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Registered number: 04987690 ARCH UK BIOCIDES LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
ARCH UK BIOCIDES LIMITED COMPANY INFORMATION
Directors | N T Carter
| J T Petkov
| J R Wirtz
Company secretary | N Carter
Registered number | 04987690
Registered office | Hexagon Tower Crumpsall Vale
| Blackley
| Manchester
| M9 8GQ
Independent auditor | Rödl & Partner Limited
| 170 Edmund Street
| Birmingham
| B3 2HB
ARCH UK BIOCIDES LIMITED CONTENTS
| Page
Strategic report | 1 - 2
Directors' report | 3 - 4
Independent auditor's report | 5 - 9
Statement of comprehensive income | 10
Balance sheet | 11
Statement of changes in equity | 12
Notes to the financial statements | 13 - 39
ARCH UK BIOCIDES LIMITED STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2024
Business objectives and strategy
The Company's principal activity is that of a manufacturer and distributor of chemicals, globally to a wide range of industries. The Company intends to achieve its objectives by further developing substrates and applications of its core products, and seeking alternative markets.
Business model
The principal activity of the Company is the manufacture and distribution of biocides for a variety of uses, including building products, textile applications and health and hygiene products.
Development and performance during the year
Total sales in 2024 were £39.7m compared to prior year £40.8m. The business strives to optimise its global supply chain costs and administrative burden to enhance overall margin performance. Overheads are being monitored by management.
Position at year end and prospects
The Company remains well positioned at year end with new products in development. The Company remains invested in its operation in India. Prospects for sales growth are deemed to be fair despite the current uncertain global economic outlook.
The principal risks and uncertainties facing the business
The implementation of global trade sanctions and risk of escalation in 2025 is a major threat to the business. The Company transacts in all the major currencies, and management frequently examine exposure and take the appropriate measures to avoid unnecessary risks from exchange rate fluctuations. A serious accident or environmental incident could result in operational problems, additional cost and possible regulatory action.
Going concern
The directors’ assessment of the Company’s going concern status is set out in note 2.3 to the financial statements.
Key performance indicators
The directors monitor the following principal key performance indicators: Page 1
ARCH UK BIOCIDES LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
Future developments
The Company remains well positioned at year end with new products in development. The Company remains invested in its operation in India.
Streamlined Energy and Carbon Reporting (SECR)
In accordance with the requirements of The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, the Company has assessed its total UK energy consumption and confirms that it is below the 40,000 kWh threshold. As a result, the Company qualifies as a low energy user and is exempt from making detailed SECR disclosures for the year ended 31 December 2024.
Section 172 statement
As a Board we have always taken decisions for the long-term and collectively and individually our aim is always to uphold the highest standard of conduct and act fairly. Similarly, we understand that our business can only grow and prosper over the long-term if we understand and respect the views and needs of our customers, colleagues and the communities in which we operate, as well as our suppliers, the environment and the shareholders to whom we are accountable. We ensure that the requirements of s172 Companies Act 2006 are met and the interests of our stakeholder groups are considered through a combination of the following: −An employee engagement survey is completed periodically. −The board wants to ensure that customers get the best of the products and services offered, and guarantee continual improvement and efficiency, committed project managers, and compliance with strict quality and regulatory standards. −The Group's Supplier Code of Conduct governs how the board evaluate and set high standards for suppliers. −Employees are required to take Code of Conduct training every year which includes an integrity pledge certificate. Additionally, employees have to pass tests in online training courses on anti-bribery, competition law, insider trading and conflicts of interest, All employees explicitly consent to uphold the values expressed in the Code of Conduct. This report was approved by the board and signed on its behalf by:
N T Carter Director
Date: 10 November 2025
Page 2
ARCH UK BIOCIDES LIMITED DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 The directors present their report and the financial statements for the year ended 31 December 2024.
Principal activity
The principal activities, the performance and developments during the year, the future developments, the principal risks and uncertainties and the key performance indicators are discussed in detail in the strategic report.
Directors' responsibilities statement
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. 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 judgments 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 Company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Directors
The directors who served during the year were:
N T Carter
J T Petkov
J R Wirtz (appointed 10 June 2024) A W Kelly (resigned 10 June 2024)
Results and dividends
The profit for the year, after taxation, amounted to £3,431 thousand (2023 - £4,747 thousand). No dividends were declared in the year (2023: £nil). The directors do not recommend payment of a final dividend. Page 3
ARCH UK BIOCIDES LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
Political contributions
The Company made no political donations or incurred any political expenditure during the year (2023: £nil).
Qualifying third party indemnity provisions
During the year the Company had in force an indemnity provision in favour of one or more directors of the Company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006.
Employees
It is company policy to keep employees informed of matters affecting their interests through normal management channels and due consideration is given to their interest when making management decisions. The Company arranges presentations by directors and managers together with briefing groups at which topical information is discussed with employees. The involvement of employees in the company's performance is encouraged through participation in profit related incentive payment schemes. The policy of the Company for the employment of disabled persons is to give them equal opportunities with other employees to train for and attain any position in the Company having regard to the maintenance of a safe working environment and the constraints of their disabilities. Close attention is given to the welfare of employees with particular regard to the requirements of the health and safety legislation.
Disclosure of information to auditor
Each of the persons who are directors at the time when this directors' report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Auditor
The auditor, Rödl & Partner Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. This report was approved by the board and signed on its behalf by:
N T Carter Director
Date: 10 November 2025
Page 4
ARCH UK BIOCIDES LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARCH UK BIOCIDES LIMITED
Opinion
We have audited the financial statements of Arch UK Biocides 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 the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (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 United Kingdom, including the Financial Reporting Council'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. Page 5
ARCH UK BIOCIDES LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARCH UK BIOCIDES LIMITED (CONTINUED)
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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit: ∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and ∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the 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.
Responsibilities of directors
As explained more fully in the Directors' responsibilities statement set out on page 3, 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. Page 6
ARCH UK BIOCIDES LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARCH UK BIOCIDES LIMITED (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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: ∙Enquiry of management and those charged with governance around actual and potential litigation and claims; ∙Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropiateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias; ∙Reviewing minutes of meetings of those charges with governance; and ∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations. Page 7
ARCH UK BIOCIDES LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARCH UK BIOCIDES LIMITED (CONTINUED) As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control. ∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. ∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. ∙Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Page 8
ARCH UK BIOCIDES LIMITED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARCH UK BIOCIDES LIMITED (CONTINUED)
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. Imran Farooq (Senior statutory auditor) for and on behalf of Rödl & Partner Limited Birmingham, United Kingdom 10 November 2025 Page 9
ARCH UK BIOCIDES LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024
| 2024 | 2023
Note | £000 | £000
Turnover | 4 | 39,676 | 40,812
Cost of sales |  | (25,805) | (24,592)
Gross profit |  | 13,871 | 16,220
Distribution costs |  | (440) | (322)
Administrative expenses |  | (7,927) | (9,431)
Other operating income | 8 | 217 | 198
Operating profit | 9 | 5,721 | 6,665
Interest receivable and similar income | 10 | 161 | 227
Interest payable and similar expenses | 11 | (1,265) | (604)
Profit before tax |  | 4,617 | 6,288
Tax on profit | 12 | (1,186) | (1,541)
Profit for the financial year |  | 3,431 | 4,747
Other comprehensive income: |  |  |
Remeasurements gain/(loss) on defined benefit pension schemes | 22 | 1,278 | (1,551)
Current taxation | 12 | - | 62
Deferred taxation | 21 | (320) | 322
|  | 958 | (1,167)
Total comprehensive income for the year |  | 4,389 | 3,580
The notes on pages 13 to 39 form part of these financial statements.
Page 10
ARCH UK BIOCIDES LIMITED REGISTERED NUMBER: 04987690 BALANCE SHEET AS AT 31 DECEMBER 2024
|  | 2024 |  | 2023
Note |  | £000 |  | £000
Fixed assets |  |  |  |  |
Tangible assets | 13 |  | 2,305 |  | 1,230
Investments | 14 |  | 442 |  | 442
Pension asset | 22 |  | 5,187 |  | 3,503
|  |  | 7,934 |  | 5,175
Current assets |  |  |  |  |
Stocks | 15 | 6,136 |  | 7,563 |
Debtors: amounts falling due within one year | 16 | 62,019 |  | 55,357 |
Cash at bank and in hand |  | 1,513 |  | 2,658 |
|  | 69,668 |  | 65,578 |
Creditors: amounts falling due within one year | 17 | (13,564) |  | (12,945) |
Net current assets |  |  | 56,104 |  | 52,633
Total assets less current liabilities |  |  | 64,038 |  | 57,808
Creditors: amounts falling due after more than one year | 18 |  | (1,330) |  | (22)
Provisions for liabilities |  |  |  |  |
Deferred tax | 21 | (947) |  | (416) |
Other provisions | 20 | (354) |  | (352) |
|  |  | (1,301) |  | (768)
Net assets |  |  | 61,407 |  | 57,018
Capital and reserves |  |  |  |  |
Called up share capital | 23 |  | 1,644 |  | 1,644
Share premium account |  |  | 26,204 |  | 26,204
Profit and loss account |  |  | 33,559 |  | 29,170
|  |  | 61,407 |  | 57,018
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
N T Carter
Director
Date: 10 November 2025
The notes on pages 13 to 39 form part of these financial statements. Page 11
ARCH UK BIOCIDES LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
| Called up share capital | Share premium account | Profit and loss account | Total equity
| £000 | £000 | £000 | £000
At 1 January 2023 | 1,644 | 26,204 | 25,590 | 53,438
Comprehensive income for the year |  |  |  |
Profit for the year | - | - | 4,747 | 4,747
Remeasurements loss on defined benefit pension schemes | - | - | (1,551) | (1,551)
Current tax on measurement loss on defined benefit pension scheme | - | - | 62 | 62
Deferred tax on measurement loss on defined benefit pension scheme | - | - | 322 | 322
At 1 January 2024 | 1,644 | 26,204 | 29,170 | 57,018
Comprehensive income for the year |  |  |  |
Profit for the year | - | - | 3,431 | 3,431
Remeasurements gain on defined benefit pension schemes | - | - | 1,278 | 1,278
Deferred tax on measurement loss on defined benefit pension scheme | - | - | (320) | (320)
At 31 December 2024 | 1,644 | 26,204 | 33,559 | 61,407
| The notes on pages 13 to 39 form part of these financial statements.
Page 12
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
1. | General information
Arch UK Biocides Limited (the ''Company'') is a private company limited by shares, incorporated and domiciled in England. The registered office address is at Hexagon Tower Crumpsall Vale, Blackley, Manchester, United Kingdom, M9 8GQ. The Company's principal activity and nature of its operations are disclosed in the strategic report. 2.Accounting policies
| 2.1 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' and the Companies Act 2006. The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3). The following principal accounting policies have been applied:
| 2.2 | Financial Reporting Standard 101 - reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions under FRS 101: ∙the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share-based payment ∙the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations ∙the requirements of paragraph 33(c) of IFRS 5 Non Current Assets Held For Sale and Discontinued Operations ∙the requirements of IFRS 7 Financial Instruments: Disclosures ∙the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement ∙the requirements of IAS 7 Statement of Cash Flows ∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member ∙the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets. This information is included in the consolidated financial statements of Herens Midco S.à.r.l. as at 31 December 2024 and these financial statements may be obtained from 4, rue Albert, Borschette, Luxembourg, L-1246, Luxembourg . The Company has taken advantage of the exemption under Section 401 of the Companies Act 2006 not to prepare consolidated financial statements. The financial statements present information about the Company as an individual entity and not about its group. Page 13
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.3 | Going concern
The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons. The Company made a profit for the year of £3,431k (2023: £4,747k) and at the end of the year had net current assets of £56,104k (2023: £52,633k) and net assets of £61,407k (2023: £57,018k). The directors have performed a going concern assessment which indicates that, taking account of reasonably possible downsides, the company will have sufficient funds, through funding from its intermediate parent company, Arxada Ltd, to meet its liabilities as they fall due during the going concern assessment period. That assessment is dependent on Arxada Ltd not seeking repayment of the amounts currently due to the group, which at 31 December 2024 amounted to £7,371k. Arxada Ltd has indicated its intention to continue to make available such funds as are needed by the Company, and that it does not intend to seek repayment of amounts currently due during the going concern assessment period. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so. Consequently, the directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
| 2.4 | Turnover
Turnover is derived from the principal activity of the company and represents the value of goods supplied, excluding value added tax. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer. Page 14
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.5 | Foreign currency translation
Functional and presentation currency The Company's functional and presentational currency is GBP rounded to the nearest £1,000. Transactions and balances Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
| 2.6 | Employee benefits
Defined benefit plans A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company's net obligation in respect of defined benefit plans and other long term employee benefits is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate as determined at the beginning of the annual period to the net defined benefit liability (asset) taking account of changes arising as a result of contributions and benefit payments. The discount rate is the yield at the balance sheet date on AA credit rated bonds denominated in the currency of, and having maturity dates approximating to the terms of the company's obligations. A valuation is performed tri-annually by a qualified actuary using the projected unit credit method. The Company recognises net defined benefit plan assets to the extent that it is able to recover the surplus either through reduced contributions in the future or through refunds from the plan. Changes in the net defined benefit liability arising from employee service rendered during the period, net interest on net defined benefit liability, and the cost of plan introductions, benefit changes, curtailments and settlements during the period are recognised in profit or loss. Remeasurement of the net defined benefit liability/asset is recognised in other comprehensive income in the period in which it occurs. Page 15
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.7 | Research and development
Expenditure on research activities is recognised in the profit and loss account and other comprehensive income as an expense as incurred. Expenditure on development activities is capitalised if the product or process is technically and commercially feasible and the company intends and has the technical ability and sufficient resources to complete development, future economic benefits are probable and if the Company can measure reliably the expenditure attributable to the intangible asset during its development. Development activities involve a plan or design for the production of new of substantially improved products or processes. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads and capitalised borrowings costs. Other development expenditure is recognised in the profit and loss account and other comprehensive income as an expense as incurred. Capitalised development expenditure is recognised in the profit and loss account and other comprehensive income as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses.
| 2.8 | Finance costs
Interest receivable and Interest payable and similar charges include interest payable, finance charges on shares classified as liabilities and finance leases recognised in profit or loss using the effective interest method, unwinding of the discount on provisions, and net foreign exchange losses that are recognised in the profit and loss account and other comprehensive income (see foreign currency accounting policy). Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial time to be prepared for use, are capitalised as part of the cost of that asset. Other interest receivable and similar income include interest receivable on funds invested and net foreign exchange gains. Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Dividend income is recognised in the profit and loss account and other comprehensive income on the date the entity's right to receive payments is established. Foreign currency gains and losses are reported on a net basis. Page 16
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.9 | Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that: ∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and ∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
| 2.10 | Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount. Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. Depreciation is provided on the following basis:
|  |  |  | Plant and machinery | - | 8-10 years
|  |  |  | Fixtures and fittings | - | 3 years
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss. Page 17
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.11 | Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads. At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
| 2.12 | Non-derivative financial statements
Non-derivative financial instruments comprise investments in trade and other debtors, trade and other creditors, cash and cash equivalents, interest-bearing borrowings and investments in subsidiaries. Trade and other debtors Trade and other debtors are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses. Trade and other creditors Trade and other creditors are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method. Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Company's cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement. Interest-bearing borrowings Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses. Investments in subsidiaries These are separate financial statements of the Company. Investments in subsidiaries are carried at cost less impairment. Page 18
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.13 | Impairment excluding stocks and deferred tax assets
Financial assets (including trade and other debtors) A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between is carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. For financial instruments measured at cost less impairment is calculated as the difference between its carrying amount and the best estimate of the amount that the Company would receive for the asset if it were to be sold at the reporting date. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss. Non-financial assets The carrying amounts of the Company's non-financial assets, other than stocks and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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 the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit"). Non-financial assets An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Page 19
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.14 | Leases
At the inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. Unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. Depreciation is provided on the following basis: Plant and machinery - 10 years Fixtures and fittings - 3 years The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company's incremental borrowings rate. Lease payments included in the measurement of the lease liability comprise the following: ∙fixed lease payments including in-substance fixed payments; ∙variable lease payments that depend on an index or rate, initially measured using the index or rate as at the commencement date; ∙the amount expected to be payable by the lessee under residual value guarantees; and ∙penalties for early terminating of a lease unless the company is reasonably certain not to terminate early. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, to the extent that the right-of-use asset is reduced to nil, with any further adjustment required from the remeasurement being recorded in profit or loss. The Company has elected not to recognise right-of-use assets and lease liabilities for lease of low-value assets and short-term leases. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. Page 20
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.15 | Provisions for liabilities
A provision is recognised in the balance sheet when the Company has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.
| 2.16 | Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
3. | Judgments in applying accounting policies and key sources of estimation uncertainty
The preparation of financial statements in compliance with FRS 101 requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the period. However, the nature of estimation means that actual outcomes could differ from those estimates. Management have identified the following critical judgement or estimate in applying the Company's accounting policies: (i) Defined benefit pension plans (note 22) The pension cost and the defined benefit pension obligation of the Company's defined benefit pension plans are based on a number of selected assumptions; these include the discount rate, inflation rate, salary growth and longevity. Differences arising from actual experience or future changes in assumptions will be reflected in future periods. The effect of changing these assumptions is described in note 22.
4. | Turnover
| An analysis of turnover by class of business is as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Sale of goods | 37,401 | 37,228
| Rendering of services | 2,275 | 3,584
|  | 39,676 | 40,812
Page 21
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
5. | Auditor's remuneration
| During the year, the Company obtained the following services from the Company's auditor:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Fees payable to the Company's auditor for the audit of the Company's financial statements | 44 | 42
| The Company has entered into a limitation agreement with its auditors which was approved on 8th January 2025. The principal terms of the agreement are fair and reasonable.
6. | Employees
| Staff costs, including directors' remuneration, were as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Wages and salaries | 5,408 | 4,701
| Social security costs | 605 | 609
| Expenses related to defined benefit scheme | 1 | 85
| Contributions to defined contribution scheme | 292 | 230
|  | 6,306 | 5,625
| The average monthly number of employees, including the directors, during the year was as follows:
|  |  | 2024 | 2023
|  |  | No. | No.
|  | Administration | 33 | 32
|  | Selling & Distribution | 12 | 13
|  | Research & Technical | 32 | 30
|  |  | 77 | 75
Page 22
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
7. | Directors' remuneration
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Directors' emoluments | 401 | 546
| During the year retirement benefits were accruing to 2 directors (2023 - 3) in respect of defined benefit pension schemes. The highest paid director received remuneration of £241,000 (2023 - £232,000).
| The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £8,000 (2023 - £8,000).
| The sponsor of the defined benefit pension scheme, which the two directors are members of, is another fellow group company. The defined benefit scheme is closed to further accruals.
8. | Other operating income
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| RDEC credit | 189 | 198
| Miscellaneous small items | 28 | -
|  | 217 | 198
9. | Operating profit
| The operating profit is stated after charging:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Research & development charged as an expense | 2,667 | 2,678
| Environmental provision (credited)/charged to profit and loss | (2) | 53
10. | Interest receivable
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Net interest on defined benefit plan assets | 161 | 227
Page 23
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
11. | Interest payable and similar expenses
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Foreign exchange losses | 1,030 | 598
| Interest on lease liability | 235 | 6
|  | 1,265 | 604
12. | Taxation
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Corporation tax |  |
| Current tax on profits for the year | 986 | 1,253
| Adjustments in respect of previous periods | (12) | 37
|  | 974 | 1,290
| Total current tax | 974 | 1,290
| Deferred tax |  |
| Origination and reversal of timing differences | 212 | 234
| Changes to tax rates | - | 9
| Adjustments in respect of prior periods | - | 8
| Total deferred tax | 212 | 251
| Tax on profit | 1,186 | 1,541
Page 24
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 12.Taxation (continued)
| Factors affecting tax charge for the year
| The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 23.52%). The differences are explained below:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Profit on ordinary activities before tax | 4,617 | 6,288
| Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 23.52%) | 1,154 | 1,479
| Effects of: |  |
| Fixed asset differences | 9 | -
| Expenses not deductible for tax purposes, other than goodwill amortisation and impairment | 42 | 31
| R&D expenditure credits | (13) | -
| Other tax adjustments, reliefs and transfers | 1 | -
| Adjustments to tax charge in respect of prior periods | (12) | 45
| Non-taxable income | (2) | (63)
| Unrecognised deferred tax | - | 40
| Group relief claimed | (979) | -
| RDEC group relief | (82) | -
| Payment for group relief | 1,068 | -
| Impact of changes in tax rate | - | 9
| Total tax charge for the year | 1,186 | 1,541
| Factors that may affect future tax charges
The Company has gross unrecognised tax losses of £nil (2023: £nil) and capital losses of £1,302,000 (2023: £1,302,000) that are available indefinitely for offset against future taxable profits and capital gains of the Company, respectively. Deferred tax assets have not been recognised in respect of these losses as there is uncertainty over whether suitable profits will arise in future periods against which the deferred tax assets would reverse. Page 25
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
13. | Tangible fixed assets
|  | Plant and machinery | Fixtures and fittings | Other fixed assets | Total
|  | £000 | £000 | £000 | £000
| Cost or valuation |  |  |  |
| At 1 January 2024 | 2,128 | 1,095 | 448 | 3,671
| Additions | - | 1,454 | 71 | 1,525
| Disposals | - | (639) | - | (639)
| Transfers between classes | 73 | 114 | (187) | -
| At 31 December 2024 | 2,201 | 2,024 | 332 | 4,557
| Depreciation |  |  |  |
| At 1 January 2024 | 1,510 | 931 | - | 2,441
| Charge for the year on owned assets | 89 | 25 | - | 114
| Charge for the year on right-of-use assets | 5 | 281 | - | 286
| Disposals | - | (589) | - | (589)
| At 31 December 2024 | 1,604 | 648 | - | 2,252
| Net book value |  |  |  |
| At 31 December 2024 | 597 | 1,376 | 332 | 2,305
| At 31 December 2023 | 618 | 164 | 448 | 1,230
| The net book value of owned and leased assets included as "Tangible fixed assets" in the Balance sheet is as follows:
|  | 2024 | 2023
|  | £000 | £000
| Tangible fixed assets owned | 1,106 | 1,097
| Right-of-use tangible fixed assets | 1,199 | 133
|  | 2,305 | 1,230
Page 26
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 13.Tangible fixed assets (continued)
| Information about right-of-use assets is summarised below:
| Net book value
|  |  |  | 2024 | 2023
|  |  |  | £000 | £000
| Plant and machinery | 2 | 133
| Fixtures and fittings | 1,197 | -
|  | 1,199 | 133
| Depreciation charge for the year ended
|  |  |  | 2024 | 2023
|  |  |  | £000 | £000
| Plant and machinery | 5 | 108
| Fixtures and fittings | 281 | -
|  | 286 | 108
| Additions to right-of-use assets
|  | 2024
|  | £000
| Additions to right-of-use assets | 1,401
Page 27
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
14. | Fixed asset investments
|  | Investments in subsidiary companies
|  | £000
| Cost or valuation |
| At 1 January 2024 | 819
| At 31 December 2024 | 819
| Impairment |
| At 1 January 2024 | 377
| At 31 December 2024 | 377
| Net book value |
| At 31 December 2024 | 442
| At 31 December 2023 | 442
| Subsidiary undertakings
| The following were subsidiary undertakings of the Company:
| Name | Registered office | Class of shares | Holding
| Arch Protection Chemicals Private Limited | India | Ordinary | 99.99%
| Arch Chemicals Products Limited | England | Ordinary | 100%
| At 31 December 2024, there was no impairment (2023: £nil) being charged to the profit and loss account during the year. During the year the Company made sales of £69,000 (2023: £42,000) and purchased goods of £637,000 (2023: £633,000) with Arch Protection Chemicals Private Limited. At the year end the Company owed Arch Protection Chemicals Private Limited £nil (2023: £23,000) and was owed £19,000 (2023: £28,000) by Arch Protection Chemicals Private Limited.
Page 28
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
15. | Stocks
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Raw materials and consumables | 173 | 737
| Finished goods | 5,963 | 6,826
|  | 6,136 | 7,563
| Raw materials, consumables and changes in finished goods and work in progress recognised as cost of sales in the year amounted to £25,805,000 (2023: £24,592,000).
16. | Debtors
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Trade debtors | 6,988 | 5,327
| Amounts owed by group undertakings | 54,153 | 48,544
| Other debtors | 538 | 1,265
| Prepayments and accrued income | 340 | 221
|  | 62,019 | 55,357
| Amounts owed by other group companies are unsecured and repayable on demand. Interest on loans advanced is calculated at SONIA less 0.25%.
17. | Creditors: Amounts falling due within one year
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Trade creditors | 1,110 | 601
| Amounts owed to group undertakings | 7,371 | 8,561
| Group relief creditor | 2,189 | 1,129
| Lease liabilities | 118 | 124
| Other creditors and accruals | 2,776 | 2,530
|  | 13,564 | 12,945
| Amounts owed to group undertakings are unsecured, interest free and payable on demand.
Page 29
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
18. | Creditors: Amounts falling due after more than one year
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Lease liabilities | 1,330 | 22
19. | Leases
| The following amounts in respect of leases, where the Company is a lessee, have been recognised in profit or loss:
|  |  |  | 2024 | 2023
|  |  |  | £000 | £000
| Interest expense on lease liabilities | 235 | 6
| Depreciation expense on right of use assets | 286 | 108
20. | Provisions
|  | Environmental provision
|  | £000
| At 1 January 2024 | 352
| Charged to profit or loss | 2
| At 31 December 2024 | 354
Page 30
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
21. | Deferred taxation
|  | 2024
|  | £000
| At beginning of year | 416
| Charged to profit or loss | 211
| Charged to other comprehensive income | 320
| At end of year | 947
| The provision for deferred taxation is made up as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Accelerated capital allowances | (327) | (441)
| Temporary differences trading | 1,274 | 858
| Other | - | 1
|  | 947 | 416
Page 31
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
22. | Pension commitments
Arch UK Biocides Pension Scheme The Company operates a Defined benefit pension scheme. This Plan is closed to new entrants, and no further defined benefits are being earned. Instead, members' future pension benefit is provided within a defined contribution section of the Plan. A full actuarial valuation was carried out as at 31 March 2023, the results of this valuation have been updated to 31 December 2024 by a qualified independent actuary. The Plan is approved by HMRC for tax purposes, and is operated separately from the Group and managed by an independent Corporate Trustee. The Trustee is responsible for payment of benefits and management of the Plan's assets. The Plan is subject to UK regulations, which require the Company and Trustee to agree a funding strategy and contribution schedule for the Plan. The last finalised valuation was undertaken at 31 March 2023. As a result the Company is expected to pay employer contributions of £400,000 pa from 1 July 2021 to 30 June 2026. Information about the risks of the Plan to the Employer The ultimate cost of the Plan to the Employer will depend upon actual future events rather than the assumptions made. Many of the assumptions made are unlikely to be borne out in practice and as such the cost of the Plan may be higher (or lower) than disclosed. In general, the risk to the Employer is that the assumptions underlying the disclosures, or the calculation of contribution requirements are not borne out in practice and the cost to the Employer is higher than expected. This could result in higher contributions required from the Employer and a higher deficit/lower surplus disclosed. More specifically, the assumptions not being borne out in practice could include: ∙The assets being lower than assumed and in particular falls in asset values (particularly equities) not being matched by similar falls in liabilities, resulting in an unaffordable increase in the required Employer contributions; ∙Unanticipated future changes in mortality patterns leading to an increase the Plan's liabilities. Future mortality rates cannot be predicted with certainty. This is especially so bearing in mind that the youngest Plan members could be expected to still be alive in 40 years or more and it is not possible to reliably predict what medical advances may or may not have occurred by this time; ∙The actual number of members exercising options within the Plan, for example taking early retirement or exchanging a portion of pension for a cash lump sum which could alter the long term cost of benefits; and ∙The relatively small number of Plan members is particularly likely to lead to volatility in the funding level and the Employer contributions, as the future demographic experience of such a group is more uncertain than would be the case for a larger group. To help mitigate the risks that the Plan is exposed to, the Plan's Investment strategy includes "matching" assets to broadly reflect the liabilities in respect of pensioner members. Page 32
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 22.Pension commitments (continued)
| Reconciliation of present value of plan liabilities:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| At the beginning of the year | 21,006 | 23,135
| Current service cost | 1 | 51
| Interest cost | 927 | 1,002
| Actuarial (gains)/losses | (4,037) | 1,427
| Benefits paid | (1,738) | (4,609)
| At the end of the year | 16,159 | 21,006
| Reconciliation of present value of plan assets:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| At the beginning of the year | 24,509 | 27,750
| Interest income on plan assets | 1,088 | 1,229
| Contributions by employer | 8 | 252
| Benefits paid | (1,738) | (4,609)
| Return on plan assets | (2,521) | (113)
| At the end of the year | 21,346 | 24,509
| Composition of plan assets:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Equities | - | 4,324
| Corporate bonds | 21,250 | 9,758
| Cash | 96 | 1,196
| Liability driven investment | - | 9,231
| Total plan assets | 21,346 | 24,509
Page 33
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 22.Pension commitments (continued)
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Fair value of plan assets | 21,346 | 24,509
| Present value of plan liabilities | (16,159) | (21,006)
| Net pension scheme asset | 5,187 | 3,503
| The amounts recognised in profit or loss are as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Current service cost | 1 | 51
| Interest cost on defined benefit obligation | 927 | 1,002
| Total | 928 | 1,053
| Actual return on scheme assets | 1,088 | 1,229
|  | 1,088 | 1,229
| There was no investment held by the Plan in the Company or any assets used by the Company. The Company paid £8,000 contributions to the Plan in 2024. The Company expects to contribute £NIL to its Defined benefit pension scheme in 2025.
Page 34
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 22.Pension commitments (continued)
| Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):
|  | 2024 | 2023
|  | % | %
| Discount rate | 5.40 | 4.60
| Future salary increases | 4.00 | 4.00
| Future pension increases in payment | 3.20 | 3.05
| Mortality rates |  |
| - for a male aged 65 now | 20.70 | 23
| - for a female aged 65 now | 22.70 | 25.70
| The salary increase assumption has been taken as 4% pa, which represents the Company's current expectation for the rate of future salary increases over the long term. The assumptions have been derived in a similar way to previous periods and are based on the estimated duration of the Plan's liabilities of 14.428 years (2023: 19 years) and market yields.
Page 35
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
22. | Pension commitments (continued)
| Arch Chemicals Ltd Pension Scheme The Arch Chemicals Ltd Pension scheme was transferred to Arch UK Biocides in December 2018 due to the divestment of Arch Chemicals Ltd. Defined benefit plan The Company operates a final salary defined benefit scheme in the UK. A full actuarial valuation was carried out as at 1 April 2022, the results of this valuation have been updated to 31 December 2024 by a qualified independent actuary. Funding The defined benefit scheme is now closed to future accrual. The company expects to pay £219,600 in funding contributions to the scheme in 2025. Information about the risks of the Plan to the Employer The ultimate cost of the Plan to the Employer will depend upon actual future events rather than the assumptions made. Many of the assumptions made are unlikely to be borne out in practice and as such the cost of the scheme may be higher (or lower) than disclosed. In general, the risk to the Employer is that the assumptions underlying the disclosures, or the calculation of contribution requirements are not borne out in practice and the cost to the Employer is higher than expected. This could result in higher contributions required from the Employer and a higher deficit/lower surplus disclosed. More specifically, the assumptions not being borne out in practice could include: ∙The return of the Scheme's assets being lower than assumed, resulting in an unaffordable increase in the required Employer contribution rate; ∙Falls in asset values not being matched by similar falls in the value of liabilities; ∙Unanticipated future changes in mortality patterns leading to an increase in the Scheme's liabilities. Future mortality rates cannot be predicted with certainty. This is especially so bearing in mind that the youngest Plan members could be expected to still be alive in 60 years or more and it is not possible to reliably predict what medical advances may or may not have occurred by this time; ∙The potential exercise (by members or others) of options against the scheme, for example taking early retirement or exchanging a portion of pension for a cash lump sum; and ∙The relatively small number of scheme members is likely to lead to particular volatility in the funding level and the Employer contributions as the future demographic experience of such a group is more uncertain than would be the case for a larger group.
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Reconciliation of present value of plan liabilities: |  |
| At the beginning of the year | 3,305 | 3,465
| Administration cost | - | 34
| Interest on defined benefit obligation | 147 | 162
| Actuarial gains | (271) | (80)
| Benefits paid (including expenses) | (202) | (276)
| At the end of the year | 2,979 | 3,305
Page 36
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
22. | Pension commitments (continued)
| Reconciliation of present value of plan assets:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| At the beginning of the year | 3,533 | 3,729
| Interest income on Plan assets | 163 | 175
| Return on Plan assets excluding interest income | (408) | (140)
| Contribution by employer | 238 | 45
| Benefits paid (excluding expenses) | (202) | (276)
| At the end of the year | 3,324 | 3,533
| Composition of plan assets:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Corporate/Government Bonds | 2,059 | 2,123
| Cash | 65 | 65
| Annuity policies | 1,200 | 1,345
| Total fair value | 3,324 | 3,533
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Present value of funded defined benefit obligations | (2,979) | (3,305)
| Fair value of scheme assets | 3,324 | 3,533
| Adjustment for asset ceiling | (345) | (228)
| Net pension scheme asset | - | -
Page 37
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
22. | Pension commitments (continued)
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
| Components of defined benefit costs in other comprehensive income |  |
| Actuarial loss on defined benefit obligation | (271) | (80)
| Actuarial return on Plan assets | 408 | 140
| Change in effect of asset ceiling | 101 | (49)
| Defined benefit charge in other comprehensive income | 238 | 11
| There was no investment held by the Plan in the Company or any assets used by the Company. The Company paid £8,000 contributions to the Plan in 2024. The assumptions have been derived in a similar way to previous periods and are based on the estimated duration of the Plan's liabilities of 9.892 years (2023: 11 years) and market yields.
Page 38
ARCH UK BIOCIDES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
23. | Share capital
|  |  |  |  | 2024 | 2023
|  |  |  |  | £000 | £000
|  | Allotted, called up and fully paid |  |
|  | 1,644,236 (2023 - 1,644,236) Ordinary shares of £1 each | 1,644 | 1,644
| The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company.
24. | Controlling party
The company is an immediate subsidiary undertaking of Arch Chemicals UK Holdings Limited which is registered in United Kingdom. Copies of this financial statements are available from Hexagon Tower Crumpsall Vale, Blackley, Manchester, M9 8GQ. The smallest and largest group to consolidate the company's financial statements is Herens Midco S.à.r.l. Copies of Herens Midco S.à.r.l.'s consolidated financial statements can be obtained from 4, rue Albert Borschette, Luxembourg, L-1246, Luxembourg. At the reporting date, the ultimate parent undertakings are Bain Capital Private Equity LP and Cinven Capital Management Limited, which are both incorporated in Luxembourg and have their principal office in Luxembourg.
Page 39