REGISTERED NUMBER: 09449978 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2025

for

ESSEM Ltd

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Profit and Loss Account

7

Balance Sheet

8

Statement of Changes in Equity

9

Cash Flow Statement

10

Notes to the Financial Statements

11

DIRECTORS:

S M Chalmers

Mrs M T Chalmers

REGISTERED OFFICE:

33 Hispano Avenue

Whiteley

Farehman

Hampshire

PO15 7DS

REGISTERED NUMBER:

09449978 (England and Wales)

AUDITORS:

Bates Weston Audit Ltd

Statutory Auditors

Chartered Accountants

The Mills

Canal Street

Derby

DE1 2RJ

BANKERS:

HSBC Bank

Market Place

Chesterfield

Derbyshire

S40 1TN

The directors present their strategic report for the year ended 31 December 2025.

REVIEW OF BUSINESS

During the course of the period, the company's principal activity continued to be that of processing of raw tobacco.

The results for the year show a profit of £31,530 (2024: £245,196). The total shareholders funds have increased to £649,253 (2024: £617,723), primarily as a result of the profit generated during the year.

The reduced profit reflects difficult trading conditions, including increased costs and competitive pressures within the market. The company continues to operate in a challenging economic environment.

PRINCIPAL RISKS AND UNCERTAINTIES

The company is exposed to a number of financial risks. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to clients and the regular monitoring of amounts outstanding for both time and credit limits. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

The company is exposed to a moderate level of price risk, credit risk, liquidity risk and cash flow risk. The company manages these risks by financing its operations through retained profits. There is a risk resulting from foreign exchange due to the international trade. These risks are managed by having bank accounts for the relevant currencies so no exchanges are made unless necessary.

The management objectives are to retain sufficient liquid funds to enable it to meet its day to day requirements, minimise the company's exposure to fluctuating exchange rates, with the future cash flows expected to rise with the company's trading activities.

SECTION 172(1) STATEMENT

The directors consider, both individually and together, that they have acted in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Companies Act 2006) in the decisions taken during the year ended 31 December 2025.

KEY PERFORMANCE INDICATORS

Key performance indicators (KPIs) used by management to monitor performance include:

-

Profitability: profit of £31,530 (2024: profit £245,196)

-

Net assets: £649,253 (2024: £617,723)

-

Liquidity: Cash flow is monitored on an ongoing basis

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS

The directors have had regard to the need to foster the company's business relationships with suppliers, customers and others.

FUTURE DEVELOPMENTS

The directors expect trading conditions to remain challenging but will continue to focus on managing costs and maintaining operations.

ON BEHALF OF THE BOARD:

Mrs M T Chalmers - Director

22 June 2026

The directors present their report with the financial statements of the company for the year ended 31 December 2025.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2025.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2025 to the date of this report.

S M Chalmers

Mrs M T Chalmers

STREAMLINED ENERGY AND CARBON REPORTING

The company has consumed less than 40,000 kWh of energy during the financial year and is therefore exempt from the Streamlined Energy and Carbon Reporting (SECR) requirements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Mrs M T Chalmers - Director

22 June 2026

Opinion

We have audited the financial statements of ESSEM Ltd (the 'company') for the year ended 31 December 2025 which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 2025 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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

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

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

-	certain disclosures of directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

Based on our understanding of the company and industry in which it operates, we considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. Audit procedures performed by the engagement team included:

-

Enquiry of management around actual and potential litigation and claims;

-

Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

-

Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

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

Wayne Thomas FCA (Senior Statutory Auditor)

for and on behalf of Bates Weston Audit Ltd

Statutory Auditors

Chartered Accountants

The Mills

Canal Street

Derby

DE1 2RJ

26 June 2026

TURNOVER

33,428,610

44,594,628

Cost of sales

33,034,542

43,904,768

GROSS PROFIT

394,068

689,860

Administrative expenses

311,988

333,894

OPERATING PROFIT

4

82,080

355,966

Interest payable and similar expenses

5

41,530

28,947

PROFIT BEFORE TAXATION

40,550

327,019

Tax on profit

6

9,020

81,823

PROFIT FOR THE FINANCIAL YEAR

31,530

245,196

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

31,530

245,196

CURRENT ASSETS

Stocks

8

11,596,607

17,427,279

Debtors

9

4,510,887

2,188,557

Cash at bank

434,599

1,003,278

16,542,093

20,619,114

CREDITORS

Amounts falling due within one year

10

15,892,840

20,001,391

NET CURRENT ASSETS

649,253

617,723

TOTAL ASSETS LESS CURRENT LIABILITIES

649,253

617,723

CAPITAL AND RESERVES

Called up share capital

11

100

100

Retained earnings

12

649,153

617,623

SHAREHOLDERS' FUNDS

649,253

617,723

The financial statements were approved by the Board of Directors and authorised for issue on 22 June 2026 and were signed on its behalf by:

Mrs M T Chalmers - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

100

372,427

372,527

Changes in equity

Profit for the year

-

245,196

245,196

Total comprehensive income

-

245,196

245,196

Balance at 31 December 2024

100

617,623

617,723

Changes in equity

Profit for the year

-

31,530

31,530

Total comprehensive income

-

31,530

31,530

Balance at 31 December 2025

100

649,153

649,253

Cash flows from operating activities

Cash generated from operations

14

(425,326

)

105,907

Interest paid

(41,530

)

(28,947

)

Tax paid

(81,823

)

(66,876

)

Net cash from operating activities

(548,679

)

10,084

Cash flows from financing activities

Amount introduced by directors

-

120,000

Amount withdrawn by directors

(20,000

)

-

Net cash from financing activities

(20,000

)

120,000

(Decrease)/increase in cash and cash equivalents

(568,679

)

130,084

Cash and cash equivalents at beginning of year

15

1,003,278

873,194

Cash and cash equivalents at end of year

15

434,599

1,003,278

1.	STATUTORY INFORMATION

ESSEM Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover represents net invoiced sales of goods. Turnover is recognised in the year in which the goods are provided.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Computer equipment

-

33% on cost

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for slow moving and obsolete items. Cost represents the invoiced cost of goods on a first in first out basis.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

3.	EMPLOYEES AND DIRECTORS

2025

2024

£

£

Wages and salaries

275,500

295,500

Social security costs

1,135

3,889

276,635

299,389

The average number of employees during the year was as follows:

2025

2024

Directors

2

2

Administration

1

1

3

3

2025

2024

£

£

Directors' remuneration

230,000

220,000

Information regarding the highest paid director is as follows:

2025

2024

£

£

Emoluments etc

115,000

110,000

4.	OPERATING PROFIT

The operating profit is stated after charging:

2025

2024

£

£

Depreciation - owned assets

-

51

Auditors' remuneration

10,200

9,600

Auditors' remuneration for non audit work

4,440

4,200

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2025

2024

£

£

Interest payable

41,530

28,947

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2025

2024

£

£

Current tax:

UK corporation tax

9,020

81,823

Tax on profit

9,020

81,823

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2025

2024

£

£

Profit before tax

40,550

327,019

Profit multiplied by the standard rate of corporation tax in the UK of 21.900% (2024 - 25%)

8,880

81,755

Effects of:

Expenses not deductible for tax purposes

140

56

Depreciation in excess of capital allowances

-

12

Total tax charge

9,020

81,823

7.	TANGIBLE FIXED ASSETS

Computer

equipment

£

COST

At 1 January 2025

and 31 December 2025

2,531

DEPRECIATION

At 1 January 2025

and 31 December 2025

2,531

NET BOOK VALUE

At 31 December 2025

-

At 31 December 2024

-

8.

STOCKS

2025

2024

£

£

Raw materials

10,872,758

15,344,431

Goods in transit

723,849

2,082,848

11,596,607

17,427,279

9.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2025

2024

£

£

Trade debtors

4,510,887

2,125,775

Prepayments and accrued income

-

62,782

4,510,887

2,188,557

10.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2025

2024

£

£

Trade creditors

15,768,004

19,785,924

Tax

9,007

81,810

Directors' current account

100,000

120,000

Accruals and deferred income

15,829

13,657

15,892,840

20,001,391

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2025

2024

value:

£

£

100

Ordinary

£1

100

100

12.

RESERVES

Retained

earnings

£

At 1 January 2025

617,623

Profit for the year

31,530

At 31 December 2025

649,153

13.	RELATED PARTY DISCLOSURES

SM Tobacco Trading is a related company owned and controlled by S M Chalmers.

There were sales in the year of £32,844,031 (2024: £43,348,530). The balance with this company included in trade debtors at the year-end is £4,451,310 (2024: £1,672,513).

14.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2025

2024

£

£

Profit before taxation

40,550

327,019

Depreciation charges

-

51

Finance costs

41,530

28,947

82,080

356,017

Decrease/(increase) in stocks

5,830,672

(5,444,033

)

(Increase)/decrease in trade and other debtors

(2,322,330

)

4,046,880

(Decrease)/increase in trade and other creditors

(4,015,748

)

1,147,043

Cash generated from operations

(425,326

)

105,907

15.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2025

31.12.25

1.1.25

£

£

Cash and cash equivalents

434,599

1,003,278

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

1,003,278

873,194

16.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.25

Cash flow

At 31.12.25

£

£

£

Net cash

Cash at bank

1,003,278

(568,679

)

434,599

1,003,278

(568,679

)

434,599

Total

1,003,278

(568,679

)

434,599

17.	GOING CONCERN

The company's principal trading activities are expected to be transferred to another entity during 2026. The company will continue to operate on a reduced basis thereafter prior to an intended wind-up at a later date. The directors have considered these plans and are satisfied that they do not impact the company’s ability to meet its liabilities as they fall due. Accordingly, the financial statements have been prepared on a going concern basis.