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

The 2025 turnover was £21.0m (2024: £21.6m) a decrease of 2.9% in comparison with 2024. The group has seen an increase in operating profit from £2.2m in 2024 to £2.4m in 2025, as gross profit margins have improved slightly.

The group balance sheet shows a satisfactory position at the year end with a total group equity amounting to £18,971,240 (2024: £17,982,131). Main movements on the balance sheet include:

• Pension surplus of £378,000 (2024: liability of £709,000), arising as a result of a significant pension buy-in during the year.

• Cash and short term cash deposits £8,382,854 (2024: £8,903,443) has reduced slightly.

• Stock £7,191,697 (2024: £7,064,628) has remained consistent.

• Trade debtors £4,423,845 (2024: £4,324,693).

• Trade creditors £537,653 (2024: £367,015).

The principal financial risks to which the group is exposed are those of raw material pricing, foreign currency, reliability of the supply chain and differing trading relationships with the EU. Each of these risks is managed in accordance with Board approved policies.

Financial Risks and Uncertainties

The essential risks associated with the group's cash, trade receivables and trade payables (financial instruments) are currency and credit. The board agrees and reviews policies for the prudent management of these risks as follows:

Currency Risk

The group's foreign turnover is mainly in Europe (20%) and conducted in Euros. Input costs for some key materials are also in Euros and hence the transaction risk is limited. Other significant input costs are in US dollars which are subject to currency market fluctuations. Some of this risk is mitigated by buying forward currency contracts. Variances affecting operational activities in this regard are reflected in operating costs or in the cost of sales in the profit and loss account in the years in which they arise.

Credit Risk

The group has no significant concentration of credit risk. Customers who wish to trade on credit terms are subject to a strict verification procedure in advance of credit being awarded and subsequently credit limits are continually monitored.

Reliability of Supply Chain

The risk is the potential disruption of supply due to socio economic global events which are mitigated by having multiple suppliers and dual sourcing whenever possible and closer management and relationships with suppliers.

Trading Relationship with the EU

An ongoing risk facing the group is the trading relationship with the EU and the impact of continually changing administration and longer timescales on trade with customers and suppliers in Europe. This is partly mitigated by closer relationships with our suppliers and freight companies.

The group has established key performance indicators to measure the progress of the group in achieving both its business objectives and strategy. The Board reviews these against performance at planned meetings throughout the year.

The principal performance measures are turnover, gross margin and cash generation as noted above.

Turnover has decreased to £20,964,728 (2024: £21,594,789).

The gross profit margin has increased to 47.8% (2024: 45.7%).

The decrease in cash and cash equivalents in the year is £520,589 (2024: £930,515 decrease).

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

The principal activity of the group and company during the year under review was the manufacture and distribution of tools, security and hardware products.

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £750,000. The directors do not recommend payment of a further dividend.

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

Future developments in the business of the group are to continue to grow our turnover organically and invest in complementary acquisitions.

The auditor, JS. Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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

United Kingdom company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the group and parent company 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 group and parent company, and of the profit or loss of the group 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 United Kingdom 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 group and parent company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent 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 group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The truegroup has chosen in accordance with Companies Act 2006, s.414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

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 auditor of the company 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 auditor of the company is aware of that information.

A contribution of £1,830,000 (2024: £1,000,000) was made, to insure all previously uninsured members of the scheme, which has been treated as a change in investment strategy. The insured asset is matched to the obligation. The surplus has been deemed to be recoverable and has been recognised as an asset. The change of strategy has been implemented in view of a buy-out in the near future. Additional contributions may be required after the data validation period.

We have audited the financial statements of Carl Kammerling International Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 group's and the parent company's affairs as at 31 December 2025 and of the group's 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 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.

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 group's 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.

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 directors are 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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company 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.

As explained more fully in the directors' responsibilities statement included within the Directors' Report, 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 is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent 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 parent company or to cease operations, or have 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.

Irregularities and fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities including fraud is detailed below.

Based on our understanding of the group and sector, we identified that the principal risks of non-compliance with laws and regulations related to, but were not limited to, the Companies Act 2006, UK tax, employment, pension and health and safety legislation and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to management bias in accounting estimates and judgements and the risk of fraudulent revenue recognition.

Our procedures to respond to risks identified included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

• enquiring of management about actual and potential litigation and claims, their policies and procedures to prevent and detect fraud as well as whether they have knowledge of any actual, suspected or alleged fraud;

• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

• reading minutes of meetings of those charged with governance;

• obtaining an understanding of provisions and holding discussions with management to understand the basis of recognition or non-recognition of tax provisions; and

• in addressing the risk of fraud through management override of controls: testing the appropriateness of journal entries; assessing whether the accounting estimates, judgements and decisions made by management are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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 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.

As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,832,227 (2024 - £1,769,625 profit).

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

Carl Kammerling International Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is CK House, Glan Y Don Industrial Estate, Pwllheli, Gwynedd, LL53 5LH.

The group consists of Carl Kammerling International Limited and all of its subsidiaries.

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 with the exception of foreign currency forward exchange contracts which are held at fair value. The principal accounting policies adopted are set out below.

The 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 for parent company information presented within the consolidated financial statements:

• 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries are accounted for at cost less impairment.

The consolidated group financial statements consist of the financial statements of the parent company Carl Kammerling International Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Investments in joint ventures are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

If the group’s share of losses in a joint venture equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

Unrealised gains arising from transactions with joint ventures are eliminated to the extent of the group’s interest in the entity.

The results of overseas subsidiaries are translated at the monthly average rate of exchange during the period and their balance sheets at the rates ruling at the reporting date. Exchange differences arising on translation of the opening net assets and on foreign currency borrowings are reported in the statement of comprehensive income.

The directors have forecast that the group and company will continue to trade profitably for a period of more than 12 months following the date of approving the financial statements. The forecasts up to 30 June 2027 take into account transactions that are anticipated to take place in the foreseeable future and indicate that no additional financial resources will be required should the trading performance differ from forecast.

The directors have considered the impact of the on-going cost of living / inflationary pressures, and the effects of the wars in Ukraine and Iran, including the impact on the business currently and the expected impact on the business in the future. These have resulted in some supply chain disruptions and the directors feel that the business is well placed to continue in operation and meet its liabilities as they fall due, owing to the strong cash, short term cash deposits and investments position of £8,382,854 (2024: £8,903,443) and net asset position at the year end of £18,971,240 (2024: £17,982,131).

On this basis the directors concluded that adopting the going concern basis of accounting in preparing the annual financial statements is appropriate.

Turnover represents net invoiced sales of goods net of rebates and settlements, excluding value added tax. Turnover is recognised on date of despatch of the goods when the risks and rewards are deemed to transfer to the customer.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life which is between 3 and 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

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:

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

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 group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and 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, cash and bank balances and short term bank deposits held as investments, 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, 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 group 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 group 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.

Derivatives, including 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.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group 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 group.

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 group’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.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

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 cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. The fair value of the plan assets includes an insurance policy arising from a buy-in arrangement, the value of which is considered to be equal to the present value of the related defined benefit obligation. Any remaining asset comprises cash held within the scheme and will be utilised through its application towards costs associated with a future buy-out. Surplus cash is only recognised as an asset where the Company can recover that cash through a refund or a reduction in contributions.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

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.

Short term cash deposits

Short term cash deposits are fixed-term investments held with financial institutions that have a fixed maturity date and typically earn a fixed rate of interest over the investment term. These deposits are not considered cash equivalents unless they have an original maturity of three months or less and are readily convertible to known amounts of cash with insignificant risk of changes in value.

In the application of the group’s accounting policies, the directors are 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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Loans to subsidiaries and associates are impaired to the value of their net assets, where the loan value is above the value of their net assets and is reviewed annually by the directors.

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

The present value of the defined benefit asset depends on a number of factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost or income for pensions include the discount rate. Any changes in these assumptions, which are disclosed in note 24, will impact the carrying amount of the pension asset.

The assets in respect of the Scheme at 31 December 2025 have been calculated using the “projected unit method” and by rolling forward the results of the 31 December 2024 accounting disclosures (themselves rolled forward from the 30 June 2023 Technical Provisions results) using actuarial techniques, allowing for cash flows and interest over the period, the purchase of annuities over the period, and differences between the assumptions used to set the Technical Provisions and those selected for accounting under FRS102.

The provision is computed on a line by line basis to reduce the value of stock held where there is more than thirty six months of estimated future sales held in stock.

The net present value of the loan issued to the joint venture depends on the choice of discount rate and expected maturity date of the loan.

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

Their aggregate remuneration comprised:

In addition to the above costs, an amount of £387,000 (2024: £178,000) was charged to income and expenditure in relation to the defined benefit pension scheme.

The number of directors for whom retirement benefits are accruing amounted to 3 (2024: 3).

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

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

Deferred tax balances at the year end have been measured at 25% which is the rate that the deferred tax balances are expected to crystallise. The effective rate of corporation tax during the year was 25% (2024: 25%).

During the year, the Company acquired a 40% interest in GCK Werkzeugfabrik GmbH, which has been accounted for as a joint venture in accordance with FRS 102. In the Group, the investment is initially recognised at cost and subsequently measured using the equity method.

In the Company, the investment in GCK Werkzeugfabrik GmbH is measured at cost less impairment.

Details of the company's subsidiaries at 31 December 2025 are as follows:

Registered office addresses (all UK unless otherwise indicated):

The UK subsidiary company, Nerrad Limited (company number 06475810), has taken the exemption in section 479A of the Companies Act 2006 (the Act) from the requirement in the Act for their individual accounts to be audited.

In order for the subsidiary company to take the audit exemption in section 479A of the Act, Carl Kammerling International Limited has guaranteed all outstanding liabilities of the subsidiary at 31 December 2025 until those liabilities are satisfied in full.

Details of joint ventures at 31 December 2025 are as follows:

Foreign exchange forward contracts

The Group uses foreign currency contracts to manage the foreign exchange risk of future transactions and cash flows.

The contracts are valued based on available market data. The group does not adopt hedge accounting for forward exchange contracts, consequently, fair value gains and losses are recognised in profit and loss.

At the year end, outstanding foreign exchange contracts that the group has committed to are as follows: US Dollars $585,000 (2024: $450,000).

Finished goods with a carrying value of £6,850,153 (2024: £6,805,557) includes a provision for slow moving stock of £607,249 (2024: £551,513).

Trade debtors are stated after impairment loss of £23,000 (2024: £78,800). Amounts owed by Nerrad Limited are interest free, König Werkzeugfabrik GmbH has statutory interest charged at £3,933 (2024: £4,542). Both loans are repayable on demand. Amounts owed by group are stated after an impairment loss reversal of £nil (2024: £160,000). The remaining impairment loss at the year end was £nil (2024: £nil).

The following are the major deferred tax liabilities and assets recognised by the group and company:

The provision for deferred tax liability consists of the tax effect of timing differences in respect of accelerated capital allowances. The deferred tax asset is in relation to the deferred tax charged on the defined benefit pension scheme. The deferred tax liability is expected to reverse in the foreseeable future.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

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

The liabilities in respect of the Scheme at 31 December 2025 have been calculated using the “projected unit method” and by rolling forward the initial results of the 30 June 2023 Technical Provisions using actuarial techniques, allowing for cashflows and interest over the period, and differences between the assumptions used to set the Technical Provisions and those selected for accounting under FRS102.

Assumed life expectations on retirement at age 65:

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

The actual return on plan assets was £417,000 (2024 - £347,000).

The pension valuation included above reflects the current experience of CPI, which is seen as a current experience item included in actuarial gains/losses in the statement of comprehensive income and does not impact on the rate of CPI disclosed within actuarial assumptions as that is the long-term rate.

The scheme has not yet implemented GMP equalisation and therefore the allowance made to approximately allow for the impact of GMP equalisation in the 31 December 2024 accounting disclosures has been maintained when preparing the 31 December 2025 accounting disclosures (i.e. a 1.8% uplift to the scheme's total liabilities).

In June 2023, the High Court judged that amendments made to the Virgin Media scheme were invalid because the necessary section 37 certification associated to these historic amendments was not prepared or documented appropriately. The case was subsequently reviewed by the Court of Appeal in July 2024 which upheld the High Court’s decision.

In June 2025 the Department for Work and Pensions (“DWP”) confirmed that the Government will introduce legislation to give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards. Further detail on the approach and process for this retrospective confirmation is expected to follow in due course. The High Court’s decision has wide ranging implications, affecting other schemes that were contracted-out on a salary-related basis and made amendments between April 1997 and April 2016. Historic scheme amendments without the appropriate certification might now be considered invalid, leading to additional, unforeseen liabilities. The ruling could have implications for the Company. The detailed investigation into historic Scheme amendments remains ongoing and is at an early stage. Therefore the amount of any potential impact on the DBO cannot be confirmed and / or measured with sufficient reliability at the 2025 year end.

Expected long term rate of return

The long-term expected return on cash is determined by reference to the long term view of bank base rates at the balance sheet dates.

The company's ordinary shares, which carry no right to fixed income, each carry the right to one vote at the general meetings of the company.

Profit and loss reserves are cumulative profit and loss net of distribution to owners.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Amounts contracted for but not provided in the financial statements:

Carl Kammerling GmbH & Co K.G.

Carl Kammerling GmbH & Co K.G. is a related party due to common control by certain directors.

During the year Carl Kammerling GmbH & Co K.G. provided customer relationship services to Carl Kammerling International Limited amounting to £675,683 (2024: £920,705). As at 31 December 2025 Carl Kammerling International Limited owed £91,413 (2024: £68,841) to Carl Kammerling GmbH & Co K.G. which is included within Trade Creditors.

Small Self Administered Pension Scheme

The pension scheme is a related party due to common control by certain directors. The pension scheme charged the company £55,612 (2024: £54,700) for rental of property during the year and the company paid professional fees amounting to £12,936 (2024: £10,275) on behalf of the pension scheme.

GCK Werkzeugfabrik GmbH

GCK Werkzeugfabrik GmbH is the 40% owned joint venture set up in the year. During the GCK Werkzeugfabrik GmbH provided tools to Carl Kammerling International Limited amounting to £60,406 (2024: £0). As at 31 December 2025 Carl Kammerling International Limited owed £734 (2024: £0) to GCK Werkzeugfabrik GmbH which is included within Trade Creditors.

Controlling party

The ultimate controlling party is the estate of Mr A H C G Kammerling following his demise in January 2024.

Dividends totalling £697,500 (2024: £697,500) were paid in the year in respect of shares held by the company directors who were still in post at the year end.