The director presents the strategic report for the year ended 31 December 2024.

Kornit Digital UK Ltd ("the Company") was founded in 2010, It is a wholly owned subsidiary of NASDAQ-listed Kornit Digital Ltd (KDIL).

KDIL supplies, develops, manufactures and markets printing solutions for commercial and industrial use in the apparel and textile industries. The company is a leader in the manufacture of high-speed industrial inkjet printers, pigment inks and chemical products for the apparel, housewares, textile accessories and decorating industries. The Company is responsible for the distribution, maintenance and support of KDIL printing systems and consumables (inks) in the UK market.

The Income Statement shows turnover for the year of £7.7m, a decrease of 15% on 2024 (£9.1m), gross profit of £2.2m, down 4.1% on 2024 (£2.3m) and loss after tax of £95k (2023: profit after tax £473k). There were no recognized gains and losses for 2024 or 2023 other than those included in the statement of comprehensive income. The reason for the decrease in revenue is due to a general decline within the textile industry related to capital goods, mostly driven by consolidation in the industry and pressure on consumer spending.

The impact of the COVID-19 pandemic and the Ukraine war on global supply chain situation had repercussion also on the textile industry from both a consumer behavior and businesses. Many global supply chains continue to face disruptions and pressure from various directions, such as increased transportation costs, shortages of raw materials and supplies, and extremely long lead times. These conditions and the overall uncertainty put consumer spending under pressure, and this was reflected in slowdown in the textile industry, especially for “Fast Fashion”.

Additionally, on 7 October 2023 the action of Hamas against Israel took place, followed by the military response of Israel. Although those facts created additional pressure on the organization, considering its Israeli roots, we have noted no repercussion in terms of core business and trading.

The global textile printing industry is a sub-sector of the textile industry. It encompasses the printing of fabric rolls, finished and unfinished garments and fabrics at various stages of the value chain in the production of goods for the apparel and accessories, household, technology and display sectors.

The Directors recognize that their personnel are its key asset, and the business will continue to commit significant investment in the development of the skills base of all its employees.

The Company's liquidity remains sufficient for the current level of trading, with a positive margin secured by the parent company, a listed company.

During 2024 an amount of £0.5m (£0.8m 2023) was recognized as interest expense, materially related to the parent company loan granted for the acquisition of Custom Gateway Ltd.

Cyclicality of the 2024

The business continues to remain dependent on customer spending which is impacted by inflation and uncertainty related to post-pandemic, and geopolitical situation.

Competition

The markets in which the Company operates continue to remain highly competitive and price sensitive.

Notwithstanding this, as a result of the dynamics in the Textile sector, and the businesses ongoing commitment to developing its service proposition, investing in technology and investing in its employees the Directors are confident that the business will continue to exceed client service level expectations and capitalise on the growth opportunities that the sector will present.

Global economic factors

Ultimately, the business is still driven to an extent by global macro-economic conditions, that effects private spending for consumer goods and interest rates that effect access to capital goods from companies.

Geographical risk

The Company's ultimate parent has its Headquarter in Israel. The October 7th 2023 marks a deeply painful moment for Israel. On this day, the country witnessed the most devastating attack since the establishment of the Israeli state. The Israeli facilities, including the ink manufacturing plant, have remained fully operational since the conflict began.

Shipping remains uninterrupted, ensuring a steady flow in Kornit’s supply chain, however business with certain states could face restrictions due to the geopolitical relations between such countries and Israel.

Legislative risk

The Company has worked hard to ensure compliance with legislative changes, in particular the IR35 changes that became effective as of April 2021.

The directors are in continual discussion with industry peers and focus groups to ensure the Company is aware of any legislative changes that may affect it.

Economic impact of global events

UK businesses are currently facing many uncertainties such as the consequences of Brexit, COVID-19, environmental sustainability and geopolitical events such as the Russian invasion of Ukraine, together with the particular situation in Israel.

Since February 24th, 2022, the world has witnessed Russia’s war of aggression against Ukraine, which has become a serious challenge to many countries but particularly to those in the Euro-Atlantic community.

In 2025 and 2026 the company are setting its sights on profitable growth, rolling out a new revenue model called AIC (All Inclusive Click), according to which customers could access Kornit technology paying an all-inclusive amount per print, available only on the latest Kornit products.

This revenue model is a first-of-its-kind for the industry and will allow Kornit to achieve recurring revenue.

The position of the Company at the year end

The balance sheet on page 11 of the annual financial statements shows that the Company's financial position, measured in terms of net assets, it slightly improved albeit is still poor over the course of the year, as the company suffered from lower sales than in the previous year and the interest on the loan taken out during the year cannot be completed profitably.

Going Concern

As at 31 December 2024, the Company reported a loss for the period of £95k and a net liabilities position of £14,215k. Notwithstanding the net liability position, the Company remains operationally cash generative and held cash balances of £456k at the reporting date.

The Directors have prepared cash flow forecasts covering a period of at least 12 months from the date of approval of these financial statements. These forecasts, which include sensitivity analysis on key assumptions, indicate that the Company will have sufficient liquidity to meet its obligations as they fall due.

The Company continues to be supported by its shareholder. Subsequent to the year end, the shareholder has issued a formal letter of support confirming its intention to provide financial support to the Company, as and when required, for a period of not less than 12 months from the date of approval of these financial statements. The Directors have considered the strength and intention of the shareholder in assessing the reliability of this support.

Based on the Company’s cash flow projections, its current cash resources, continued operational cash generation, and the availability of shareholder support, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on the going concern basis.

The Directors have concluded that there are no material uncertainties that cast significant doubt on the Company’s ability to continue as a going concern.

Outlook

The intention for 2026 and beyond is to continue to build critical mass in core sectors across the Company whilst expanding our geographical footprint aligned to our clients strategic locations.

This report was approved by the board on and signed on its behalf.

The director presents his annual report and financial statements for the year ended 31 December 2024.

The principal activity of the Company is the sale and marketing to UK customers and the provision of technical services to customers for Kornit printing machines.

The results for the year are set out on page 9.

No ordinary dividends were paid in the current or previous year. The director does not recommend payment of a final dividend.

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

The Company did not make any donations in the current year.

The Company is exposed to financial risks including credit risk, liquidity risk and interest rate risk. The directors review these risks regularly and consider them to be appropriately managed through the Company’s policies, cash flow forecasting and credit control procedures.

The Company manages liquidity risk by maintaining sufficient cash balances and by monitoring forecast and actual cash flows on a regular basis. At the year end the Company held adequate cash resources to meet its short-term obligations.

In addition, the Company has contracts in place which provide predictable and recurring income streams. The directors consider that these arrangements, together with existing cash resources, enable the Company to meet its liabilities as they fall due.

The Company is exposed to interest rate risk in relation to its borrowings, which are used to finance operational assets and expansion projects. Borrowings are predominantly at variable rates.

The directors manage this risk by monitoring interest rate movements and assessing the impact on future cash flows. At the year end, the directors considered that the exposure to interest rate fluctuations is moderate and adequately managed within the Company’s overall financial risk framework.

The Company is exposed to credit risk primarily through trade receivables arising from contracts with customers. The directors manage this risk by regularly assessing the creditworthiness of counterparties and monitoring outstanding balances. As a result, the directors believe that the Company’s exposure to credit risk is limited and effectively managed.

The Company has not conducted any research and development during the year.

There have been no material events since the balance sheet date which would require adjustment to, or disclosure in, the financial statements.

The directors are satisfied with the Company’s performance during the year and expect the Company to continue trading on a similar basis in the forthcoming year.

Sedulo Audit Limited were appointed as auditor to the Company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

The director is 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. He is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the Company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the Company’s auditor is aware of that information.

We have audited the financial statements of Kornit Digital UK LTD (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the director's report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of director's remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the director's responsibilities statement on page 5, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the manufacturing and supply sector;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and taxation legislation;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries selected on a risk criteria basis to identify unusual transactions; and

• investigated the rationale behind significant or unusual transactions; and

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• reading the minutes of meetings of those charged with governance;

• enquiring of management as to any actual and potential litigation and claims.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

There were no recognised gains or losses for 2024 and 2023 other than those included in the statement of comprehensive income.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 12 to 23 form part of these financial statements.

The notes on pages 12 to 23 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The notes on pages 12 to 23 form part of these financial statements.

Kornit Digital UK Ltd ("the Company") is a private limited company, limited by shares, and registered in England and Wales, registered number 10937961. The address of its registered office and principal place of business is Suite 1, 7th Floor, 50 Broadway, London, United Kingdom, SW1H 0BL.

The principal activity of the Company is the sale and marketing to UK customers and the provision of technical services to customers for Kornit printing machines.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: the company has taken advantage of the exemption under FRS 102 paragraph 33.1A and has therefore not disclosed transactions or balances with wholly owned members of the group, nor key management personnel compensation.

The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of a state other than the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006.

This information is included in the consolidated financial statements of Kornit Digital Ltd as at 31 December 2023 and these financial statements may be obtained from 12 HaAmal St, Afek Park, Rosh-HaAyin 4809246, Israel.

The financial statements have been prepared on the going concern basis as the Company's parent company, Kornit Digital Limited, has provided written confirmation to provide continued financial support to the company for the foreseeable future, defined as at least 12 months from the date of signing the Kornit Digital UK Limited financial statements for the year ended 31 December 2024. The directors', having reviewed the latest financial information relating to Kornit Digital Limited, have a reasonable expectation that this support can be provided and on this basis, consider it appropriate to prepare these financial statement on the going concern basis.true

Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on the dispatch of goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the cosls incurred or to be incurred in respect of the transaction can be measured reliably.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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

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

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

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

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

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

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

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

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

The Company participates in a group share-based payment arrangement operated by its parent company, Kornit Digital Ltd, which grants share options to certain of its employees and employees of its subsidiaries which includes Kornit Digital UK Ltd.

The Company has elected to recognise and measure its share-based payments expense on the basis of a reasonable allocation of the expense to the group recognised in its consolidated financial statements. The directors consider the number of unvested options granted to the Company's employees compared to the total unvested options granted under the group plan to be a reasonable basis for allocating the expense.

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

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

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

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

The company establishes a provision for debtors that are estimated not to be recoverable. When assessing recoverability, the directors have considered factors such as the aging of the debtors, past experience of recoverability, and the credit profile of individual or groups of customers.

All turnover arose within the United Kingdom

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

Their aggregate remuneration comprised:

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

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

Amounts owed by group undertakings are unsecured, interest free and repayable on demand.

Amounts owed to group undertakings are repayable on demand. Interest is charged at 3%.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Full voting rights are attached to the shares.

The immediate and ultimate parent company is Kornit Digital Ltd, a company incorporated in Israel. The registered office of Kornit Digital Ltd is: 12 HaAmal St. Afek Park, Rosh-HaAyin 4809246, Israel. Kornit Digital Ltd are the smallest and largest group to consolidate the results of the company.