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

The principal activities of the group continued to be the development and commercialisation of generic and other pharmaceutical products, manufacturing of plastic products and food additives. The principal activity of the company continued to be that of a holding company.

OBG Holding looks to invest in manufacturing, development and distribution business in the Pharmaceutical, Polymer, Industrial Additives, and Food and Beverage sectors, working in partnership with autonomous management teams in each of its portfolio companies to develop and execute strategies to sustainably grow, organically and inorganically.

The group has made a number of strategic acquisitions over the past few years, most recently Faber & VanderEnde B.V and Faber & VanderEnde GmbH (''Faber''), which are direct subsidiaries of Richard Baker Harrison Limited. These acquisitions continue to perform well and strengthen the already existing core offering of products within the group.

In the prior year, on 13 September 2023, a subsidiary within the group, Pharmaserve (North West) Limited, went into administration and discontinued to trade.

The results for the group show total turnover for continuing operations of £61.7m (2023: continuing operations of £61.0m) and an operating profit pre exceptional items of £1.5m (2023: £1.7m).

In the current year the group incurred exceptional costs of £0.8m (2023: £1.3m).

The group has net assets at 31 December 2024 of £29.5m (2023: £31.2m).

See key performance indicators for further information.

The management of the business and the execution of the group's strategy are subject to a number of risks:

Environmental pressures

The group will be introducing solar energy systems, coupled with improved efficiency of its machinery which will reduce reliance on non-renewable power and lower electricity consumption. Product development has also advanced to include the use of recycled raw materials and biodegradable components, reducing waste and supporting the transition to a more sustainable product range.

Liquidity risk

The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the businesses.

Interest rate risk

The group has fixed rates in respect of its invoice discounting facility and hire purchase agreements so there is limited exposure to changes in interest rates.

The group has a combination of both fixed rate and semi-fixed rates of interest on its bank loan facilities. The fixed interest rate is in place until July 2026. The semi-fixed interest rate ensures that interest rate exposure is only impacted by movements in SONIA.

Foreign currency risk

The group's principal foreign currency exposures arise from trading with overseas companies. The group's policy permits, but does not demand, that these exposures may be hedged in order to fix the cost in sterling. The group also uses a foreign invoice discounting facility to manage its currency risk. There were no forward contracts committed to at the year end.

Principal risks and uncertainties (continued)

Credit risk

The group monitors credit risk closely and considers that its current credit checking policy meets its objectives of mitigating risk in this area. All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are reviewed on a regular basis and provision is made for doubtful debts when necessary.

Commercial risk

Since the UK's vote to leave the EU, the group has not encountered any material adverse impacts that might be directly attributable to Brexit. The business has engaged with professional advisors resulting in the creation of structures to enable the business to continue to trade in its current markets.

The group strategy is one of growth with improved profitability. The directors monitor progress against this strategy by reference to a number of financial key performance indicators. Performance for the current year, together with comparative data for the previous year, is set out below:

(a) Group turnover

Group turnover in the year was £61.7m (2023: £65.9m) split between continuing operations of £61.7m (2023: £61.0m) and discontinued operations of £nil (2023: £4.8m). The directors note the stable revenue year on year in continuing operations, with projected turnover in 2025 set to increase.

(b) Group gross profit %

This is gross profit expressed as a percentage of turnover. Group gross profit % for 2023 was 24% (2023: 25%). This was predominantly driven by sales mix across the group. The directors have looked to drive further synergistic opportunities across the group to maintain and improve margins, including management of supply chains and reviews of other relevant costs.

(c) Group operating profit - continuing operations

On a pre-exceptional basis the group operating profit for continuing operations was £1.5m (2023: £1.7m).

Over the coming years the group will continue to look to invest and seek growth. The external commercial environment is expected to remain competitive and the group will continue to prepare and mitigate against any external factors which might impact on the group. However, the directors are confident that the current level of performance will be maintained in the future.

The directors, in line with their duties under s172 of the Companies Act 2006, act in a way they consider, in good faith, would be most likely to promote the success of the group for the benefit of its members as a whole, and in doing so have regard to a range of matters when making decisions for the long term.

(a) the likely consequences of any decisions in the long term

The board has a formal business case sign off process/policy. Any investment decisions must be signed off by the board of directors and the long term future of the business is taken into account within this process. If the board of directors rejects the proposal, the business case will not be accepted or progressed.

In addition, monthly board meetings are held between the board of directors and executive teams with any significant decisions discussed.

(b) the interests of the group's employees

The group's employees are at the forefront of any decisions taken by the board of directors. The group have invested in the introduction of a People Operations Team and a HR system with the aim of increasing employee engagement and communication between the group and its employees.

(c) the need to foster the group's business relationships with suppliers, customers and others

The group relies heavily on the long term relationships with its suppliers and customers.

The board of directors have invested in its supply chain function to help improve supplier relationship management utilising a systematic approach of assessing suppliers' contributions and influence on success, determining tactics to maximise suppliers' performance and developing the strategic approach for executing on these determinations. This will create positive buyer-supplier relationships and determine which activities to engage in with each supplier.

The board of directors have a 'Customers Service First' policy in operation, focusing on ensuring solid foundations for any customer relationship. Customers are managed by dedicated business managers and internal sales representatives. The board of directors have invested in a technical function to support customer development and continue to build on the long term customer relationship that have been in place over many years.

(d) the impact of the group's operations on the community and the environment

The board of directors support and promote activity across the group to participate and donate towards charitable fundraising within the local communities.

(e) the desirability of the group maintaining a reputation for high standards of business conduct

The board of directors employs suitably qualified and trained employees within each department as well as investing in the necessary systems. This allows the group and company to build sustainable businesses for strong financial results.

(f) the need to act fairly between members of the group

The board of directors understand the need to act fairly between members of the group. There are formal whistle blowing and grievance procedures in place which are detailed in the staff handbook which is accessible for all employees.

On behalf of the board

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

This report contains the statutory information disclosed in addition to that set out in the strategic report. Information relating to the group and company's principal activity, financial risk management policies, future developments, engagement with employees, and engagement with suppliers, customers and others, which would otherwise be included in the directors' report, is included in the strategic report.

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £120,000. The directors do not recommend payment of a further dividend.

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

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The auditor, DSG Audit, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Whilst the overall group has consumed more than 40,000 kWh of energy in this reporting period, none of the individual subsidiaries are large as defined by Companies Act 2006. In preparing this group directors' report, we have taken advantage of the option to exclude any energy and carbon information relating to those subsidiaries.

As the parent company has no trading activity, there is no energy and carbon information to be reported in respect of the parent company.

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 auditor of the company 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 auditor of the company is aware of that information.

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 group and company, and of the profit or loss of the group 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;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of OBG Holding Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2024 and of the group's 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's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent 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 group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company 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 parent 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 parent 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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

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

The following laws and regulations were identified as being of significance to the group and the parent company:

• Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation.

• Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the group and therefore may have a material effect on the financial statements include compliance with medicines and healthcare product regulations, environmental management systems regulations, quality management systems regulations, food safety laws, drug licencing, waste regulations, transport regulations, packaging regulations, UK Reach regulations, quality management and assurance standards, goods distribution practice, wholesale distribution authorisation for humans and wholesale dealer authorisation for animals regulations, health and safety legislation and General Data Protection requirements. It is considered that there are no fundamental laws and regulations for which non-compliance may be fundamental to the operating aspects of the parent company.

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

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

A further description of our responsibilities 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.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £120,000 (2023 - £80,000 profit).

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

OBG Holding Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Ayrton House, Commerce Way, Liverpool, L8 7BA.

The group consists of OBG Holding Limited and all of its subsidiaries.

The principal activity of the group and company is disclosed in the strategic report.

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 £1.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and other fixed assets at fair value. The principal accounting policies adopted are set out below.

The 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 for parent company information presented within the consolidated financial statements:

• Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;

• 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’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; 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.

During 2016 the group underwent a corporate restructure which involved the insertion of a new holding company (OBG Holding Limited) above the previous holding company (OBG Pharmaceuticals Limited) effected by a share for share exchange. The consolidated balance sheet has therefore been prepared on a merger accounting basis.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

The consolidated financial statements incorporate those of OBG Holding Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The group generated an operating profit pre-exceptional items of £1.5m (2023: operating profit pre-exceptional items on continuing operations of £1.7m) albeit a loss before tax on continuing activities of £1.3m (2023: loss before tax of £1.7m) mainly due to interest incurred on bank facilities held across the group. The group balance sheet has remained robust with net current assets of £4.5m (2023: £2.3m) and overall net asset position of £29.5m (2023: £31.2m). 

The group meets it day to day working capital requirements through the use of free cash and an invoice discounting facility. In addition the group makes use of term facilities made available by its bankers which are subject to certain covenant tests. The group's forecasts and projections, taking account of reasonably possible changes in trading performance, indicate that the group is expected to operate within the level of its available banking facilities and that covenant tests are expected to be satisfactorily achieved.

The group prepares forecasts which indicate that the group and company will continue to generate cash, over the period considered by them in their assessment of the appropriateness of adopting the going concern basis in the preparation of these financial statements.

Management has also considered the on-going impact of the operational challenges posed by the wider global economy, including but not restricted to, an assessment of the robustness of their supply chain and broader logistics arrangements. Management has concluded that any continued operational pressures caused directly are unlikely to have a material impact on the group and company and these are being actively management day-to-day. Having made appropriate enquiries, the directors consider it appropriate to prepare these financial statements on a going concern basis.

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 and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Turnover represents rental income which is recognised in accordance with underlying lease terms.

Turnover represents amounts receivable net of VAT and trade discounts and relates to royalties receivable from the exploitation of product patents and from product licence arrangements. Licence fees are recognised at the point upon which the rights are transferred to the customer.

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.

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.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is between 10 and 20 years.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

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 recognised in the profit and loss account.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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 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.

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.

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 group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and 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.

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.

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 group 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 group 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.

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 group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group 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 group.

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 group’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 if, and only if, there is 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 group has a legal or constructive present obligation as a result of a past event, it is probable that the group 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 leased asset are consumed.

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

Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial performance of the group and the company. They are material items of income or expenditure which are of exceptional size or incidence.

In the application of the group’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 group makes a provision for certain mandated compliance costs imposed upon certain companies within the group that import or manufacture certain chemicals under UK REACH (Registration, Evaluation, Authorisation and Restricted Chemicals). The provision is based upon current levels of usage or import volumes of chemicals covered by this legislation. Whilst the company has received guidance as to the basis for providing for compliance costs, actual costs are not expected to crystallise until 2025-26 and hence the provision recognised in these financial statements represents a management estimate which is reviewed on an annual basis. See note 27 for further details.

Key sources of estimation uncertainty

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.

The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual value of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. Changes in the useful economic life of assets are accounted for by amending the prospective useful economic life and the annual depreciation charge over the remaining useful life of the asset. See note 16 for further details.

The annual amortisation charge for intangible assets is sensitive to changes in estimated useful life and the continued value of goodwill to the group. The useful economic life and values are re-assessed annually. They are amended when necessary to reflect current estimates based on value to the group and commercial viability. The remaining useful life is considered a source of significant estimation uncertainty. Changes in the useful economic life of assets are accounted for by amending the prospective useful economic life and the annual amortisation charge over the remaining useful life of the asset. See note 15 for further details.

Certain subsidiaries have recognised deferred tax assets in the current year and prior year. The recognition and measurement of deferred tax assets require significant judgement, particularly in forecasting future taxable profits and assessing the likelihood of utilising tax losses before expiry.

The deferred tax assets are made up of operating loss carry forwards that can be used to offset taxable income in future periods and reduce any taxes payable in those future periods. The carry forward losses will expire if they are not used within certain periods.

At this time, the directors consider it more likely than not that they will have sufficient taxable income in the future that will allow them to realise these deferred tax assets for certain subsidiary undertakings. Changes in tax laws and rates may also affect recorded deferred tax assets and liabilities and our effective rate in the future. This continues to be monitored by the directors and any rates enacted subsequently applied in the relevant periods.

See note 26 for further details.

A key source of estimation and uncertainty relates to the valuation of freehold property where a valuation is obtained annually, as at 31 December, either by professionally qualified external valuers, or by the group's directors. The evidence to support these valuations is based primarily on recent, comparable market transactions on an arm's length basis. Freehold property valuations are one of the principal uncertainties of the group.

The value of freehold properties as at 31 December 2024 is £16.1m (2023: £17.5m). See note 16 for further details.

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

Other operating income relates to the removal of certain equipment from a subsidiary undertakings premises of £510,000 (2023: £nil), reimbursed expenses for rented properties of £109,106 (2023: £nil), and sale of scrap materials of £9,936 (2023: £nil).

Exceptional costs in the current year relate to the write off of balances and costs borne for a related party now in liquidation of £439,658 (2023: £nil), redundancy costs of £275,446 (2023: £236,205), M&A and re-finance costs of £nil (2023: £277,040), legal and recruitment fees of £82,243 (2023: £428,808), stock and balance sheet clear outs of £3,344 (2023: £273,409), and consultancy and compliance costs of £20,449 (2023: £75,310).

See note 12 for details relating to the loss arising on discontinued operations in the prior year.

The average monthly number of persons (including directors) employed by the group and 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 3 (2022: 3).

The actual charge/(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:

There are no discontinued operations in the current year.

In the prior year, on 13 September 2023, a subsidiary undertaking, Pharmaserve (North West) Limited, went into administration and was therefore presented as a discontinued operation in the financial statements. In the prior year, the company made an operating loss pre-exceptional items of £3.1m and the business incurred exceptional costs of £0.3m.

A loss on disposal of Pharmaserve (North West) Limited was recognised in the profit and loss account for £6.2m representing the net assets of the company at that date.

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

Development costs have been capitalised in accordance with the requirements of FRS 102 and are therefore not treated, for dividend purposes, as a realised loss.

Assets have been transferred between tangible fixed assets and intangible fixed assets categories as this was deemed a more appropriate classification by the directors.

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

Included within the assets held under finance leases above, is an asset with a carrying amount of £363,581, which was financed through a chattel mortgage agreement entered into during the year.

Assets have been transferred between tangible fixed assets and intangible fixed assets categories as this was deemed a more appropriate classification by the directors.

During the prior year the company sold a piece of plant and machinery with a NBV of £3,051,216 to a company under common control and entered into an operating sale and leaseback arrangement. The transaction led to a loss crystalising on sale of £153,216.

Details of the company's subsidiaries at 31 December 2024 are as follows:

As permitted by the reduced disclosure framework within FRS 102, the company has taken advantage of the exemption from disclosing the carrying amount of certain classes of financial instruments, denoted by 'n/a' above.

The stock provision at the year end is £30,000 (2023: £89,694).

Invoice discounting is secured on trade debtors.

Bank loans of £14,225,000 (2023: £11,225,000) drawn down from HSBC UK Bank plc are secured via a debenture including First Fixed Charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and First Floating Charge over all assets and undertaking both present and future.

Bank loans of £8,300,000 (2023: £9,100,000) relates to a loan facility with HSBC UK Bank plc. The loan is repayable in quarterly instalments over 5 years. The last repayment instalment shall be repaid on the termination date and will be the balance of the outstanding loan. The rate of interest on the loan is the percentage rate per annum which is the aggregate of the Margin and Base Rate.

Finance lease payments represent rentals payable by the company or group 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 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

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

The deferred tax asset is expected to reverse within 12 to 48 months and predominantly relates to the utilisation of tax losses against future expected profits of the same period.

The directors will continue to review the recoverability of deferred tax assets at each reporting date.

The group makes a provision for certain mandated compliance costs imposed upon certain companies within the group that import or manufacture certain chemicals under UK REACH (Registration, Evaluation, Authorisation and Restricted Chemicals). The provision is based upon current levels of usage or import volumes of chemicals covered by this legislation. Whilst the company has received guidance as to the basis for providing for compliance costs, actual costs are not expected to crystallise until 2025-26 and hence the provision recognised in these financial statements represents a management estimate which is reviewed on an annual basis.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Called up share capital represents the nominal value of shares that have been issued.

Each ordinary share carries full rights in the company with respect to voting, dividends, and distributions.

At the date of the approval of these financial statements, the company has 400 issued ordinary shares of £0.01 each. See note 34 for further details.

Revaluation reserve represents unrealised increases in carrying value based upon expert third party valuations.

Other reserves

Other reserves represents the merger reserve being the difference between the original cost of investment and the nominal value of the ordinary shares issued during the group re-organisation for group. The company only merger reserve represents the difference between the consideration paid and the nominal value of the ordinary shares issued.

Profit and loss reserves includes all current and prior year retained profits and losses including dividends.

The company and certain subsidiaries are party to a multilateral guarantee in respect of amounts owed to HSBC Bank plc. The subsidiaries who are party to this multilateral guarantee are listed below:

OBG Pharmaceuticals Limited

Ransom Naturals Limited

Ayrton Saunders and Company Ltd

RBH Repacking Services Ltd

Hubron (International) Limited

Richard Baker Harrison Limited

A subsidiary undertaking, Hubron (International) Limited, is party to a guarantee in favour of HM Revenue & Customs for £52,000 and £34,000, and is party to a guarantee in favour of Total Energies Belgium for €227,273.

A subsidiary undertaking, Richard Baker Harrison Limited, is party to a Group Class Guarantee Facility in favour of HM Revenue & Customs for £200,000.

A subsidiary undertaking, OBG Pharmaceuticals Limited, has a Foreign Currency Loan Revolving Credit facility of £17,500,000 and a Foreign Bills of Negotiation facility of £20,000.

A subsidiary undertaking, OBG Property Holding Limited, has a Flexible Business Loan facility of £8,300,000.

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

In the prior year the group put in place an operating sale and lease back arrangement for a piece of plant and machinery with a company under common control. The lease is over a 7 year terms and payments of £47,986 are being made on a monthly basis.

Amounts contracted for but not provided in the financial statements:

On 28 February 2025, a subsidiary undertaking, OBG Pharmaceuticals Limited, executed a share charge in favour of HSBC UK Bank plc over its entire holding of 1 ordinary share in Richard Baker Harrison (Ireland) Limited, a fellow subsidiary undertaking and a private company limited by shares in Ireland with company number 640715. The charge constitutes a fixed charge and includes a negative pledge over the shares and associated rights, securing all present and future liabilities of the company to HSBC UK Bank plc under its existing banking arrangements. The charge does not affect the company’s assets or liabilities as at the balance sheet date.

On 20 March 2025, a subsidiary undertaking, Richard Baker Harrison Limited, entered into a deed of pledge of shares, whereby they pledged their shares in Faber & VanderEnde B.V to HSBC UK Bank plc as security for obligations under the invoice discounting facility. This arrangement provides HSBC UK Bank plc with a first ranking right of pledge over the secured assets as security which can be enforced in the event of default under the facility. The deed of pledge does not affect the company’s operational control or shareholding structure as of the balance sheet date.

On 1 April 2025, the company, OBG Holding Limited, passed a resolution to sub-divide its share capital. The existing 40 ordinary shares of £0.10 each were sub-divided into 400 ordinary shares of £0.01 each. The aggregate nominal value of the share capital remained unchanged at £4.00. Each ordinary share carries full rights in the company with respect to voting, dividends, and distributions, including on a winding up. The shares are not redeemable.

On 25 July 2025, a subsidiary undertaking, Hubron (International) Limited, entered into a chattel mortgage agreement to finance items of plant and machinery with a value of £308,700. This event does not effect amounts recognised in the financial statements as of the balance sheet date.

Remuneration of key management personnel is disclosed in Note 8.

Transactions with related parties

Included in other debtors are amounts due from companies outside of the OBG Holding group with common shareholders of £3,675,222 (2023: £1,796,673).

Included in other creditors are amounts due to companies outside of the OBG Holding group with common shareholders of £2,937,100 (2023: £2,594,032).

These amounts are interest free, undertaken on an arms length basis and are repayable and payable on demand.

Included within exceptional items are costs borne by the group for a company in liquidation with common shareholders and directors of £439,658 (2023: £nil).

In the prior year, a subsidiary undertaking sold a piece of plant and machinery to a company under common control and entered into a sale and leaseback arrangement. See Note 16 for details on disposal and Note 32 for further details of lease commitment. Operating lease payments of £575,831 (2023: £239,930) were made in the year. The company is considered to be a related party due to common shareholders and directors.

The ultimate controlling party as at the year end 31 December 2024 and up to 31 March 2025 was Mr G F O'Brien. The ultimate controlling party from 1 April 2025 is Mr P M O'Brien.