Innospec Limited

Innospec Limited

Herne

Befreiender Jahresabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

INNOSPEC LIMITED

Cheshire/UK

Annual report and financial statements for the year ended 31 December 2023

Registered number 00344359

Contents

Directors and advisers.

Strategic report

Directors' report

Statement of directors' responsibilities in respect of the financial statements

Independent auditors' report to the members of Innospec Limited

Statement of comprehensive income

Balance sheet

Statement of changes in equity

Statement of accounting policies

Notes to the financial statements

Directors and advisers for the year ended 31 December 2023

Directors

Graeme Thomas Blair (Company Secretary also)

Philip John Boon

Ian Philip Cleminson

Graeme Kay

Christopher John Parsons

Keri Louise Tither

Independent auditors

PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

1 Hardman Square

Manchester

M3 3EB

Solicitors

Faegre Drinker Biddle & Reath LLP

7 Pilgrim Street

London

EC4V 6LB

Gibson Dunn & Crutcher

Telephone House

2 - 4 Temple Avenue

London

EC4Y OHB

Hogan Lovells

Atlantic House

Holborn Viaduct

London

ECIA 2FG

Bankers

Barclays Bank Plc.

48B - 50 Lord Street

Liverpool

L2 1TD

Registered office

Innospec Manufacturing Park

Oil Sites Road

Ellesmere Port

Cheshire

CH65 4EY

Registered number

00344359

Strategic report for the year ended 31 December 2023

Principal activities

The principal activity of Innospec Limited ('the Company') during the year remained that of the manufacture and sale of specialty chemicals. The Company has branches in Germany, Spain, Italy, France, Cyprus, Sweden (in liquidation, which is expected to be complete by the end of the first half year 2024), Russia (liquidated as at 18 April 2023) and Singapore. Additionally, the Company maintains rep offices in India, Dubai and Hungary.

The entire share capital is owned by Innospec Holdings Limited and the ultimate holding company is Innospec Inc..

Business review

The Company manufactures and sells specialty chemicals and is part of the Innospec Inc. Group. For the year ended 31 December 2023 Innospec Limited divided its activities into three business segments: Fuel Specialties, Oilfield Services and Performance Chemicals. All business segments operate on an integrated regional model focusing on three world areas: Americas, Asia Pacific and EMEA (Europe, Middle East and Africa).

The statement of comprehensive income for the year is set out on page 14. The Company has generated a profit in the year ended 31 December 2023. The profit for the financial year was £23,924,000 (2022: £82,445,000). Net assets as at 31 December 2023 were £194,049,000 (2022: £224,225,000).

Key performance indicators used by the Company are as follows:

The overall sales decrease of 6.4% is mostly driven by Fuel Specialties, with this segment being the largest sector. Fuel Specialties sales fell by £18.2m or 5.5%, followed by Oilfield Services sales decreasing by £4.4m or 13.7%. Performance Chemicals sales fell by £4.0m or 7.1%. Gross profit, however, increased by £2.0m with gross margins rising from 25.1% in 2022 to 27.4% in the reporting period due to pricing and product mix. Net administrative, distribution expenses and other operating income increased by £11.5m year on year. The above factors led to a decrease in operating profit of £9.5m, falling from £38.2m in 2022 to £28.7m in 2023. The Company maintained a net interest receivable position albeit at a lower level than last year, moving from £52.6m in 2022 to £0.9m in 2023 primarily driven by foreign exchange movements year on year.

The Company has no external bank debt but is party to overall facility funding through other members of the Innospec Inc. Group ('the Group').

Strategy

The Company strategy is to develop new and improved products and technologies to continue to strengthen and increase our market positions within our Fuel Specialties, Oilfield Services and Performance Chemicals segments.

The Company focuses on opportunities that would extend its technology base, geographical coverage or product portfolio. By focusing on the Fuel Specialties, Oilfield Services and Performance Chemicals segments, in which the Company has existing experience, expertise and knowledge, this provides opportunities for positive returns on investment with reduced operating risk.

Future developments

The directors remain confident of the long-term prospects of the Company.

Principal risks and uncertainties

The principal risks and uncertainties of the Company are integrated with the principal risks and uncertainties of the Group and are not managed separately. The Group has an extensive risk management structure in place which is designed to identify, manage and mitigate business risk.

The principal risks and uncertainties are recorded on page 10 of the Form 10-K for the year ended 31 December 2023 of the ultimate parent company, Innospec Inc., a copy of which is available from the Company website www.innospec.com.

The following sections on global economic conditions, government product regulation, climate change, epidemics and pandemics and foreign operations have been worded from a Group perspective, but also apply to the Company.

Global economic conditions

Global economic factors affecting our business include, but are not limited to, geopolitical instability in some markets, consumer demand for premium personal care and cosmetic products, miles driven by passenger and commercial vehicles, legislation to control fuel quality, impact of alternative propulsion systems, and oil and gas drilling and production rates. The availability, cost and terms of credit have been, and may continue to be, adversely affected by the foregoing factors and these circumstances have produced, and may in the future result in, illiquid markets and wider credit spreads, which may make it difficult or more expensive for us to obtain credit.

The level of inflation and energy costs may result in an adverse impact to the group's results from employee wages and other costs of operations of our manufacturing sites.

Continuing uncertainties in the United Kingdom (U.K.) and international markets and economies leading to a decline in business and consumer spending could adversely impact our results of operations, financial position and cash flows.

Government product regulation

We are subject to regulation by federal, state, local and foreign government authorities. In some cases, we need government approval of our products, manufacturing processes and facilities before we may sell certain products. Many products are required to be registered with the United Kingdom (U.K.) Environment Agency, the U.S. Environmental Protection Agency (EPA), the European Chemicals Agency (ECHA) and comparable government agencies elsewhere. We are also subject to ongoing reviews of our products, manufacturing processes and facilities by government authorities, and must also produce product data and comply with detailed regulatory requirements.

In order to obtain regulatory approval of certain new products we must, among other things, demonstrate that the product is appropriate and effective for its intended uses, that the product has been appropriately tested for safety and that we are capable of manufacturing the product in accordance with applicable regulations. This approval process can be costly, time consuming, and subject to unanticipated and significant delays. We cannot be sure that necessary approvals will be granted on a timely basis or at all. Any delay in obtaining, or any failure to obtain or maintain, these approvals would adversely affect our ability to introduce new products and to generate income from those products. New or stricter laws and regulations may be introduced that could result in additional compliance costs and prevent or inhibit the development, manufacture, distribution and sale of our products. Such outcomes could adversely impact our results of operations, financial position and cash flows.

Diverse chemical regulatory processes in different countries around the world might create complexity and additional cost. U.K. REACH, which was precipitated by the U.K.'s exit from the European Union (E.U.), is one such example.

Climate change

The outcome of new or potential legislation or regulation in the U.K. and other jurisdictions in which we operate may result in new or additional requirements, additional charges to fund energy efficiency activities, fees or restrictions on certain activities. Compliance with these initiatives may also result in additional costs to us, including, among other things, increased production costs, additional taxes, reduced emission allowances or additional restrictions on production or operations. Any climate change regulations enacted in the future could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Even without such regulation, increased public awareness and adverse publicity about potential impacts on climate change emanating from us or our industry could harm us. We may not be able to recover the cost of compliance with new or more stringent laws and regulations, which could adversely affect our business and negatively impact our growth. Furthermore, the potential impacts of climate change and related regulation on our customers are highly uncertain and may adversely affect us.

Epidemics and pandemics

Epidemics, pandemics, outbreaks of novel diseases and other adverse public health developments in countries and states where we operate may arise at any time. Such developments, including the COVID-19 pandemic, have had, and in the future may have, an adverse effect on our business, financial condition and results of operations. These effects include a potentially negative impact on the availability of our key personnel, labour shortages and increased turnover, temporary closures of our facilities or facilities of our business partners, customers, suppliers, third-party service providers or other vendors, and interruption of domestic and global supply chains, distribution channels and liquidity and capital or financial markets. In particular, restrictions on or disruptions of transportation, port closures or increased border controls or closures, or other impacts on domestic and global supply chains or distribution channels, could increase our costs for raw materials and commodity costs, increase demand for raw materials and commodities from competing purchasers, limit our ability to meet customer demand or otherwise have a material adverse effect on our business, financial condition and results of operations or cash flows.

Precautionary measures that we may take in the future intended to limit the impact of any epidemic, pandemic, disease outbreak or other public health development, may result in additional costs. In addition, such epidemics, pandemics, disease outbreaks or other public health developments may adversely affect economies and financial markets throughout the world, such as the effect that COVID-19 has had on world economies and financial markets, which may affect our ability to obtain additional financing for our businesses and demand for our products and services. The extent to which COVID-19 or other pandemics will impact our business and our financial results in the future will depend on future developments, which are highly uncertain and cannot be predicted. Such developments may include ongoing spread of the virus, disease severity, outbreak duration, extent of any reoccurrence of the coronavirus or any evolutions or mutations of the virus, and availability, administration and effectiveness of vaccines and development of therapeutic treatments that can restore consumer and business economic confidence.

Foreign operations

We serve global markets and operate in certain countries with political and economic instability, including the Middle East, Northern Africa, Asia-Pacific, Eastern Europe and South American regions. Our international operations are subject to numerous international business risks including, but not limited to, geopolitical and economic conditions, military actions and war, risk of expropriation, import and export restrictions, trade wars, exchange controls, national and regional labour strikes, high or unexpected taxes, government royalties and restrictions on repatriation of earnings or proceeds from liquidated assets of overseas subsidiaries. Any of these could have a material adverse impact on our results of operations, financial position and cash flows.

Companies Act 2006 S172 (1)

Consequences of any decisions in the long term

Consideration is given to the impact of any decisions in the long term. At the core, this involves promoting the Company's success whilst also having regard to the interests of the Company's stakeholders.

Business relationships with suppliers, customers and others and Standards of business conduct

The Company is committed to fair dealings with its suppliers, customers, partners and other stakeholders. In order to achieve this, employees are required and expected to run the Company's business in accordance with its Code of Conduct, to complete regular related training and to certify compliance with the Code.

Interests of Employees

Consultation with employees and their representatives continues at all levels, with the aim of ensuring that employees' views, regarding decisions that are likely to affect their interests, are taken into account and that all employees are aware of the financial and economic performance of the business units in which they are employed, and of the Company as a whole. Communication with employees continues through newsletters and briefing groups.

Impact of operations on the community and the environment

Monitoring and measuring the impact on the environment has been a long-standing core element of the Company's sustainability strategy. The Company is committed to using resources as efficiently as possible and minimising the impact of our operations on the environment. Advancing technologies and processes are continuously reviewed, so we can actively seek out opportunities to improve our performance. The Company understands the important role of our business in the social and economic development of the communities in which we are based. Supporting our employees to participate in community and fundraising activities is a core business value that benefits everyone involved. Further details of our sustainability strategy, focus areas and activities can be found in Innospec Inc.'s latest Responsible Business Report, which is available on our website.

Health, safety and environment

Innospec is committed to the protection of the environment, the safe supply of its products and the health and safety of its employees and others who may be affected by the Company's activities. This is achieved by the provision and maintenance, as far as is reasonably practicable, of safe plant, Group policies, procedures and systems at work. The company seeks to use resources as efficiently as possible and to minimize the impact of its operations on the environment, with a particular focus on: reducing Greenhouse Gas (GHG) emissions, energy use, water use, waste generation and safe chemical management. The company ensures that there are effective methods of consultation and communication of health, safety and environmental issues with employees across the organisation. Innospec is committed to legal compliance as a minimum acceptable standard while striving to achieve best industry practices, and to continuous improvement of its support systems and the quality of their application.

Streamlined Energy and Carbon Reporting

Performance Summary

Methodology

Energy Efficiency narrative 2023

As part of Innospec's efforts to decarbonize, the Ellesmere Port site completed the first phase of the installation of a new Energy Centre which includes a 4MWe combined heat and power (CHP) plant. The plant will ultimately generate electricity for the site, steam for process operations and hot water for space heating. Initially powered by natural gas, the plant has been designed so that it can be converted to operate on an intermediary 20% hydrogen blend and in the longer term, 100% low-carbon hydrogen, as soon as it becomes available.

Although in the long term this will have a significant reduction in the site's emissions, in the short term there will be an increase in scope 1 emissions due to increased natural gas consumption at the site.

In October 2023, the first phase of the project came online, and the facility began to generate electricity for internal use on the site. As a result, there was an increase in the use of natural gas and a decrease in the amount of electricity purchased from the grid. Concurrently, the existing boiler continued to operate to generate the steam and heating for the site. As a result, there was a 25% increase in scope 1 emissions, a 14% decrease in scope 2 emissions and a 13% increase in total energy consumption at the site. The site also saw a 31% decrease in production linked to low energy intensity production activities such as blending which coupled with the increase in energy consumption resulted in the intensity ratio increasing by 64% for the same period.

Energy reduction continues to be a focus for the Company. During 2023, a range of energy reduction and efficiency projects have been implemented globally across all our manufacturing facilities, achieving a total energy saving of 2,161 MWh and reduction in our total group Scope 1 emissions by 66 metric tonnes CO ₂ equivalent.

For the Innospec Limited site this included the overhaul of the site's research laboratories air handling ventilation system. This involved the installation of new variable speed drives and an air conditioning / heat pump and going forward will provide annual savings of 385,440 kWh in electricity. The site's renewable energy systems consist of a small wind turbine and solar panels which generated 8,440kWh of electricity in 2023. This renewable electricity was used to power two large Innospec signs on external buildings and one EC charging station. 5,175 kWh excess energy was returned to the Innospec site grid. Innospec Limited also maintained its ISO 50001:2011 certification of its energy management system in the reporting year.

Financial risk management

The Company's operations expose it to a variety of financial risks that include price risk, credit risk, liquidity risk, market risk and foreign exchange risk.

Price risk

The Company offers fixed prices for some long-term sales contracts. As manufacturing and raw materials costs are subject to variability the Company uses commodity swaps from time to time to hedge the cost of some raw materials to reduce the volatility on earnings and cash flows, although none have been used in the financial year or held at the year end. The derivatives are considered risk management tools and are not used for trading purposes. The Company's objective is to manage its exposure to fluctuating costs of raw materials.

Credit risk

Credit limits, ongoing credit evaluation and account monitoring procedures are used to minimise bad debt risk. Collateral is not generally required.

Liquidity risk

The Company has no external debt. Liquidity risk is managed at Innospec Inc. Group level with a mixture of long-term and short-term facilities designed to ensure that all Group companies have sufficient funds available for operations if debt is required.

Market risk

Market risk is managed at Group level using derivatives, including foreign currency forward exchange contracts, in the normal course of business. The derivatives used in hedging activities are considered risk management tools and are not used for trading purposes. In addition, the Group enters into derivative instruments with a diversified Group of major financial institutions in order to manage the exposure to nonperformance of such instruments. The Company does not hold any derivative instruments.

Foreign exchange risk

The primary foreign currencies in which the Company has exchange rate fluctuation exposure are the European Union euro and US dollar. There is, to a degree, an inherent hedge in that the Group has cash inflows and outflows in these currencies. Where exposures are identified the Group puts in place hedging transactions between Group companies, the Group exposure being hedged with third party financial institutions.

By order of the board

Directors' report for the year ended 31 December 2023

The directors present their annual report and the audited financial statements of the Company for the year ended 31 December 2023. The Company structure is referenced in the Strategic Report.

Dividends

The Company on 30 March and 10 November respectively paid dividends to the value of £28,372,000 and £27,524,000 respectively (2022: £326,595,000). The directors do not recommend a final dividend (2022: £nil).

Directors

The directors set out on page 1 have held office throughout the year and up to the date of signing the financial statements.

Branches

The Company has branches in Germany, Spain, Italy, France, Cyprus, Sweden (in liquidation, which is expected to be complete by the end of the first half year 2024), Russia (liquidated as at 18 April 2023) and Singapore. Additionally, the Company maintains rep offices in India, Dubai and Hungary.

Qualifying third party indemnity

The Company has maintained a liability insurance for its directors and officers during the year and up to the date of signing the financial statements. The Company has also continued to provide an indemnity for its directors and secretary during the year and up to the date of signing the financial statements, which is a qualifying third party indemnity provision for the purposes of the Companies Act 2006.

Political donations

During the year, the Company made no political donations (2022: £nil).

Research and development

Research and development provide the basis for the growth of the Performance Chemicals, Fuel Specialties and Oilfield Services businesses. Activity has been, and will continue to be, focused on the development of new products and formulations for these. All research and development expenditure has been expensed, the amount being £18.6m in 2023 (2022: £17.7m).

Employees

Consultation with employees and their representatives continues at all levels, with the aim of ensuring that employees' views, regarding decisions that are likely to affect their interests, are taken into account and that all employees are aware of the financial and economic performance of the business units in which they are employed, and of the Company as a whole. Communication with employees continues through newsletters and briefing Groups.

The Company is an equal opportunities employer. The Company's policies seek to promote an environment free from discrimination, harassment and victimisation, and to ensure that no employee is treated less favourably on the grounds of gender, marital status, race, colour, nationality or national origin, disability or sexual orientation, or is disadvantaged by conditions or requirements, including age limits, which cannot objectively be justified. Entry into, and progression within, the Company is determined solely on the basis of work criteria and individual merit.

It is the Company's policy to apply best practice in the employment of disabled people. The Company seeks to find alternative work and arranges appropriate training for any of its employees who may be disabled by injury or by the onset of an adverse medical condition. Full and fair consideration is given to every application for employment from disabled persons whose aptitude and skills can be utilised in the business, and to their subsequent training and career development. Appropriate medical advice is considered where necessary.

We also encourage employee involvement in the Company's performance through Group-wide employee share and bonus schemes.

As per the employee information section set out in note 5, the average number of persons employed by the Company (including directors) during the year was 625 (2022: 593).

Companies Act 2006 S172 (1)

The Company aims to foster fair and honest relationships with its employees, suppliers, customers and other stakeholders. Reference is made to the Strategic Report for further details on these matters.

Financial instruments

Details of financing and treasury policies, along with the management of treasury risk, interest rate and foreign exchange risk can be found in the Strategic Report.

Future developments

An indication of the likely future developments in the business of the Company can be found in the Strategic Report.

Going concern

The directors of the Company have prepared cash flow forecasts for a period of at least 12 months from the date of approval of these financial statements which indicate that, taking account of reasonably possible downsides, the Company will have sufficient funds, through funding from its existing facilities, to meet its liabilities as they fall due for that period.

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and meet its liabilities as they fall due for at least 12 months from the date of these financial statements. The Company therefore continues to adopt the going concern basis in preparing its financial statements.

Independent auditors

PricewaterhouseCoopers LLP indicated their willingness to continue in office and a resolution that they be reappointed as auditors will be proposed at the annual general meeting.

Disclosure of information to the auditors

Each person who is a director at the date of approval of this report confirms that:

By order of the board

Innospec Manufacturing Park

Oil Sites Road, Ellesmere Por

Cheshire, CH65 4EY

Statement of directors' responsibilities in respect of the financial statements

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", 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 the financial statements, the directors are required to:

The directors 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.

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.

Independent auditors' report to the members of Innospec Limited Report on the audit of the financial statements

Opinion

In our opinion, Innospec Limited's financial statements:

We have audited the financial statements, included within the Annual report and financial statements (the "Annual Report"), which comprise: the Balance sheet as at 31 December 2023; the Statement of comprehensive income and the Statement of changes in equity for the year then ended; the Statement of accounting policies; and the notes to the financial statements.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

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.

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.

However, 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.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance 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 an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.

With respect to the Strategic report and Directors' report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.

Strategic report and Directors' report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' report for the year ended 31 December 2023 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors' report.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of directors' responsibilities in respect of the financial statements, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they 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.

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 an auditors' 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.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to environmental regulation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006 and tax legislation in the territories in which the company operates. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial results and potential management bias in the selection and application of significant accounting judgements and estimates. Audit procedures performed by the engagement team included:

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.

Use of this report

This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

We have no exceptions to report arising from this responsibility.

for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors

Statement of comprehensive income for the year ended 31 December 2023

^* For restatements see notes 6 and 7

The accounting policies and notes on pages 17 to 42 form part of these financial statements.

All of the activities during the year relate to continuing operations.

Balance sheet as at 31 December 2023

^* For restatements see notes 13 and 14

The accounting policies and notes on pages 17 to 42 form part of these financial statements.

The financial statements on pages 14 to 42 were approved by the board of directors and were signed on its behalf by:

Statement of changes in equity for the year ended 31 December 2023

The accounting policies and notes on pages 17 to 42 form part of these financial statements.

Statement of accounting policies for the year ended 31 December 2023

The Company is a private company limited by shares and incorporated, domiciled and registered in England and Wales in the UK.

Basis of accounting

The financial statements were prepared in accordance with the Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland ("FRS 102") and the Companies Act 2006. The presentation currency of these financial statements is sterling. All amounts in the financial statements have been rounded to the nearest £1,000.

The Company's ultimate parent undertaking, Innospec Inc., incorporated in the USA, includes the Company in its consolidated financial statements. The consolidated financial statements of the ultimate parent are prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and are available to the public and may be obtained from the website given in note 24. In these financial statements, the Company is considered to be a qualifying entity (for the purposes of FRS 102) and has applied the exemptions available under FRS 102 in respect of the following disclosures:

As the consolidated financial statements of Innospec Inc. include the disclosures equivalent to those required by FRS 102, the Company has also taken the exemptions available in respect of the following disclosures:

The Company is exempt by virtue of s400 of the Companies Act 2006 from the requirement to prepare Group financial statements. These financial statements present information about the Company as an individual undertaking and not about its Group.

As the Company is a wholly owned subsidiary of Innospec Inc., incorporated in the USA, the Company has taken advantage of the exemption contained in FRS102.33.1A and has therefore not disclosed transactions or balances with wholly owned subsidiaries which form part of the Group.

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.

Measurement convention and going concern

The financial statements have been prepared on historical cost and going concern bases, which the directors consider to be appropriate for the following reasons. The directors of Innospec Limited have prepared cash flow forecasts for a period of at least 12 months from the date of approval of these financial statements which indicate that, taking account of reasonably possible downsides, the Company will have sufficient funds, through funding from its existing facilities, to meet its liabilities as they fall due for that period.

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and meet its liabilities as they fall due for at least 12 months from the date of these financial statements. The Company therefore continues to adopt the going concern basis in preparing its financial statements.

Goodwill and other intangible assets

Goodwill

Goodwill is stated at cost less any accumulated amortisation and accumulated impairment losses. Goodwill is allocated to cash-generating units or Group of cash-generating units that are expected to benefit from the synergies of the business combination from which it arose.

Other intangible assets

Expenditure on internally generated goodwill and brands is recognised in comprehensive income as an expense as incurred.

Other intangible assets that are acquired by the Company are stated at cost less accumulated amortisation and less accumulated impairment losses.

The cost of intangible assets acquired in a business combination are capitalised separately from goodwill if the fair value can be measured reliably at the acquisition date.

Amortisation

Amortisation is charged to the profit or loss on a straight-line basis over the estimated useful lives of intangible assets. Intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:

The basis for selecting a useful life of 5 - 10 years reflects the minimum expected period before an upgrade to the ERP system is expected.

Goodwill is amortised on a straight line basis over its useful life. Goodwill has no residual value. The finite useful life of goodwill is estimated to be:

This is based on the strengths of the underlying businesses and projected future market growth.

The Company reviews the amortisation period and method when events and circumstances indicate that the useful life may have changed since the last reporting date.

Goodwill and other intangible assets are tested for impairment in accordance with FRS 102, Section 27, Impairment of assets, when there is an indication that goodwill or an intangible asset may be impaired.

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses.

Where parts of an item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets, for example land is treated separately from buildings.

Assets under construction are capitalised and depreciated when available for use or the plant has been commissioned.

The Company assesses at each reporting date whether tangible fixed assets are impaired. Depreciation is charged to comprehensive income on a straight-line basis over the estimated useful lives of each part of an item of tangible fixed assets. Land and assets under construction are not depreciated. The estimated useful lives are as follows:

Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since the last annual reporting date in the pattern by which the Company expects to consume an asset's future economic benefits.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the first-in first-out principle and includes expenditure incurred in acquiring the stocks, production or conversion costs and other costs in bringing them to their existing location and condition. In the case of manufactured stocks and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

Trade and other debtors/creditors

Trade and other debtors are recognised initially at transaction price. Trade and other creditors are recognised initially at transaction price. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument.

Investments in subsidiaries

These are separate financial statements of the Company. Investments in subsidiaries are carried at cost less impairment.

Provisions for remediation costs

Remediation costs include both environmental compliance and remediation costs. Environmental compliance costs include ongoing maintenance, monitoring and similar costs and extend to environmental liabilities that result from other-than-normal operation of long-lived assets, for example pollution. Remediation costs relate to asset retirement obligations at the Company's manufacturing sites of the long-lived assets, linked to their normal operation. The Company recognises environmental remediation liabilities when they are probable and the costs can be reasonably estimated, and asset retirement obligations when there is an obligation based on a legal requirement, including those arising from a Company promise, and the costs can be reasonably estimated. The estimation of cost is based on the present value of the future costs discounted at an appropriate discount rate.

The carrying amount of liabilities is reviewed regularly. Changes in operational assumptions, timing, laws or technology are reflected in an adjustment to the provision. The effect of inflation and discounting on the amount of liabilities is recorded as a finance charge.

Turnover

Turnover represents the invoiced value of goods, net of trade discounts and value added tax. Turnover is recognised on invoice when goods are despatched or upon receipt by the customer, dependent on the terms of trade.

Other operating income

The company provides administrative services and the use of intellectual property to fellow subsidiary undertakings.

Research and development

Expenditure on research activities is recognised in comprehensive income as an expense as incurred.

Expenditure on development activities may be 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 design for, construction or testing of the production of new or substantially improved products or processes. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads and capitalised borrowing costs. Other development expenditure is recognised in comprehensive income as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses.

Foreign currencies

Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. All currency gains or losses are taken to comprehensive income in the year in which they arise.

Taxation

Tax on the profit or loss for the year comprises current tax and deferred tax. Tax is recognised in comprehensive income except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are disallowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense.

Deferred tax is provided in respect of the additional tax that will be paid or avoided on differences between the amount at which an asset or liability is recognised in a business combination and the corresponding amount that can be deducted or assessed for tax.

Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that is it probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Defined contribution plans and other long term employee benefits

A defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in comprehensive income in the periods during which services are rendered by employees.

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 is calculated separately for each plan 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 and having maturity dates approximating to the terms of the Company's obligations. A valuation is performed 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. As the plan is closed to future accrual, a surplus cannot be recovered through reduced contributions in future and with the plan's trust deed and rules stating, that, if on winding up the plan, any assets remain, then trustees will apply the whole surplus in increasing benefits correspondingly after consultation with the Actuary, the Company and trustees.

Changes in the net defined benefit liability arising from employee services 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.

Re-measurement of the net defined benefit liability/asset is recognised in other comprehensive income in the period in which it occurs.

Leases

Leases in which the Company assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. All other leases are classified as operating leases. Leased assets acquired by way of finance leases are stated on initial recognition at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, including any incremental costs directly attributable to negotiating and arranging the lease. At initial recognition a finance lease liability is recognised equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The present value of the minimum lease payments is calculated using the interest rate implicit in the lease.

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses in the periods in which they are incurred.

Operating leases

Payments (excluding costs for services and insurance) made under operating leases are recognised in comprehensive income on a straight-line basis over the term of the lease unless the payments to the lessor are structured to increase in line with expected general inflation; in which case the payments related to the structured increases are recognised as incurred. Lease incentives received are recognised in comprehensive income over the term of the lease as an integral part of the total lease expense.

Share based payments

The Company participates in a Group equity settled share based payment programme. Share options in Innospec Inc. are granted to employees and vest dependent in part on performance targets being met. The fair value of the employee services received in exchange for the grant of share options is recognised as an expense over the vesting period.

The fair value of the options is calculated using the Black-Scholes model. In some cases certain performancerelated options are dependent upon external factors such as the Innospec Inc. stock price and fair value of these options is instead calculated using a Monte Carlo model.

Stock equivalent unit payments ("SEUs")

The Company participates in a Group SEU payment programme. SEUs in Innospec Inc. are granted to employees and vest dependent in part on performance targets being met. The fair value of the employee services received in exchange for the grant of SEUs is recognised as an expense and corresponding accrual over the vesting period with the accrual released on exercise of SEUs granted.

In some cases certain performance-related SEUs are dependent upon external factors such as the Innospec Inc. stock price. In such cases the fair value of the SEUs is calculated using the Monte Carlo model.

Notes to the financial statements for the year ended 31 December 2023

1 Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates are associated assumptions based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

With the exception of the remediation provision (note 15) and pensions (note 18), the directors do not believe that there are any accounting policies that would be likely to produce materially different results should a change be made to the underlying judgements, estimates and assumptions. In relation to the remediation provision (note 15), environmental liabilities are recognised when they are probable and costs can be reasonably estimated, and asset retirement obligations when there is a legal obligation and costs can be reasonably estimated. The Company has to anticipate the programme of work required and the associated future expected costs, and comply with local environmental legislation. Assumptions are developed utilizing the latest information available together with recent costs. While we believe our assumptions for environmental liabilities are reasonable, they are subjective judgements and it is possible that variations in any of the assumptions will result in materially different calculations to the liabilities we have reported. Regarding pensions, a critical accounting judgement in relation to the derecognition of the pension surplus has been applied as outlined in note 18, in addition to key estimates regarding pension assumptions, as disclosed in note 18.

2 Turnover

The whole of the Company's turnover relates to one class of business split across four business segments, the manufacture and sale of specialty chemicals. An analysis of turnover by geographical market is given below:

3 Operating profit

4 Directors' remuneration

Six directors (2022: six) have retirement benefits accruing under money purchase pension schemes. Four directors (2022: three) exercised share options and there are six directors (2022: six) in respect of whose qualifying services shares are receivable under long term incentive schemes.

None of the directors have pension benefits accruing under defined benefit schemes (2022: none).

5 Employee information

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

6 Interest receivable and similar income

^* Foreign exchange translation gains have been restated in the prior period to reflect the net cumulative movements of individual forward currency swap contracts and loans to Group undertakings. As a result prior year balances for interest receivable and similar income have reduced by £41,414,000 compared with amounts previously reported.

7 Interest payable and similar expenses

^* Foreign exchange translation losses have been restated in the prior period to reflect the net cumulative movements of individual forward currency swap contracts and loans to Group undertakings. As a result prior year balances for interest payable and similar expenses have reduced by £41,414,000 compared with amounts previously reported.

8 Tax on profit

Reconciliation of effective tax rate

The tax assessed for the year is lower (2022: lower) than the standard rate of corporation tax in the UK. The differences are explained overleaf.

Factors that may affect future tax charges

The UK corporation tax rate for the 12-month period to 31 December 2023 was 23.5% (2022: 19.0%). On 1 April 2023, the UK corporation tax rate increased from 19% to 25%, which will increase the Company's future tax charge accordingly. No further announcements have been made by the UK Government in relation to changes to the future UK corporation tax rate. As the substantially enacted rate of corporation tax at 31 December 2023 was 25%, this has been considered in calculating the Company's deferred tax assets and liabilities.

9 Intangible assets

In 2023 the Company capitalised £12.1m (2022: £2.3m) in relation to software for a new Enterprise Resource Planning (ERP) system covering the EMEA and ASPAC regions. No amortisation has been charged as the new system is not yet in use.

Amortisation recognised in comprehensive income is recorded within administrative expenses.

10 Tangible assets

11 Investments

Additions during the year ended 31 December 2022 related to capital injections made by the Company in respect of Innospec Saudi Arabia Industry Company Limited.

The Company's subsidiary undertakings at 31 December 2023 are set out below:

^* Direct subsidiary

12 Stocks

The provision for write-down of stocks to net realisable value amounted to £5,529,000 (2022: £5,918,000).

13 Debtors

Amounts owed by Group undertakings are unsecured and are repayable on demand and bore interest at rates of up to EURIBOR for EUR and LIBOR for USD denominated balances up to and including 30 June 2023. From 1 July 2023 interest rates are stated at EURIBOR and SOFR plus 2.75% for EUR and USD denominated balances respectively.

Trade debtors are stated after provisions for impairment of £2,248,000 (2022: £1,124,000).

^* Amounts owed by Group undertakings have been restated in the prior year to reflect the net position balances due from individual Group undertakings. As a result the prior year balance for amounts owed by Group undertakings has reduced by £410,514,000 and a corresponding decrease in amounts owed to Group undertakings has also been recognised (Note 14).

14 Creditors: amounts falling due within one year

Amounts owed to Group undertakings bear no interest, are unsecured and are repayable on demand.

The deferred tax liability comprises:

^* Amounts owed to Group undertakings have been restated in the prior year to reflect the net position of balances due to individual Group undertakings. As a result the prior year balance for amounts owed to Group undertakings has reduced by £410,514,000 and a corresponding decrease in amounts owed by Group undertakings has also been recognised (Note 13).

15 Remediation provision

Total costs for remediation are evaluated on an annual basis to take account of expenditure incurred and to amend the scope and cost of future activities in the light of findings from projects carried out.

The forward profile of the provision is as follows:

The remediation provision reflects the current best estimate of liabilities arising under environmental regulations. It is based on a programme of future work required such as ongoing maintenance, monitoring and associated costs of asset retirement obligations. The principal uncertainties relate to the future product life of Tetra-Ethyl Lead used in aviation fuels and to the phasing and timing of the forward programme of work. The costs of vacating the Ellesmere Port site are viewed as contingent as the Company has no present intention of relocating and are therefore not included in the provision, see note 22.

16 Called up share capital

17 Capital redemption reserve

18 Pension deficit

The Company operates three pension schemes for employees - a defined contribution and two defined benefit schemes.

Defined contribution scheme

Payments made in respect of the defined contribution schemes were £5,337,000 (2022: £4,789,000). The assets of the scheme are held separately from those of the Company. There were no prepaid or outstanding contributions as at 31 December 2023 (2022: £nil).

Defined benefit schemes

UK

The scheme is a self-administered and funded scheme which closed to future service accrual on 31 March 2010. The assets of the scheme are held separately from those of the Company. The trustees and the Company have agreed that no contributions are required for the plan, as the plan was in surplus as at the most recent valuation, dated 31 December 2023.

The projections are based on an update of a preceding full actuarial valuation as at 31 December 2020, thereby introducing an element of approximation relative to the result of a hypothetical full actuarial valuation at 31 December 2023 for FRS102 purposes. Having regard to the size of the assets and liabilities of the plan, uncertainties in the result are unlikely to exceed the levels of significance usually applicable to the Company's balance sheet and statement of comprehensive income.

No contributions were made in 2023 and the expected contributions for 2024 are £nil due to there being no fund deficit at the most recent valuation.

In May 2022, the Trustees of the UK Plan entered into an agreement with Legal and General Assurance Society Limited to acquire an insurance policy that operates as an investment asset, with the intent of matching the remaining uninsured part of the UK Plan's future cash outflow arising from the accrued pension liabilities of members. Such an arrangement is commonly termed as a "buy-in". The benefit obligation was not transferred to the insurer, and the Company remains responsible for paying pension benefits. The initial value of the asset associated with this contract was equal to the premium paid to secure the contract and is adjusted each reporting period to reflect the estimated fair value of the premium that would be paid for such a contract at that time. The buy-in reduces the UK Plan's value at a risk in relation to key risks associated with improved longevity, inflation and interest rate movements while improving the security to the UK Plan and its members. The Company consequently benefits from the buy-in as it reduces the UK Plan's potential reliance on the Company for future cash funding requirements.

Following the buy-in, the UK Plan does not need to follow an investment strategy.

In accordance with FRS 102 an independent funding review of the scheme was carried out by Towers Watson, consulting actuaries, as at 31 December 2023. The following information is provided for disclosure purposes only. The assumptions used by the actuary to calculate the scheme liabilities were:

^* In excess of any guaranteed minimum pension element.

Post-retirement mortality for all members is assumed to be in line with the SAPS S3 Series All tables. In addition, an allowance for future improvements in mortality has been built in to follow Medium Cohort improvements subject to a minimum improvement of 1.5% per annum.

The fair value of the plan assets and the return on those assets were as follows:

Movements in the fair value of plan assets, defined benefit obligation and deficit of the scheme during the year were:

The actual return on scheme assets in the year was a gain of £28,600,000 (2022: loss of £224,400,000).

Amounts recognised in the statement of comprehensive income in the year were:

Defined benefit costs to the value of £1,900,000 (2022: £3,100,000) were included in the statement of comprehensive income in the current year, of which income of £700,000 (2022: costs of £300,000) were included as part of a plan amendment exercise.

Amounts recognised in other comprehensive income in the year were:

Germany

The Company also maintains an unfunded defined benefit pension scheme covering a number of its current and former employees in Innospec Limited's branch in Germany. The scheme is closed to future entrants and has no assets.

The assumptions used by the actuary to calculate the scheme liabilities were:

Amounts recognised in the statement of comprehensive income in the year were:

The movements in the liabilities and deficit of the scheme during the year were:

19 Share based payments - equity settled

The carrying amount of the share option reserve is £2,803,000 (2022: £2,432,000).

Employee share based payment plans

Under the Innospec Inc. Group equity settled share based payment programmes, participants are granted options in the stock of the ultimate parent company, Innospec Inc..

The Company has two stock option plans, the Omnibus Long-Term Incentive Plan and the ShareSave Plan 2008 under which it currently grants awards. The stock options have vesting periods ranging from 2 to 5 years and in all cases stock options granted expire within 10 years of the date of grant. All grants are at the sole discretion of the Compensation Committee of the Board of Directors. Grants may be priced at market value or at a premium or discount. The aggregate number of shares of common stock reserved for issuance which can be granted under the plans is 2,550,000.

20 Stock Equivalent Units

The carrying amount of the Stock Equivalent Unit liability is £8,886,000 (2022: £9,840,000). This is held directly in accruals within current liabilities.

Employee stock equivalent units ("SEUs")

The Company awards Stock Equivalent Units ("SEUs") from time to time as a long-term performance incentive. SEUs are cash settled equity instruments conditional on certain performance criteria and linked to the Innospec Inc. share price. SEUs have vesting periods ranging from six months to 5 years and in all cases SEUs granted expire within 10 years of the date of grant. Grants may be priced at market value or at a premium or discount. There is no limit to the number of SEUs that can be granted. The liability for SEUs is located in 'Creditors: amounts falling due within one year' in the balance sheet until they are cash settled.

The fair value of SEUs is measured at the balance sheet date using either the Black-Scholes model, or in cases where performance criteria are dependent upon external factors such as Innospec Inc.'s stock price, using a Monte Carlo model. The following assumptions were used to determine the fair value of SEUs at the balance sheet date:

The terms and conditions of the SEU grants in circulation are as follows:

The settlement method for all grants listed above is cash.

The following table summarises information about the SEUs outstanding at 31 December:

21 Financial commitments

At 31 December the Company's capital commitments contracted for but not provided were as follows:

At 31 December the Company had non-cancellable operating lease commitments as follows:

22 Contingent liabilities

The site remediation liabilities are contingent upon the Company vacating the Ellesmere Port manufacturing site. Management has no present intention to follow this course of action.

The Company has entered into an unlimited cross-guarantee arrangement in respect of the borrowings of companies in the Innospec Inc. Group, of which there are Enil at 31 December 2023 (2022: Enil). At 31. December 2023, the net cash position of the Group under the unlimited cross-guarantee arrangement amounted to US$ 203.7 million (31 December 2022: net cash of US$ 147.1 million).

23 Related Parties

Mr David F. Landless is a director of the Company's ultimate parent undertaking and controlling party Innospec Inc.. Mr Landless is also a non-executive director of Ausurus Group Limited which owns European Metal Recycling Limited. The Company sold scrap metal to European Metal Recycling Limited in 2023 for a value of £79,000 (2022: £73,000). A tendering process is operated to select the best buyer for the scrap metal. As at 31 December 2023 European Metal Recycling Limited owed £nil (2022: £nil).

24 Ultimate parent undertaking and controlling party

The directors regard Innospec Holdings Limited, a company registered in England, as the immediate parent undertaking.

The directors regard Innospec Inc., a company registered in the USA, as the ultimate parent undertaking and controlling party. Innospec Inc. is the parent of the smallest and largest Group of undertakings into which the Company's financial statements are consolidated.

Copies of the consolidated financial statements for the ultimate parent undertaking are available from the Company website www.innospec.com. Innospec Inc.'s office is registered at South Valley Highway, Suite 350, Englewood, Colorado USA.