Fine Organics Limited - Limited company accounts 20.1
Fine Organics Limited - Limited company accounts 20.1
| REGISTERED NUMBER: |
| Strategic Report, Report of the Directors and |
| Financial Statements for the Year Ended 31 December 2020 |
| for |
| Fine Organics Limited |
| Fine Organics Limited (Registered number: 01532065) |
| Contents of the Financial Statements |
| for the Year Ended 31 December 2020 |
| Page |
| Company Information | 1 |
| Strategic Report | 2 |
| Report of the Directors | 6 |
| Statement of Directors' Responsibilities | 10 |
| Report of the Independent Auditors | 11 |
| Statement of Comprehensive Income | 15 |
| Balance Sheet | 16 |
| Statement of Changes in Equity | 17 |
| Notes to the Financial Statements | 18 |
| Fine Organics Limited |
| Company Information |
| for the Year Ended 31 December 2020 |
| DIRECTORS: |
| REGISTERED OFFICE: |
| REGISTERED NUMBER: |
| AUDITORS: |
| Chartered Certified Accountants |
| and Statutory Auditors |
| 9 St Clare Street |
| London |
| EC3N 1LQ |
| Fine Organics Limited (Registered number: 01532065) |
| Strategic Report |
| for the Year Ended 31 December 2020 |
| The directors present their strategic report for the year ended 31 December 2020. |
| REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS |
| During the year ended 31 December 2020 the business has grown its revenue by 28% to £55,809K (2019: £43,739K) following the commencement in production of a significant new product. Despite this growth in revenue, the Company has made a loss of £2,595K (2019: profit of £1,640K) in terms of EBITDA (earnings before interest, tax, depreciation and amortisation), the measure used by the Board of directors and investors to track financial performance. Losses in the year have been driven by the need to increase the Company's overhead base in preparation for the expansion to our manufacturing facilities. Due to delays in construction activities caused by COVID-19, the revenues anticipated to offset the increased cost base have also been protracted into 2021. |
| The Company's loss before taxation for the financial year is £7,124K (2019: £3,137K). |
| Whilst the Company has been successful in progressing it's operations and expansion activities during the COVID-19 outbreak, there have been some extensions to the timescales for completion of the project. Although the Company has utilised this period of time to undertake process optimisation opportunities and maximise volumes with the existing equipment available, the volumes anticipated for manufacture have not been reached in the 2020 financial year. It is expected that the expansion project will complete in quarter three of 2021, with increases to production capacity from quarter two. |
| The business still has a stable and expanding customer base with which it works technically to implement innovative chemistry solutions in order to drive process efficiencies and optimal performance from its manufacturing assets. |
| Following an extensive review of the strategic positioning of all sites within the group, the investors are satisfied with the direction and on-going investment of the business. The company is well placed to take advantage of any upturn in the Agrochemical markets, as well as expansion across all other market sectors served. |
| The financial position of the company as at the year-end is net assets of £9,291K (2019: £16,443K). |
| PRINCIPAL RISKS AND UNCERTAINTIES |
| The management of the business and the execution of the company's strategy are subject to a number of risks. The main risks and uncertainties are as follows: |
| - Pricing: competition in the company's portfolio is based primarily on price, with additional weighting being placed on product quality, reliability of supply and customer service. |
| - Raw material and energy prices: these are significant costs to the business. Mitigation of this exposure is actioned by wherever practicable procuring on a global basis. |
| - Utilisations of assets: the Company's results are materially influenced by the degree to which assets are utilised in order to achieve maximum production volumes. |
| - COVID-19: at the outbreak of the COVID-19 pandemic, the business received special dispensation to continue operations as a Site Critical for National Infrastructure and as such we have managed to ensure stable operations and minimise disruption by implementation of strict social distancing measures. |
| - Brexit: the business has acknowledged supply chain risks surrounding movement of materials in a 'no-deal' Brexit scenario. As such the business has worked with customers and key suppliers to ensure sufficient safety stocks of material are held for business continuity. The company maintains a 'Brexit committee' for on-going assessment of business risk. |
| Fine Organics Limited (Registered number: 01532065) |
| Strategic Report |
| for the Year Ended 31 December 2020 |
| SECTION 172(1) STATEMENT |
| The Companies (Miscellaneous Reporting) Regulations 2018 ('2018 MRR') require directors to explain how they considered the interests of key stakeholders and the broader matters set out in section 172(1) (A) to (F) of the Companies Act 2006 ('S172') when performing their duty to promote the success of the Company under S172. This includes considering the interest of other stakeholders which will have an impact on the long-term success of the company. The board welcomes the direction of the UK Financial Reporting Council (the 'FRC'). This S172 statement, which is reported for the first time, explains how the directors: |
| - have engaged with employees, suppliers, customers and others; and |
| - have had regard to employee interests, the need to foster the company's business relationships with suppliers, customers and other, and the effect of that regards, including on the principal decisions taken by the company during the financial year. |
| The S172 statement focuses on matters of strategic importance, and the level of information disclosed is consistent with the size and the complexity of the business. |
| When making decisions, each Director ensures that he/she acts in the way he/she considers, in good faith, would most likely promote the Company's success for the benefit of its members as a whole, and in doing so have regard (among other matters) to: |
| S172(1) (A) "The likely consequences of any decision in the long term" |
| The company's operations, including its sales, manufacturing and investment plans for the year, are set out through the annual budget. This is prepared by the company's senior leadership team and approved by the board of the ultimate parent company and is aligned with the long-term plans for the Site within the context of the overall group strategy. |
| In addition to reporting on the financials through the monthly management accounts, the board of directors is kept informed of operational matters through monthly reports compiled by the senior leadership team. This report includes, but is not limited to, manufacturing performance, safety statistics and quality metrics. |
| The board takes a view on long-term decisions based on commercial enquiries, research and development activities and thereafter the appropriate financial and analytical modelling, which it receives in the form of detailed proposals presented by the senior leadership team to the board and subsequently to the ultimate parent company. This could include, but not be limited to, new product development, acquisition opportunities and strategic partnerships. |
| S172(1) (B) "The interests of the company's employees" |
| The directors recognise that the company's employees are fundamental and core to our business and delivery of our strategic ambitions. The success of our business depends on attracting, retaining and motivating employees. From ensuring that we remain a responsible employer, from pay and benefits to our health, safety and workplace environment, the directors factor the implications of decisions on employees and the wider workforce, where relevant and feasible. |
| The board of directors' support significant levels of investment in training, online learning, paid-for external development, and the hosting of internal learning events. This sits alongside a generous benefits package which includes pension contributions above the statutory minimum requirement and an annual bonus scheme. |
| The board of directors recognises the importance of having a diverse workforce that both reflects the company's global supply chain network, and which strengthens its business growth. The business is committed to promoting fairness and equality in the workplace which it demonstrates through a number of policies, including: Equal Opportunities Policy; Flexible Working Policy; Parental Leave Policy; and Maternity, Paternity and Adoption Policies. |
| S172(1) (C) "The need to foster the company's business relationships with suppliers, customers and others" |
| Delivering our strategy requires strong mutually beneficial relationships with suppliers, customers, local and national government, regulators and other associated stakeholders. |
| Fine Organics Limited (Registered number: 01532065) |
| Strategic Report |
| for the Year Ended 31 December 2020 |
| Moreover, the directors receive information updates on a variety of topics that indicate and inform how these stakeholders have been engaged. These range from information provided from the supply chain function (on suppliers related to items such as sourcing project updates and supplier contract management topics) to information provided by the commercial and development teams (on customers related to items such as business strategies, on-going manufacturing campaigns and investment or divestment proposals). |
| In its relationship with suppliers, the company strives to maintain a reputation for fairness and high standards through striving for contracts that provide mutual benefit, and ensuring that suppliers are paid on time. |
| The company has a zero-tolerance to human trafficking and slavery and expects its suppliers to take the same approach. The board of directors has approved the publication of the company's Modern Slavery Act statement and will support the senior leadership team in its review of its policies and procedures to ensure continued compliance. |
| In its relationship with customers, feedback can be collated by the several teams and fed back to the directors, mainly by the Commercial Directors, whose primary focus is customer engagement, management and communication. Specifically, with regard to contract manufacturing agreements, our customers have a direct contribution toward the supply chain, technical development and quality parameters of our finished products, integration of customer feedback is a key input for site operations. |
| S172(1) (D) "The impact of the company's operations on the community and the environment" |
| The directors recognise that the business has a significant responsibility when it comes to its relationship with the environment. The site is Top-Tier COMAH (Seveso III) compliant, has a broad environmental permit and similarly has extensive consents in place to allow us to handle a broad range of substances at a range of scales. A key consideration for the business in this respect is with regards to its chemical substance waste management. The site has direct pipeline access to one of the largest municipal liquid aqueous waste disposal facilities in Europe, and works closely with its sister company Fine Environmental Services Limited, who operate one of only three, third party licensed, high temperature thermal oxidisers for incineration of other waste streams. The business continues to work with its regulators in maintaining compliance and striving for best practice where environmental impact is concerned. |
| S172(1) (E) "The desirability of the company maintaining a reputation for high standards of business conduct" |
| The directors recognise that the business operates within an industry where a high degree of emphasis is placed on ensuring business decisions are economically, environmentally and socially responsible. The company periodically reviews its policies and principles, as set out in the company Staff Handbook and other guiding documentation, to ensure that these high standards are maintained. This, complemented by the ways the board is informed and monitors compliance with relevant governance standards help assure its decisions are taken and that the company acts in a way that promotes high standards of business conduct. |
| S172(1) (F) "The need to act fairly as between members of the company" |
| The directors consider which course of action best enables delivery of our strategy through the long-term, taking into consideration the impact on stakeholders. In doing so, our directors act fairly as between the Company's members but are not required to balance the Company's interest with those of other stakeholders, and this can sometimes mean that certain stakeholder interests may not be fully aligned. |
| Fine Organics Limited (Registered number: 01532065) |
| Strategic Report |
| for the Year Ended 31 December 2020 |
| KEY PERFORMANCE INDICATORS |
| The key performance indicators of the company were as follows: |
| 31 December 2020 | 31 December 2019 | Change |
| £'000 | £'000 |
| Turnover | 55,809 | 43,739 | 28%+ |
| Gross profit | 2,979 | 3,218 | 7%- |
| Operating profit / (loss) | (7,152) | (2,618) | 173%- |
| Lost time injury rate (based on 1m man hours) | 1.69 | 2.54 |
| In conjunction with the management of costs and working capital to improve profit, the company uses a number of KPIs to monitor performance. These KPIs are monitored both on a product-by-product basis and also for the Company as a whole, compared to budget. |
| ON BEHALF OF THE BOARD: |
| 7 May 2021 |
| Fine Organics Limited (Registered number: 01532065) |
| Report of the Directors |
| for the Year Ended 31 December 2020 |
| The directors present their report with the financial statements of the company for the year ended 31 December 2020. |
| PRINCIPAL ACTIVITY |
| The principal activity of the company in the year under review was that of a manufacturer of fine chemicals, supplying the pharmaceutical, agrochemical and speciality chemical industry. The Company's manufacturing plant is in the UK and has customers in Europe, North America, South America, and the UK. |
| DIVIDENDS |
| No dividends will be distributed for the year ended 31 December 2020. |
| RESEARCH AND DEVELOPMENT |
| The company's research and development activities are focused on the safe implementation of new products coupled with improving plant efficiency, optimisation of plant productivity, reducing waste and improving environmental performance, satisfying both our customers and all stakeholders. |
| DIRECTORS |
| The directors shown below have held office during the whole of the period from 1 January 2020 to the date of this report. |
| Other changes in directors holding office are as follows: |
| CHARITABLE DONATIONS AND EXPENDITURE |
| The total amount of charitable donations made in the United Kingdom by the company during the financial year was £250 (2019: £4,379). |
| FINANCIAL RISK MANAGEMENT |
| The company's operations expose it to a variety of financial risks that include the effects of changes in price risk, credit risk and liquidity risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company where appropriate. |
| Price risk |
| The Company is exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. The company has no exposure to equity securities price risk as it holds no listed or other equity investments. |
| Credit risk |
| The Company has implemented policies that require appropriate credit checks on potential customers before sales are made. Where debt finance is utilised, this is subject to pre-approval by the board of directors. |
| Liquidity risk |
| The Company actively manages its risk profile on a regular basis to ensure the company has sufficient available funds for operations and planned expansions. |
| Cashflow risk |
| The business actively manages it's cash flow with the assistance of the group's treasury department, seeking to effectively manage working capital and minimise exposure to foreign exchange movements. |
| Fine Organics Limited (Registered number: 01532065) |
| Report of the Directors |
| for the Year Ended 31 December 2020 |
| ENGAGEMENT WITH EMPLOYEES |
| Disabled Employees |
| The group is committed to employment policies, where following best practice, based on equal opportunities for all employees, irrespective of sex, race, colour, disability or marital status. The group gives full and fair consideration to applications for employment for disabled persons, having regard to their particular aptitudes and abilities. Appropriate arrangements are made for the continued employment and training, career development and promotion of disabled persons employed by the group. If members of staff become disabled the group continues employment, either in the same or an alternative position, with appropriate retraining being given where necessary. |
| Employee Involvement |
| The group systematically provides employees with information on matters of concern to them, consulting them or their representatives regularly, so that their views can be taken into account when making decisions that are likely to affect their interests. Employee involvement in the group is encouraged, as achieving a common awareness on the part of all employees of the financial and economic factors affecting the group plays a major part in maintaining its effective management. |
| STREAMLINED ENERGY AND CARBON REPORTING |
| Introduction |
| Our environmental performance information is presented in accordance with the Streamlined Energy and Carbon Reporting ("SECR") Guidance (March 2019), as specified under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013. Data is presented for our financial year, from 1 January through to 31 December, and includes information on our most significant environmental aspects: energy consumption and associated greenhouse gas ("GHG") emissions; and waste generation. |
| We are actively seeking ways to reduce our impact on the environment and build resilience to climate change by focusing on energy, waste and water. These three focus areas have been identified based on an overall evaluation of environmental impacts and risks, with a focus on impacts that we can influence. |
| The company presents its energy usage as below: |
| Our greenhouse gas emissions |
| Year ended 31 December 2020 |
Year ended 31 December 2019 |
| kWh | TCO2e | kWh | TCO2e |
| Total Site Electricity Imported | 2,428,702 | 621 | 2,268,232 | 580 |
| Total Site Electricity Generated by CHP (minus export) | 337,421,403 | 86,245 | 292,732,408 | 74,882 |
| Total Site Gas | 127,593,817 | 26,065 | 124,510,006 | 25,435 |
| Total Site Consumable Fuels | 108,647 | 27,903 | 50,483 | 13,054 |
| Total Site Energy | 467,552,596 | 140,834 | 419,561,489 | 113,892 |
| Intensity Ratio |
| Total Reactor Hours Occupied | 491,736 | 552,850 |
| Carbon Intensity (kWh/Site) | 951 | 0.286 | 802 | 0.218 |
| SECR Methodology |
| Below is a brief outline of the methodology used by the Directors to produce the figures and identified opportunities for the Company. |
| Data Collection |
| Utility data has been collected from energy suppliers in the form of HH data and NHH consumption summary reports and invoices. Data on other fuels have been collected from automatic metering. |
| Fine Organics Limited (Registered number: 01532065) |
| Report of the Directors |
| for the Year Ended 31 December 2020 |
| Carbon Conversion |
| To perform the carbon conversion, we utilised the Government conversion factors for company reporting of greenhouse gas emissions. To report the greenhouse gas emissions associated with an organisation's activities, the carbon emissions need to be converted into 'activity data' such as: |
| - distance travelled |
| - litres of fuel used |
| - tonnes of waste disposed |
| The conversion factor spreadsheets provide the values to be used for such conversions, and step by step guidance on how to use them. |
| A new set of conversion factors are published each year, together with a methodology paper explaining how the conversion factors are derived, and a paper explaining the major changes in the latest year's factors. All of which can be found in the link below: |
| https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting |
| Energy Intensity |
| The energy intensity metric utilised for the Company is the total reactor hours occupied per kWh. |
| Identified Opportunities |
| The Directors are committed to reducing greenhouse gas emissions and monitor opportunities for energy savings where possible. The following opportunities have been identified: |
| Energy Conservation Measures | Energy Saving | Carbon Saving |
| mWh / year | TCO2e / year |
| Energy Management System inc. metering and analytics | 1,390 | 244 |
| Motors & Drives - VSD Installation | 3,123 | 1,546 |
| Motors & Drives - High Efficiency Motors | 714 | 353 |
| Motors & Drives - Laser Alignment | 39 | 19 |
| Compressed Air - Leak Repair Programme | 437 | 216 |
| Compressed Air - Installation of VSD Compressor | 882 | 436 |
| Compressed Air - Reduction in Air Pressure | 61 | 30 |
| Steam - Recover Heat from Blowdown | 1,015 | 185 |
| Steam - Condensing Economiser | 3,003 | 547 |
| Steam - Replace Steam Traps | 5,780 | 1,052 |
| Steam - Burner Controls | 1,162 | 211 |
| Total Energy Efficiency Opportunities | 17,605 | 4,841 |
| STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
| So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
| Fine Organics Limited (Registered number: 01532065) |
| Report of the Directors |
| for the Year Ended 31 December 2020 |
| AUDITORS |
| The auditors, Shinewing Wilson Accountancy Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
| ON BEHALF OF THE BOARD: |
| Fine Organics Limited (Registered number: 01532065) |
| Statement of Directors' Responsibilities |
| for the Year Ended 31 December 2020 |
| The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
| Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
| - | select suitable accounting policies and then apply them consistently; |
| - | make judgements and accounting estimates that are reasonable and prudent; |
| - | state whether applicable 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 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. |
| Report of the Independent Auditors to the Members of |
| Fine Organics Limited |
| Opinion |
| We have audited the financial statements of Fine Organics Limited (the 'company') for the year ended 31 December 2020 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 2020 and of its loss for the year then ended; |
| - | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
| - | have been prepared in accordance with the requirements of the Companies Act 2006. |
| Basis for opinion |
| We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
| Material uncertainty related to going concern |
| We draw your attention to note 2 in the financial statements, which indicates that the Company incurred a loss before tax of £7,124K during the year, and had a net current liability of £42,133K at the year ended 31 December 2020 due to a loan of £61,085K from its UK parent company as a financial support. The Company fully depends on its UK parent and its ultimate parent's support. As stated in note 2, these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. |
| 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. |
| Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
| Because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Company's ability to continue as a going concern. For example, the terms on which the United Kingdom withdraw from European Union and current Covid 19 situation, are not clear. It is difficult to evaluate all of the potential impacts on the Company's trade. |
| Other information |
| The directors are responsible for the other information. The other information comprises the information in the Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors thereon. |
| Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
| In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
| Report of the Independent Auditors to the Members of |
| Fine Organics Limited |
| Opinions on other matters prescribed by the Companies Act 2006 |
| In our opinion, based on the work undertaken in the course of the audit: |
| - | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
| - | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
| Matters on which we are required to report by exception |
| In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
| We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
| - | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
| - | the financial statements are not in agreement with the accounting records and returns; or |
| - | certain disclosures of directors' remuneration specified by law are not made; or |
| - | we have not received all the information and explanations we require for our audit. |
| Responsibilities of directors |
| As explained more fully in the Statement of Directors' Responsibilities set out on page ten, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
| In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
| Report of the Independent Auditors to the Members of |
| Fine Organics Limited |
| Auditors' responsibilities for the audit of the financial statements |
| Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
| 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 entity. |
| The following laws and regulations were identified as being of significance to the entity: |
| - 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, and distributable profits legislation. |
| - It is considered that there are ISO9001, Good Manufacturing Practice and health and safety for which non-compliance may be fundamental to the operating aspects of the business. |
| Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; 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 entity'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 for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
| Report of the Independent Auditors to the Members of |
| Fine Organics Limited |
| Use of our report |
| This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
| for and on behalf of |
| Chartered Certified Accountants |
| and Statutory Auditors |
| 9 St Clare Street |
| London |
| EC3N 1LQ |
| Fine Organics Limited (Registered number: 01532065) |
| Statement of Comprehensive Income |
| for the Year Ended 31 December 2020 |
| 31.12.20 | 31.12.19 |
| Notes | £'000 | £'000 | £'000 | £'000 |
| TURNOVER | 4 |
| Cost of sales |
| GROSS PROFIT |
| Distribution costs |
| Administrative expenses |
| 10,099 | 5,936 |
| (7,120 | ) | (2,718 | ) |
| Other operating income | 5 |
| OPERATING LOSS | ( |
) | ( |
) |
| Exceptional items | 7 |
| (6,914 | ) | (2,994 | ) |
| Interest receivable and similar income | 8 |
| (6,914 | ) | (2,985 | ) |
| Interest payable and similar expenses | 9 |
| LOSS BEFORE TAXATION | 10 | ( |
) | ( |
) |
| Tax on loss | 11 |
| LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
| OTHER COMPREHENSIVE INCOME | - | - |
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
( |
) |
| Fine Organics Limited (Registered number: 01532065) |
| Balance Sheet |
| 31 December 2020 |
| 31.12.20 | 31.12.19 |
| Notes | £'000 | £'000 | £'000 | £'000 |
| FIXED ASSETS |
| Owned |
| Tangible assets | 12 | 19,457 | 20,089 |
| Right-of-use |
| Tangible assets | 12, 19 | 190 | 406 |
| Investments | 13 |
| CURRENT ASSETS |
| Stocks | 14 |
| Debtors | 15 |
| Cash at bank |
| CREDITORS |
| Amounts falling due within one year | 16 |
| NET CURRENT LIABILITIES | ( |
) | ( |
) |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
| CREDITORS |
| Amounts falling due after more than one year | 17 |
| NET ASSETS |
| CAPITAL AND RESERVES |
| Called up share capital | 20 |
| Share premium |
| Capital redemption reserve |
| Other reserves - IFRS16 | ( |
) | ( |
) |
| Retained earnings |
| SHAREHOLDERS' FUNDS |
| The financial statements were approved by the Board of Directors and authorised for issue on |
| Fine Organics Limited (Registered number: 01532065) |
| Statement of Changes in Equity |
| for the Year Ended 31 December 2020 |
| Called up |
| share | Retained | Share |
| capital | earnings | premium |
| £'000 | £'000 | £'000 |
| Balance at 1 January 2019 |
| Changes in equity |
| Total comprehensive income | - | ( |
) | - |
| Balance at 31 December 2019 | 16,395 |
| Changes in equity |
| Total comprehensive income | - | ( |
) | - |
| Balance at 31 December 2020 |
| Capital | Other |
| redemption | reserves | Total |
| reserve | - IFRS16 | equity |
| £'000 | £'000 | £'000 |
| Balance at 1 January 2019 | ( |
) |
| Changes in equity |
| Total comprehensive income | ( |
) |
| Balance at 31 December 2019 | ( |
) |
| Changes in equity |
| Total comprehensive income | - | - | ( |
) |
| Balance at 31 December 2020 | ( |
) |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements |
| for the Year Ended 31 December 2020 |
| 1. | STATUTORY INFORMATION |
| Fine Organics Limited (the "Company") is a private company incorporated, domiciled and registered in England and Wales, registration number 1532065, the registered address is Seal Sands, Middlesbrough, Cleveland TS2 1UB. |
| The presentation currency of the financial statements is the Sterling. All amounts in the financial statements and notes have been rounded off to the nearest thousand Sterling Pound, unless otherwise stated. |
| 2. | ACCOUNTING POLICIES |
| Basis of preparation |
| The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework": |
| • | the requirements of IFRS 7 Financial Instruments: Disclosures; |
| • | the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement; |
| • | the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases; |
| the requirements of paragraph 58 of IFRS 16; |
| • | the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of: |
| - | paragraph 79(a)(iv) of IAS 1; and |
| - | paragraph 73(e) of IAS 16 Property, Plant and Equipment; |
| • | the requirements of paragraphs 10(d), 10)(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation of Financial Statements; |
| • | the requirements of paragraphs 134 to 136 of IAS 1 Presentation of Financial Statements; |
| • | the requirements of IAS 7 Statement of Cash Flows; |
| • | the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors; |
| • | the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures; |
| • | the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group; |
| • | the requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairments of Assets. |
| Going concern |
| The Company incurred a loss before tax of £7,124K during the year, and had a net current liability of £42,133K at the year ended 31 December 2020 due to a loan of £61,085K from its UK parent company. The ultimate parent company has confirmed to financially support the whole UK group for at least 12 months from the date of signing these financial statements. Based on this, the directors have concluded that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements. |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 2. | ACCOUNTING POLICIES - continued |
| Turnover |
| The Company adopted IFRS 15 "Revenue from contracts with customers" in 2018. IFRS 15 establishes the principles that an entity applies when reporting information about the nature, amount, timing and uncertainty of revenue and cash flows from a contract with a customer. |
| To recognise revenue under IFRS 15, the Company applies the following five steps: |
| - identify the contract(s) with a customer. |
| - identify the performance obligations in the contract. |
| - determine the transaction price, which is normally agreed in advance. |
| - allocate the transaction price to each performance obligation on the basis of each stage of product processing, which is promised in the contract. |
| - recognise revenue when a performance obligation is satisfied. A performance obligation is satisfied at the point when a quality control of the product is proved and invoice is subsequently issued. |
| Tangible fixed assets |
| Tangible fixed assets are stated at historic purchase cost less accumulated depreciation. The cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is calculated so as to write off the cost of a fixed asset on a straight line basis over its estimated useful economic life, taking into account any contractual relationships, using the following rates: |
| Freehold land - not depreciated |
| Freehold building - maximum of 25 years |
| Plant and machinery - maximum 10 years |
| Construction in progress - not depreciated until completion and fully in use |
| Financial instruments |
| Financial assets at amortised cost |
| The company’s financial assets measured at amortised cost comprise trade and other debtors and cash and cash equivalents in the balance sheet. Cash and cash equivalents includes cash in hand, deposits held at call with banks. |
| Financial liabilities |
| The company does not have any liabilities held for trading nor does it voluntarily classify any financial liabilities as being at fair value through profit or loss. |
| Trade creditors and other short-term monetary liabilities, which are initially recognised at fair value and are subsequently carried at amortised cost using the effective interest method. |
| Offsetting financial instruments |
| Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. |
| Share capital |
| Financial instruments issued by the company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. |
| The company's ordinary shares are classified as equity instruments. |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 2. | ACCOUNTING POLICIES - continued |
| Stocks |
| Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
| Cost includes all direct expenditure and an appropriate proportion of fixed and variable overheads. |
| Taxation |
| Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the balance sheet date. |
| Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. An asset is not recognised to the extent that the transfer of economic benefits in the future is uncertain. Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences are expected to reverse based on tax rates and laws that have been substantially enacted by the balance sheet date. Deferred tax assets and liabilities which have been recognised have not been discounted. |
| Research and development |
| Expenditure on research and development is written off in the year in which it is incurred. |
| Foreign currencies |
| Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
| Government grants |
| Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received. |
| Government grants relating to turnover are recognised as income over the periods when the related costs are |
| incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount. |
| Coronavirus Job Retention Scheme (CJRS) |
| The CJRS grant relates to staff who have been furloughed due to Covid-19. As a receipt of a government grant, the JRS payments are recognised as other operating income in the Income Statements to which the underlying furloughed staff costs relate to and the employment costs are recognised at the full cost of payments made to or in respect of the employees. The JRS payments are recognised on an accruals basis. |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 2. | ACCOUNTING POLICIES - continued |
| Leases |
| Leases are recognised as finance leases. The lease liability is initially recognised at the present value of the lease payments which have not yet been made and subsequently measured under the amortised cost method. The initial cost of the right-of-use asset comprises the amount of the initial measurement of the lease liability, lease payments made prior to the lease commencement date, initial direct costs and the estimated costs of removing or dismantling the underlying asset per the conditions of the contract. |
| Where ownership of the right-of-use asset transfers to the lessee at the end of the lease term, the right-of-use asset is depreciated over the asset’s remaining useful life. If ownership of the right-of-use asset does not transfer to the lessee at the end of the lease term, depreciation is charged over the shorter of the useful life of the right-of-use asset and the lease term. |
| The company leases various equipment and vehicles. Rental contracts are typically made for fixed periods of 3 to 5 years. If the contracts contain both lease and non-lease components, the Company allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. |
| At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. |
| 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. |
| 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 interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's weighted average incremental borrowing rate. The lease term comprises the non-cancellable period of the contract, together with periods covered by an option to extend the lease where the Company is reasonably certain to exercise that option. The lease liability is measured by increasing the carrying amount to reflect interest on the lease liability, and reducing it by the lease payments made. The lease liability is remeasured when the Company changes its assessment of whether it will exercise an extension or termination option. |
| The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. |
| The Company presents right-of-use assets separately as 'Lease right of use assets' and lease liabilities as 'Trade and other payables' in the statement of financial position. |
| Employee benefit costs |
| The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate. |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
| The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of the accounting policies and reported amounts of assets and liabilities, revenue and expenses. Actual results may differ from these estimates. |
| Estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are reasonable under the circumstances. Revisions to accounting estimates are recognised in the year in which the estimates are revised and in any future years affected. |
| a. Useful economic lives of property, plant and equipment |
| The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values 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. |
| b. Carrying value of the stock |
| Provisions for slowing moving, defective or obsolete stock are made based on future expectations for sale or use of the stock. |
| c. Lease accounting |
| The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. To determine the incremental borrowing rate, the Company applied the borrowing rates of 3% to all its leases. |
| 4. | TURNOVER |
| The turnover and loss before taxation are attributable to the one principal activity of the company. |
| An analysis of turnover by geographical market is given below: |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| United Kingdom |
| Europe |
| United States of America |
| South America |
| Asia |
| 5. | OTHER OPERATING INCOME |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Coronavirus Job Retention Sche | 106 | - |
| Government grants |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 6. | EMPLOYEES AND DIRECTORS |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Wages and salaries | 9,511 | 7,618 |
| Social security costs |
| Other pension costs |
| The average number of employees during the year was as follows: |
| 31.12.20 | 31.12.19 |
| Operations | 251 | 202 |
| Administration | 26 | 19 |
| Research and development | 1 | 1 |
| 31.12.20 | 31.12.19 |
| £ | £ |
| Directors' remuneration | 283,423 | 165,000 |
| Directors' pension contributions to money purchase schemes | 46,219 | 28,000 |
| The number of directors to whom retirement benefits |
| were accruing was as follows: |
| Money purchase schemes | 2 | 1 |
| 7. | EXCEPTIONAL ITEMS |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Exceptional items | ( |
) |
| 8. | INTEREST RECEIVABLE AND SIMILAR INCOME |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Deposit account interest |
| 9. | INTEREST PAYABLE AND SIMILAR EXPENSES |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Bank interest |
| Leasing |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 10. | LOSS BEFORE TAXATION |
| The loss before taxation is stated after charging/(crediting): |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Cost of inventories recognised as expense |
| Leases | - | 27 |
| Depreciation - owned assets |
| Depreciation - assets on hire purchase contracts or finance leases |
| Auditors' remuneration |
| Auditors' remuneration for non audit work |
| Foreign exchange differences | ( |
) |
| 11. | TAXATION |
| Analysis of tax expense |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Current tax: |
| Tax |
| Deferred tax |
| Total tax expense in statement of comprehensive income |
| Factors affecting the tax expense |
| The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Loss before income tax | ( |
) | ( |
) |
| Loss multiplied by the standard rate of corporation tax in the UK of (2019 - |
(1,354 |
) |
(596 |
) |
| Effects of: |
| Expenses not deductible for tax purposes | 19 | 76 |
| Group relief not paid for | - | 160 |
| Adjustments from previous years | - | (22 | ) |
| Tax rate changes | 34 | (168 | ) |
| Tax on R+D expenditure credit | 28 | - |
| Deferred tax assets not recognised | 1,301 | 1,979 |
| Tax expense |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 11. | TAXATION - continued |
| The Company has an unrecognised deferred tax asset as at 31 December 2020 of £1,301K (2019: £1,979K). This has not been recognised in the financial statements due to uncertainty over the future income streams required from the potential asset to be recovered. |
| The rate of corporation tax throughout the year was 19%. The current government announced in the recent Budget that a increase to 25% would be effected on 1 April 2023.Therefore, deferred taxes at the balance sheet date have been measured using the most recent enacted tax rate at 19% and reflected in these financial statements. |
| 12. | TANGIBLE FIXED ASSETS |
| Freehold | Short | Plant and |
| property | leasehold | machinery | Totals |
| £'000 | £'000 | £'000 | £'000 |
| COST |
| At 1 January 2020 |
| Additions |
| Reclassification/transfer | ( |
) | ( |
) |
| At 31 December 2020 |
| DEPRECIATION |
| At 1 January 2020 |
| Charge for year |
| Eliminated on disposal | ( |
) | ( |
) |
| At 31 December 2020 |
| NET BOOK VALUE |
| At 31 December 2020 |
| At 31 December 2019 |
| Freehold land and buildings at Seal Sands, Middlesbrough with book value of £844K were charged in favor of HSBC. |
| 13. | INVESTMENTS |
| The investments represent construction work in progress, are not depreciated until complete and in use. |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| CIP b/f | 19,572 | - |
| CIP additions | 47,046 | 441 |
| Reclassification | - | 19,131 |
| 66,618 | 19,572 |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 14. | STOCKS |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Raw materials |
| Work-in-progress |
| Finished goods |
| 15. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Trade debtors |
| Amounts owed by group undertakings |
| Other debtors | 3,278 | 2,171 |
| Tax RDEC | 223 | 412 |
| Prepayments and accrued income |
| Included in the amounts owed by group undertakings is an amount of £5,415K due from its fellow subsidiary Fine Environmental Services Ltd (2019: due to £5,197K), and the amounts owned to group undertakings were unsecured, interest free and have no fixed repayment date. |
| 16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Other loans (see note 18) |
| Leases (see note 18) |
| Trade creditors |
| Amounts owed to group undertakings |
| Social security and other taxes |
| Accruals and deferred income |
| Included in the amounts owed to group undertakings is an amount of £71,216K (2019: £41,170K), which were unsecured, interest free and have no fixed repayment date. At the balance sheet date, an amount of £2,432K (2019: 438K), £61,085K (2019: £32,922K) and £7,699K (2019: £7,810K) were due to its ultimate parent company Lianhe Chemical Technology Co. Ltd, intermediate parent company Lianhetech Holdco Ltd and immediate parent company Lianhetech Europe Ltd, respectively. |
| Other loans represent the Company's revolving credit facility. |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 17. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Leases (see note 18) |
| Accruals and deferred income | 34,730 | 20,429 |
| Included in accruals and deferred income is an amounts of £34,730K (2019: £20,429K) deferred income carrying values of the trade and other payables are equal to their fair value at the end of the reporting period. The Directors have decided to present this amount without discount to reflect the time value of money, in order to reflect the substance of the financing and to show a true and fair view. |
| 18. | FINANCIAL LIABILITIES - BORROWINGS |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Current: |
| Revolving credit facility | 1,000 | 1,000 |
| Leases (see note 19) | 161 | 255 |
| Non-current: |
| Leases (see note 19) | 111 | 299 |
| Terms and debt repayment schedule |
| 1 year or |
| less | 1-2 years | 2-5 years | Totals |
| £'000 | £'000 | £'000 | £'000 |
| Revolving credit facility | 1,000 | - | - | 1,000 |
| Leases | 161 | 48 | 63 | 272 |
| 48 | 63 | 1,272 |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 19. | LEASING |
| Right-of-use assets |
| Tangible fixed assets |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| COST |
| At 1 January 2020 | 660 | 412 |
| Additions | - | 248 |
| 660 | 660 |
| DEPRECIATION |
| At 1 January 2020 | 254 | - |
| Charge for year | 216 | 254 |
| 470 | 254 |
| NET BOOK VALUE | 190 | 406 |
| Other leases |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Short-term leases | - | 27 |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 19. | LEASING - continued |
| Lease liabilities |
| Minimum lease payments fall due as follows: |
| 31.12.20 | 31.12.19 |
| £'000 | £'000 |
| Gross obligations repayable: |
| Within one year | 161 | 255 |
| Between one and five years | 111 | 299 |
| 272 | 554 |
| Finance charges repayable: |
| Net obligations repayable: |
| Within one year | 161 | 255 |
| Between one and five years | 111 | 299 |
| 272 | 554 |
| Future finance charges associated with lease liabilities charges at 3% per annum are applied to the liabilities (note 3(c)). |
| 20. | CALLED UP SHARE CAPITAL |
| Allotted, issued and fully paid: |
| Number: | Class: | Nominal | 31.12.20 | 31.12.19 |
| value: | £'000 | £'000 |
| Ordinary | £1 | 1 | 1 |
| Total authorised shares were 153,000 in both 2020 and 2019, allotted and fully paid were 1,200 at £1 each. |
| 21. | PENSION COMMITMENTS |
| The Company operates a defined contribution pension scheme. The pension cost charged for the year represents contributions payable by the Company to the scheme and amounted to £825K (2019: £704K). There was £121K (2019: £89K) outstanding at the end of the financial year. |
| 22. | RELATED PARTY DISCLOSURES |
| See note 6 for disclosure of the directors’ remuneration, notes 16 and 17 for disclosures of balances due from its fellow subsidiary and due to its parent companies. |
| Fine Organics Limited (Registered number: 01532065) |
| Notes to the Financial Statements - continued |
| for the Year Ended 31 December 2020 |
| 23. | ULTIMATE CONTROLLING PARTY |
| The immediate parent undertaking of the Company is Lianhetech Europe Ltd, a company incorporated in the UK. |
| The intermediate parent undertaking of the Company is Lianhetech Holdco Ltd, a company incorporated in the UK. |
| The ultimate parent undertaking of the Company is Lianhe Chemical Technology Co. Ltd, a company incorporated in P.R. China. This is the largest and smallest group for which consolidated financial statements are prepared. |
| There is no one ultimate controlling party. |