production activities. Failure of a critical site could significantly impact overall performance.

Business continuity plans include consideration and testing of circumstances in which alternative back up locations may be required. Where possible the Company has replicated significant manufacturing processes across its operations to continue market supply. The Company has also invested in inventory of critical plant and machinery replacements units to further mitigate risk.

Liquidity risk

The Company's policy is to ensure continuity through effective management of its current assets and liabilities, plus an appropriate asset-backed financial package from a leading UK bank. The directors monitor cashflow on a regular basis, with bank balances structured to ensure cash is available when required.

Credit risk

The Company's credit risk is primarily attributable to trade debtors. This risk is minimised by the number of long-established customers, including fortune 500 and utility companies and an emphasis on good credit management throughout the group.

Foreign currency risk

The Company has an exposure to foreign currencies due to selling and purchasing some if of its products in currencies other than sterling. The risk is reduced through the use of forward currency contract and through quarterly price review mechanisms. The Directors do not consider this to be a material risk.

The Company monitors a range of financial and non-financial performance indicators, reviewed regularly against both budget and prior year performance. The principal financial measure is EBITDA (earnings before interest, taxation, depreciation, amortisation and exceptional items) which for the year ended 31 December 2024 was £7.8 million (2023: £12.5 million). The Company continues to monitor overheads closely, maintaining tight cost discipline while protecting areas critical to long-term growth.

Sales and Gross Profit growth per annum

Turnover by geographical region

Non-financial indicators also form a key part of performance monitoring. Health, safety, and environmental metrics are tracked to safeguard employees and contractors, underpinning the Company’s commitment to safe and sustainable operations. Operational performance and stock levels are reviewed regularly to ensure effective working capital management, improve supply chain efficiency, and support customer delivery. Together, these measures provide a balanced view of performance and guide the Company’s focus on sustainable growth.

Stocks and debtors profile

Energy and carbon report

The company is a subsidiary and is included in the consolidated financial statements of Industrial Chemicals Group Limited and therefore it is not required to report on its emissions, energy consumption or energy efficiency activities as these are included in the group accounts.

This section serves as our section 172 statement and should be read in conjunction with the Strategic report on pages 1 - 7. Section 172 of the Companies Act 2006 requires the Directors to have regard of the interests of the Company’s employees and other stakeholders, including the impact of its activities on the community, the environment and the Company’s reputation when making decisions.

The Board regularly reviews the principal stakeholders and how we engage with them. The stakeholder voice is brought into the boardroom throughout the annual cycle through information provided by management and also by direct engagement with stakeholders themselves. The relevance of each stakeholder group may increase or decrease depending on the matter or issue in question, so the Board seeks to consider the needs and priorities of each stakeholder group during its discussions and as part of its decision making.

The Board have had regard to the factors set out above and acknowledge that for the business to grow over the long term, a full understanding of the Company’s stakeholders is required to ensure that the Board can make informed decisions which factor in stakeholder interest.

The Board considers its significant stakeholder groups to be Employees, Customers, Suppliers, Local Community and Environment.

Employees

Our employees with their expertise and dedication play a key role in the long term success of the business. Human resources planning forms a fundamental part of our strategy, with a dedicated focus on employee retention and development at every level. We encourage open dialogue, allowing employees to play a part in shaping the Company and foster a change and performance culture. The internal team meetings and department meetings promote the flow of information, communication and cooperation between all employees.

We promote and maintain consistently high standards of safety and compliance training. Our staff are actively involved in decisions surrounding strategy, operational performance, capital investments and financial structure and their input is factored into all such decisions

Customers and Suppliers

We support our business partners in developing and growing their business through our close working relationships, formed over the fifty years of trading. We enable them to expand their business, as we grow together through continuous innovation and development. We are able to address the different requirements of our suppliers and customers and with the focus on providing the right solution because we have experts and specialists for all customer industries in which we operate.

Our experts share their knowledge of local conditions and the specific applications of our products, thereby creating real added value for our partners. We are well placed to meet its business partners’ diverse requirements. Our business partners are vital to ensuring our long term success, this principle remains unchanged and as a business we constantly review our business model with the view to leveraging further potential.

Section 172 Statement (Continued)

The community and environment

During the year, we continued to provide funding to a number of local schools and clubs, with this funding more vital than ever to the success of these charities. We also invested in a number of good causes that are recommended by our employees through the year. We also continued to allow our employees to take time off work so they can support charitable organisation in the local community.

Business standards

The Board is committed to ensuring the business and its employees act in a responsible manner and maintain the highest standard of conduct. During the year, policies have been regularly reviewed and communicated to support this commitment.

Developments during the year

In the course of the year, the Board undertook a detailed review of the Group’s banking arrangements, including a competitive tender process to assess the suitability of alternative providers. As a result, the Group resolved to diversify its banking relationships, extending from a sole relationship with Lloyds Bank to a dual arrangement with Lloyds Bank and NatWest Bank.

In reaching this determination, the Board gave due consideration to the long-term consequences of its decision, the interests of employees, customers, and other stakeholders, and the need to maintain the Group’s capacity for sustained growth. The Board concluded that this diversification of banking facilities is in the best interests of the Group as a whole, providing enhanced financial resilience and the liquidity required to deliver the Group’s strategic objectives, including the continued development of its manufacturing operations and the fulfilment of growing customer demand across the UK.

On behalf of the Board of Directors, I wish to place on record our appreciation to all employees for their professionalism, dedication, and considerable contribution throughout the year. The Board also extends its thanks to our customers, suppliers, and business partners for the trust they continue to place in the Group and for the strength of the collaborative relationships that underpin our success. These partnerships remain fundamental to the delivery of our long-term strategy, and we look forward to building on them as we continue to grow and develop in the years ahead.

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

The principal activity of the company continued to be that of manufacturing other inorganic basic chemicals, soap and detergents and other chemical products not elsewhere classified.

The results for the year are set out on page 15.

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:

The company is engaged in several programmes of research and development in support of the products and services that it provides to its existing customer base and also in development of new products and services to continue its growth.

Environment and legislation

The Directors are pleased to report that company’s operations are conducted such that it complies with all legal requirements and especially those relating to the environment. The management have been focused on best practice heath and safety processes, with significant resources being applied in this area.

UK legislation and compliance with industry benchmark systems, including UK REACH, will continue to impact upon the company. The Directors are fully committed to meet these requirements.

The Company give full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person.

Where existing employees become disabled, it is the company’s policy where practicable, to provide continuing employment under normal terms and conditions and to provide training, career development and promotion to disabled employees wherever appropriate.

Diversity

Industrial Chemicals Ltd practice equal opportunities and welcome diversity in all its forms, recognising the value of diversity in the workplace and its rewards of encouraging creativity, broader cultural understanding and access to a wider pool of talent.

Employee engagement

Employee engagement is about making sure that our people feel involved in the company and are committed to its goals. If we are to keep them engaged, communication must be two way with a culture that encourages employee feedback.

To this end the Company communicates with employees by a number of means including meetings, announcements and electronic media to furthering understanding and engagement in the Company’s overall goals and objectives.

Employee training and development

The Company’s success in developing people is based on finding the right blend of learning on the job, through engaging and challenging tasks, learning from colleagues through collaboration, coaching and monitoring, and formal learning through structured training, education and development programmes.

The Company will continue to develop and promote what it considers the right combination of learning experiences that help accelerates personal development. The Company continues to provide tailored initiatives to meet their business needs, including financial training programmes (ACMA, AAT), health and safety training, leadership skills, technical training and apprenticeships.

The Company remains committed to providing opportunities for career development. In some areas the Company has recruited from external markets, as a result of specific skills requirements such as IT or CAD design for example.

Going concern

The directors are confident that we will continue to be the UK market leader in water treatment chemicals and are committed to improving our market offering, striving for operational excellence across all our sites, with safety at the centre of everything that we do.

We have implemented a range of strategic initiatives to lower our operating costs, improving our working capital management, which will continue to generate strong cashflows. The Company has access to considerable financial resource and has rigorous procedures for identifying, quantifying and mitigating all aspects of risk relevant to the business.

The directors have confidence that the Company has adequate resources to continue in operational existence for the foreseeable future, with further asset investments planned to expand our capacity, lower our environmental impact, and increase our productivity, securing our long term future.

Donations

The Company made no political contributions during the year (2023: £nil).

Details of our relationship with our customers and suppliers are set out in the strategic report.

In accordance with the company's articles, a resolution proposing that Rickard Luckin Limited be reappointed as auditor of the company will be put at a General Meeting.

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;

• state whether applicable UK Accounting Standards 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 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.

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.

We have audited the financial statements of Industrial Chemicals 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 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 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.

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.

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

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management and via inspection of the company’s regulatory and legal correspondence.

We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: operating licences regarding the handling of chemicals and waste; employment legislation; health and safety and environmental legislation; trade legislation; data protection legislation; anti-bribery and anti-corruption legislation.

ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations, and no procedures over and above those already noted are required.

In relation to fraud, we performed the following specific procedures in addition to those already noted:

• Challenging assumptions made by management in its significant accounting estimates in particular: stock provisions and overhead absorption;

• Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations and large or unusual entries;

• Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;

• Ensuring that testing undertaken on both the performance statement, and the Balance Sheet includes a number of items selected on a random basis; and

• Discussions with management.

These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.

Use of our report

This report is made solely to the company's member 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 member 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 member 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.

Industrial Chemicals Limited is a private company limited by shares incorporated in England and Wales. The registered office is Jupiter House, Warley Hill Business Park, The Drive, Great Warley, Brentwood, Essex, CM13 3BE.

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 £.

In accordance with section 1 of FRS 102, the company has taken advantage of the following exemptions:

- The requirement not to produce a Statement of Cash Flows and related notes.

- The requirement not to disclose key management personnel compensation.

Industrial Chemicals Limited is a wholly owned subsidiary of Industrial Chemicals Group Limited and the results of Industrial Chemicals Limited are included in the consolidated financial statements of Industrial Chemicals Group Limited which are available from Jupiter House, Warley Hill Business Park, The Drive, Brentwood, Essex, CM13 3BE.

These financial statements have been prepared under the going concern basis. true

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

When cash inflows are deferred and represent a financing arrangement, the promised consideration is adjusted for the effects of the time value of money, which 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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.

Cost is calculated at the cost of the purchase of raw materials including delivery charges on a first in, first out basis and in some instances a weighted average cost, together with the direct cost of conversion including an appropriate allocation of production overhead costs based on normal utilisation rates of production plants, provided that they are related to the production process. Borrowing costs are not included in the cost of conversion.

For weighted average cost, the stock entering the system is as above, but out going stock is calculated at an ongoing weighted charge.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Consignment stock

The company holds consignment stock of raw materials. Where the risks and rewards of ownership of this stock are retained by the supplier, the consignment stock is not included within stock at the balance sheet date. Where the risks and rewards of the stock are attributable to the company, consignment stock is included in the balance sheet.

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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Trade debtors, loans and other debtors that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and debtors'. Loans and debtors are measured at amortised cost using the effective interest method, less any impairment.

Interest is recognised by applying the effective interest rate, except for short-term debtors when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

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 trade and other creditors, bank loans and loans from fellow group companies 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 receipts discounted at a market rate of interest.

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. Trade creditors 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.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

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.

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 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.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Exceptional Items

Income and expenses classified as exceptional are shown separately on the face of the profit and loss account. Income and expenses are treated as exceptional in nature if they are significant one off income or expenses and are note expected to reoccur.

Management charges

Appropriate overheads are apportioned between the trading companies.

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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

In accordance with FRS 102, a proportion of direct overheads relating to the production of stock is included in the cost of stock. This involves a certain amount of estimation in calculating the level of overheads to be included in the cost.

The directors have made provisions against raw material and finished goods where they estimate the recoverable value of stock is lower than the cost, based on age, condition and location of stock.

An analysis of the company's turnover is as follows:

During the current year £1.7m was received from The Department for Business and Trade, being compensation for direct costs, this income was recognised within Other operating income. In the prior year similar income amounting to £721k was recognised within sales.

The HSE fine of £2,400,000 relates to a fine under the Health and Safety at Work Act 1974 relating to an operational incident in 2020. A further £100,000 fine for the same incident relates to charges under the Environmental Permitting Regulations 2016 which are payable by ICL.

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).

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

At the period end the directors made a provision for old and damaged stock including discontinued stock lines. During the period there was a net debit of £203,668 (2023: £786,548) in respect of the movement in the stock provision to the profit and loss account.

Stock included raw materials and finished goods that are subject to reservation of title until they have been fully paid for.

The bank overdraft relates to a confidential invoice discounting scheme which is secured against the corresponding sales invoices. It is also secured by personal guarantees from CD Carver and AR Carver, the directors of the company, in the event of certain conditions being present and there is a loss to the providers of the scheme. After the balance sheet date the facility was refinanced, and the personal guarantees provided by CD Carver and AR Carver were removed.

The bank have a fixed and floating charge over the assets of the company.

A provision has been made for fines payable by the company for infringements under the Health and Safety at Work Act 1974 the Environmental Permitting Regulations 2016. These are in relation to an operational incident in 2020.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so.

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.

Contributions totalling £218,395 (2023: £222,800) were payable to the fund at the year end and are included in creditors.

The ordinary shares carry full voting rights and full rights to dividends and distributions.

Amounts contracted for but not provided in the financial statements:

The profit and loss reserves are wholly distributable.

The company has entered into an Omnibus Guarantee and Set-Off Agreement, dated 21 November 2013, in respect of the current and future facilities provided to its fellow group companies by Lloyds Bank Plc. At the year end this contingent liability amounted to £nil (2023: £2,125,000) in respect of Industrial Chemicals Group Limited.

The company has entered into an agreement in respect of amounts loaned by the common directors and the trusts, between Industrial Chemicals Limited and the parent company, Industrial Chemicals Group Limited. At the year end this amounted to £271,558 (2023: £1,071,342) in respect of Industrial Chemicals Group Limited.

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:

The company has taken advantage of the exemption available in FRS 102 from the requirement to disclose transactions with wholly owned group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company.

As at 31 December 2024, the company was owed £42,560,648 (2023: £38,082,510) by its parent company. The balance is included within debtors.

During the year the company was charged £3,817,523 (2023: £2,455,319) by a related company, for services rendered. At the balance sheet date £279,281 (2023: £nil) was owed to this company. This company is related by virtue of a family connection between the directors and shareholders of each company.

During the year the company paid expenses of £2,300 (2023: £146,559) on behalf of a related company. This company is controlled by one of the directors of Industrial Chemicals Limited.

Total rent paid to directors' during the year amounted to £3,355,000 (2023: £3,180,000).

For the current and prior year the immediate and ultimate parent company is Industrial Chemicals Group Limited, a company registered in England and Wales. The registered office of the parent company is Jupiter House, Warley Hill Business Park, The Drive, Brentwood, Essex, CM13 3BE.

Industrial Chemicals Group Limited prepare group financial statements and copies can be obtained from the Registrar of Companies, Companies House, Maindy, Cardiff, CF14 3UZ.

For the current and prior year there is no ultimate controlling party.