Registered number: 14684268
FOR THE YEAR ENDED 31 DECEMBER 2025
COMPANY INFORMATION
CONTENTS
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors present the Strategic Report for the year ended 31 December 2025.
Kernel is a multi-brand, multi-niche group of industry-leading recruitment businesses. By creating an innovative, agile and transformative approach to search and hiring solutions, we are driving the recruitment industry forward.
The Group has offices in the United Kingdom, United States of America and Hong Kong and ended the year on 189 (2024 - 172) employees operating across Kernel Group, including the Dartmouth, Pure, Catalyst, Yale and Luminate brands.
The business strategy continues to focus on driving core organic growth across the existing brands globally, creating new brands organically as well as through targeted acquisition.
2025 saw revenues from continuing operations increase by 31% versus 2024 with net fee income increasing by 20% during this period. Due to the Group's continued focus on operational rigour, efficiency, productivity and continued investment, the operating performance from continuing operations improved from a profit of £3,773,000 in 2024 to a profit of £7,239,000 in 2025.
The Group platform provides the necessary governance and expertise in a number of strategic, operational and financial areas to enable the trading brands to flourish. The Group also provides the structure for continued organic growth, investment into new areas, as well as providing a scaleable platform for further acquisitions in the future.
The Group has offices in the United Kingdom, United States of America and Hong Kong and ended the year on 189 (2024 - 172) employees operating across Kernel Group, including the Dartmouth, Pure, Catalyst, Yale and Luminate brands.
The business strategy continues to focus on driving core organic growth across the existing brands globally, creating new brands organically as well as through targeted acquisition.
2025 saw revenues from continuing operations increase by 31% versus 2024 with net fee income increasing by 20% during this period. Due to the Group's continued focus on operational rigour, efficiency, productivity and continued investment, the operating performance from continuing operations improved from a profit of £3,773,000 in 2024 to a profit of £7,239,000 in 2025.
The Group platform provides the necessary governance and expertise in a number of strategic, operational and financial areas to enable the trading brands to flourish. The Group also provides the structure for continued organic growth, investment into new areas, as well as providing a scaleable platform for further acquisitions in the future.
Revenue for the year from continuing operations increased by 31% to £44,636,000 (2024 - £33,989,000).
Adjusted EBITDA (measured as operating profit, excluding charges in respect of exceptional items, depreciation, amortisation, foreign exchange movements, and share based payment expenses) inclusive of both continuing and discontinued operations for the year increased by 25% to £9,165,000 (2024 - £7,333,000).
Adjusted EBITDA from continuing operations for the year increased by 24% to £9,085,000 (2024 - £7,351,000).
Adjusted EBITDA (measured as operating profit, excluding charges in respect of exceptional items, depreciation, amortisation, foreign exchange movements, and share based payment expenses) inclusive of both continuing and discontinued operations for the year increased by 25% to £9,165,000 (2024 - £7,333,000).
Adjusted EBITDA from continuing operations for the year increased by 24% to £9,085,000 (2024 - £7,351,000).
The board’s approach to stakeholder engagement is to be open and have collaborative regular dialogue, recognising that regular dialogue is key to the long-term sustainability and success of the Company. Our stakeholders include our employees, clients, candidates, shareholders and suppliers.
The section below details how, as required by s172 of the Companies Act 2006, the directors have acted to promote the success of the company for the benefit of its stakeholders and, in meeting this responsibility, have had regard, amongst other matters, to:
a) the likely consequences of any decision in the long-term,
b) the interests of the company’s employees,
c) the need to foster the company’s business relationships with suppliers, customers and others,
d) the impact of the company’s operations on the community and the environment,
e) the desirability of the company maintaining a reputation for high standards of business conduct, and
f) the need to act fairly as between members of the company.
The section below details how, as required by s172 of the Companies Act 2006, the directors have acted to promote the success of the company for the benefit of its stakeholders and, in meeting this responsibility, have had regard, amongst other matters, to:
a) the likely consequences of any decision in the long-term,
b) the interests of the company’s employees,
c) the need to foster the company’s business relationships with suppliers, customers and others,
d) the impact of the company’s operations on the community and the environment,
e) the desirability of the company maintaining a reputation for high standards of business conduct, and
f) the need to act fairly as between members of the company.
Page 1
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Why we engage
Employees
Our employees are vital to our success, and we recognise their continued effort, engagement and commitment are essential to the delivery of a first-class service to our clients and candidates. The board listens to, and takes into consideration, the views of our employees in its decision-making.
How we engage
We engage with our employees on a continual basis using a blend of formal and informal methods. Our formal engagement tools include our employee engagement survey, monthly town hall meetings and end of quarter presentations, all of which enable employees to ask questions and provide feedback on an anonymous basis. Our informal engagement tools include regular breakfast meetings between our senior leadership team and employee groups to provide information and allow employees to ask questions and provide feedback, lunch and learn events, and regular engagement meetings with our operations and performance and development teams. Feedback from all engagement tools is presented and discussed at monthly operational board meetings of the senior leadership teams for each of our operating brands, and informs our people strategy for the year.
Material topics of engagement in recent periods
Performance and development:
Developed new leadership framework and sales competency frameworks to ensure clear progression routes and expectations across the sales teams globally.
Incentives:
We reintroduced an incentive trip to Marrakech for the top performances across the non-sales and sales teams globally. Additionally, we have introduced a cross-sell incentive for the sales team, the winner of this receives x2 free plan tickets to anywhere in the world.
Benefits:
We expanded our salary sacrifice offering making the pension contributions on a salary sacrifice basis as well as introducing a cycle saver scheme allowing for salary deductions pre tax for popular e-bike providers.
Clients
Regular engagement with our clients ensures that the services we provide are tailored to, and deepen our understanding of, our clients’ requirements. Our engagement builds trust and enables us to build and develop long-term, strategic partnerships with our clients.
We engage with clients via regular communications in our day-to-day activities, via formal feedback requests and scheduled review meetings. Our high-touch approach to recruitment ensures that our consultants spend time with clients to understand their requirements and ensure we provide tailored, expert advice on their talent decisions. In addition, we host regular events for our clients to provide market information, best practice guidance and industry insights to assist their talent strategies.
We continue to expand our Classroom to Boardroom Foundation, which works directly with students, schools and businesses to overcome career barriers that are very often related to economic disadvantage. Our programmes are developed with a student's potential and career capability front-of-mind. We support secondary and post-16 students, who are at a key inflection point in their lives - typically when they first seriously consider their options for future careers. In partnership with our extensive school network we run skills workshops, work experience placements and apprenticeship programmes. In doing so, we support students to develop their employability skills and connect our students to our global network of clients.
Employees
Our employees are vital to our success, and we recognise their continued effort, engagement and commitment are essential to the delivery of a first-class service to our clients and candidates. The board listens to, and takes into consideration, the views of our employees in its decision-making.
How we engage
We engage with our employees on a continual basis using a blend of formal and informal methods. Our formal engagement tools include our employee engagement survey, monthly town hall meetings and end of quarter presentations, all of which enable employees to ask questions and provide feedback on an anonymous basis. Our informal engagement tools include regular breakfast meetings between our senior leadership team and employee groups to provide information and allow employees to ask questions and provide feedback, lunch and learn events, and regular engagement meetings with our operations and performance and development teams. Feedback from all engagement tools is presented and discussed at monthly operational board meetings of the senior leadership teams for each of our operating brands, and informs our people strategy for the year.
Material topics of engagement in recent periods
Performance and development:
Developed new leadership framework and sales competency frameworks to ensure clear progression routes and expectations across the sales teams globally.
Incentives:
We reintroduced an incentive trip to Marrakech for the top performances across the non-sales and sales teams globally. Additionally, we have introduced a cross-sell incentive for the sales team, the winner of this receives x2 free plan tickets to anywhere in the world.
Benefits:
We expanded our salary sacrifice offering making the pension contributions on a salary sacrifice basis as well as introducing a cycle saver scheme allowing for salary deductions pre tax for popular e-bike providers.
Clients
Regular engagement with our clients ensures that the services we provide are tailored to, and deepen our understanding of, our clients’ requirements. Our engagement builds trust and enables us to build and develop long-term, strategic partnerships with our clients.
We engage with clients via regular communications in our day-to-day activities, via formal feedback requests and scheduled review meetings. Our high-touch approach to recruitment ensures that our consultants spend time with clients to understand their requirements and ensure we provide tailored, expert advice on their talent decisions. In addition, we host regular events for our clients to provide market information, best practice guidance and industry insights to assist their talent strategies.
We continue to expand our Classroom to Boardroom Foundation, which works directly with students, schools and businesses to overcome career barriers that are very often related to economic disadvantage. Our programmes are developed with a student's potential and career capability front-of-mind. We support secondary and post-16 students, who are at a key inflection point in their lives - typically when they first seriously consider their options for future careers. In partnership with our extensive school network we run skills workshops, work experience placements and apprenticeship programmes. In doing so, we support students to develop their employability skills and connect our students to our global network of clients.
Page 2
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Our recent thought leadership programme included client events and presentations on the following topics:
∙Black and ethnic experiences in the workplace;
∙Women in Private Equity events;
∙Candidate sentiment in the form of our Generation Z survey results.
Candidates
We build long-term relationships with our candidates, supporting them in their progression throughout their careers. Regular engagement with our candidates and in-depth knowledge of their skills, experiences and career goals helps us deliver quality services to both our candidates and clients.
We maintain ongoing engagement with our candidates as part of our day-to-day service provision, and we seek specific feedback from candidates following successful placement with a client. In addition, we engage with our candidate population to gain their insight into, and provide market information on, their needs and our services, including salary surveys, the candidate experience and career development. Such engagement includes events and webinars for our candidate population.
As with our clients, increased focus on in-person connections with our candidates has deepened our relationships. We continue to provide thought leadership and practical advice to candidates.
During 2025 we also conducted extensive candidate feedback which was utilised to redesign and develop our candidate experience.
Investors
Maintaining the confidence of our investors is essential to our long-term success, and to enable our growth strategy.
We maintain a regular dialogue with our investors, who have access to appropriate management information as well as board meetings to discuss business performance and strategy.
During the year, engagement with our investors included:
We maintain ongoing engagement with our candidates as part of our day-to-day service provision, and we seek specific feedback from candidates following successful placement with a client. In addition, we engage with our candidate population to gain their insight into, and provide market information on, their needs and our services, including salary surveys, the candidate experience and career development. Such engagement includes events and webinars for our candidate population.
As with our clients, increased focus on in-person connections with our candidates has deepened our relationships. We continue to provide thought leadership and practical advice to candidates.
During 2025 we also conducted extensive candidate feedback which was utilised to redesign and develop our candidate experience.
Investors
Maintaining the confidence of our investors is essential to our long-term success, and to enable our growth strategy.
We maintain a regular dialogue with our investors, who have access to appropriate management information as well as board meetings to discuss business performance and strategy.
During the year, engagement with our investors included:
∙Detailed reviews of our financial and operational performance;
∙Consideration of long-term growth plans and acquisition opportunities;
∙Key compliance improvements and policy updates, including review of our risk register;
∙Capital investments and long-term financing arrangements.
Suppliers
Our suppliers support our business, enable us to focus on the value-add, quality services we deliver to our clients and candidates, and helps us develop our continuous improvement approach.
We maintain good relationships with our suppliers, including regular review meetings to discuss service levels and continuous improvement opportunities. We maintain a programme of due diligence of our key suppliers, and ensure contract terms accurately reflect the services provided, manage risk appropriately and that we pay suppliers on agreed terms.
Engagement with our suppliers during the year focused on opportunities for efficiency and service improvement, and standardisation of services and suppliers across our operating brands. Our Supplier Code of Conduct to ensure that the procurement of goods, works and services takes place in conformity with Kernel’s ethical and professional standards and principles.
Our suppliers support our business, enable us to focus on the value-add, quality services we deliver to our clients and candidates, and helps us develop our continuous improvement approach.
We maintain good relationships with our suppliers, including regular review meetings to discuss service levels and continuous improvement opportunities. We maintain a programme of due diligence of our key suppliers, and ensure contract terms accurately reflect the services provided, manage risk appropriately and that we pay suppliers on agreed terms.
Engagement with our suppliers during the year focused on opportunities for efficiency and service improvement, and standardisation of services and suppliers across our operating brands. Our Supplier Code of Conduct to ensure that the procurement of goods, works and services takes place in conformity with Kernel’s ethical and professional standards and principles.
Page 3
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
During the year, investment activities continued in line with the Group's focus on growth.
This focus on investment, along with a robust focus on productivity, have resulted in an Adjusted EBITDA increase of 25% in 2025 versus 2024, with the business strongly primed for further growth in 2026.
The board continues to monitor the economic environment closely.
Principal risks and uncertainties
The Group has a degree of correlation with broader macro-economic trends which also effect the wider recruitment market. As such, there is some inherent uncertainty when assessing longer term future market conditions and therefore the group's revenue.
This risk is mitigated by;
This focus on investment, along with a robust focus on productivity, have resulted in an Adjusted EBITDA increase of 25% in 2025 versus 2024, with the business strongly primed for further growth in 2026.
The board continues to monitor the economic environment closely.
Principal risks and uncertainties
The Group has a degree of correlation with broader macro-economic trends which also effect the wider recruitment market. As such, there is some inherent uncertainty when assessing longer term future market conditions and therefore the group's revenue.
This risk is mitigated by;
∙the Group's diversified and niche market offering across 5 trading brands
∙having geographical diversification in the UK and its key international hubs in the US and Hong Kong
∙robust execution of its strategy
∙strong management of productivity
∙flexible cost base structure
∙its financial ability to continue to invest throughout the economic cycles
∙a strong and highly experienced management team
This report was approved by the board and signed on its behalf.
Page 4
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors present their report and the financial statements for the year ended 31 December 2025.
The loss for the year, after taxation, amounted to £21k (2024 - £4,110k).
No dividends were declared or paid during the year (2024 - £Nil).
The directors who served during the year were:
The business continues to assess opportunities to launch in new markets and sub-sectors through organic growth. These will be assessed and implemented on a case-by-case basis. The business will also continue to review the possibility of seeking to combine with other businesses where it supports the wider strategic goals of the business.
The Group's activities expose it to a number of financial risks including foreign exchange risk and credit risk.
With operations in Euro-denominated and Dollar-denominated countries the business is exposed to fluctuations in the Euro to Sterling and Dollar to Sterling exchange rates. However, with revenue and costs in Euros and Dollars respectively, this risk is naturally hedged. Senior Management review this risk and take it into consideration if funds are required to be moved between currencies.
From a credit risk perspective, we work predominantly with creditworthy financial institutions and organisations that do not represent a high credit risk. However, there are controls in place such as credit-checking, as well as the ability to quickly cease supply for clients who management believe represent a credit risk.
The Group has no significant concentration risk for credit, with revenues spread over a large number of different clients across sectors and geographies.
With operations in Euro-denominated and Dollar-denominated countries the business is exposed to fluctuations in the Euro to Sterling and Dollar to Sterling exchange rates. However, with revenue and costs in Euros and Dollars respectively, this risk is naturally hedged. Senior Management review this risk and take it into consideration if funds are required to be moved between currencies.
From a credit risk perspective, we work predominantly with creditworthy financial institutions and organisations that do not represent a high credit risk. However, there are controls in place such as credit-checking, as well as the ability to quickly cease supply for clients who management believe represent a credit risk.
The Group has no significant concentration risk for credit, with revenues spread over a large number of different clients across sectors and geographies.
The Parent Company has put in place qualifying third-party indemnity provisions for all of the directors of Kernel EquityCo Limited.
Page 5
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The Group places considerable value on having strong relationships with customers and suppliers. The Group engages in regular, open and proactive dialogue with stakeholders and their views are considered when making operational and strategic decisions. Further details on the Group's regard for stakeholders in its decision process is set out in section 172(1) statement in the Strategic Report.
The Group's streamlined energy carbon reporting disclosure covers the Group's greenhouse gas emissions (scope 1,2 and 3) and energy consumption for the year ended 31 December 2025.
During the prior year, the group's electricity consumption transitioned to 100% renewable tariffs, and as
such no Scope 2 emissions from purchased electricity were incurred. Business travel in rental cars did not
occur during the prior year and hence no such scope 3 emissions were incurred.
In February 2026, the Group has entered into new debt facilities, resulting in the drawing of a £5m term loan and the availability of a £7m revolving credit facility, which has not been drawn as of the date of approval of these financial statements. The term loan is repayable in annual instalments and has a termination date of July 2029, with interest being payable at a rate linked to SONIA and a fixed rate margin, dependent upon the adjusted leverage of the Group. The facilities are subject to ongoing compliance with adjusted leverage, interest cover and cash flow cover covenants.
Additionally, the Group repaid £7m of the loan facility provided by Three Hills Capital Partners in February 2026. The terms of this loan have also been modified post-year end, such that the previous 4% cash settled interest payments are no longer due bi-annually, and instead now accrue on a payment in kind basis, resulting in a total interest rate of 10% per annum accruing on the underlying value of the facility. The termination date of the loan has also been extended to November 2029.
Additionally, the Group repaid £7m of the loan facility provided by Three Hills Capital Partners in February 2026. The terms of this loan have also been modified post-year end, such that the previous 4% cash settled interest payments are no longer due bi-annually, and instead now accrue on a payment in kind basis, resulting in a total interest rate of 10% per annum accruing on the underlying value of the facility. The termination date of the loan has also been extended to November 2029.
Page 6
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The auditor, S&W Audit (a trading name of S&W Partners Audit Limited), will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Page 7
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors are responsible for preparing the Group Strategic Report, Directors' Report and the consolidated financial statements, in accordance with applicable law.
Company law requires the directors to prepare consolidated financial statements for each financial year. Under that law they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.
Under company law the directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing the consolidated financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and estimates that are reasonable and prudent;
∙state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;
∙assess the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are 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, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Page 8
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KERNEL EQUITYCO LIMITED
We have audited the financial statements of Kernel EquityCo Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2025 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and the related notes, including material accounting policy information. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and UK-adopted international accounting standards, as applied in accordance with the provisions of the Companies Act 2006.
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 Group and Parent 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.
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 Group and Parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Page 9
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KERNEL EQUITYCO LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report and Financial Statements, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Annual Report and Financial Statements. 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
Responsibilities of directors
Page 10
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KERNEL EQUITYCO LIMITED (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained a general understanding of the Group's legal and regulatory framework through enquiry of management concerning their understanding of relevant laws and regulations, the entity's policies and procedures regarding compliance, and how they identify, evaluate and account for litigation claims. We also drew on our existing understanding of the Group's industry and regulation. We obtained this understanding for significant components through discussion with group and subsidiary management teams.
We understand that the Group complies with the framework through:
∙Outsourcing statutory accounts preparation and tax compliance to external experts.
∙Subscribing to relevant updates from external experts, and making changes to internal procedures and controls as necessary.
∙The directors' close involvement in the day-to-day running of the business, meaning that any litigation or claims would come to their attention directly.
In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements, which are central to the Group's ability to conduct its business, and/or where there is a risk that failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the Group:
∙The Companies Act 2006 and UK-adopted international accounting standards in respect of the preparation and presentation of the financial statements.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur. The areas identified in this discussion were:
∙Payment of bonuses based on sales, which may create an incentive for management to manipulate results.
∙Manipulation of the financial statements, especially revenue, via fraudulent journal entries.
These areas were communicated to the other members of the engagement team not present at the discussion.
The procedures we carried out to gain evidence in the above areas included:
The procedures we carried out to gain evidence in the above areas included:
∙Substantive work on revenue recognition, particularly focusing on permanent hire revenue recognised around the period end.
∙Substantive work on material areas affecting profits.
∙Testing journal entries, focusing particularly on postings to unexpected or unusual accounts impacting revenue.
Page 11
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KERNEL EQUITYCO LIMITED (CONTINUED)
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 auditor's report.
This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditor
Chartered Accountants
14th Floor
103 Colmore Row
B3 3AG
Page 12
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 13
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
Page 14
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2025
The financial statements on pages 13 to 66 were approved and authorised for issue by the board of directors and were signed on its behalf by:
The notes on pages 23 to 66 form part of these financial statements.
Page 15
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
The Company's loss for the year was £885,859 (2024 - £829,828).
The financial statements on pages 13 to 66 were approved and authorised for issue by the board of directors and were signed on its behalf by:
Page 16