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Registered number: 11283183 KERNEL LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
KERNEL LIMITED
COMPANY INFORMATION
Directors | L V Naidu
| D Sookramanien
Company secretary | A G Secretarial Limited
Registered number | 11283183
Registered office | 125 London Wall
| London
| EC2Y 5AS
Independent auditor | S&W Audit
| Statutory Auditor & Chartered Accountants
| 14th Floor
| 103 Colmore Row
| Birmingham
| B3 3AG
KERNEL LIMITED
CONTENTS
| Page
Strategic Report | 1
Directors' Report | 2
Directors' Responsibilities Statement | 3
Independent Auditor's Report | 4 - 7
Statement of Comprehensive Income | 8
Statement of Financial Position | 9
Statement of Changes in Equity | 10
Notes to the Financial Statements | 11 - 32
KERNEL LIMITED
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2025
Introduction
The directors present the Strategic Report for the year ended 31 December 2025.
Business and strategic review
The principal activity of the Company is that of a management company for the Group headed by Kernel Equityco Limited, through its wholly owned subsidiaries, that have trading operations in the United Kingdom, United States of America and Hong Kong. The Company generates certain items of revenue and incurs certain central expenditure costs for the Group headed by Kernel Equityco Limited. The Company has assessed its investments in the underlying subsidiary companies for impairment and deemed that no impairment is necessary.
Financial key performance indicators
The Company has made a loss for the year of £622,026 (2024 - £1,960,611).
Principal risks and uncertainties
As an intermediate holding company, the main risks relate to the future performance of the subsidiary undertakings. Further details of the risks facing those businesses is contained in the respective statutory accounts of the subsidiary undertakings. Future developments There have been no significant future developments identified since the year end, other than post balance sheet events as disclosed in note 26. This report was approved by the board and signed on its behalf.
D Sookramanien Director
Date: 30 June 2026
Page 1
KERNEL LIMITED
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.
Results and dividends
The loss for the year, after taxation, amounted to £622,026 (2024 - £1,960,611). No dividends were paid or proposed during the year (2024 - £Nil).
Directors
The directors who served during the year were:
L V Naidu
D Sookramanien
Matters covered in the Strategic Report
Where necessary, disclosures relating to future developments have been made in the Strategic Report and have not been repeated here in accordance with Section 414C of the Companies Act 2006.
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post balance sheet events
In February 2026, the Group headed by the ultimate parent company entered into new debt facilities, resulting in the drawing of a new term loan facility and the option for a revolving credit facility. Subsequently, additional fixed charges have been created by the lender, secured against the Company's assets.
Auditor
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.
D Sookramanien Director
Date: 30 June 2026
Page 2
KERNEL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2025 The directors are responsible for preparing the Strategic Report, the Directors' Report 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. 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 UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The 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 to 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. Page 3
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KERNEL LIMITED
Opinion
We have audited the financial statements of Kernel Limited (the 'Company') for the year ended 31 December 2025, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (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 loss for the year then ended; ∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and ∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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. Page 4
KERNEL LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KERNEL LIMITED (CONTINUED)
Other information
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.
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 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.
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 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, 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 Directors' Responsibilities Statement set out on page 3, 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 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. Page 5
KERNEL LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KERNEL 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 Company's legal and regulatory framework through enquiry of management concerning their understanding of the 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 Company's industry and regulation. We understand that the Company 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; and ∙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 Company's ability to conduct its business; and 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 Company: ∙The Companies Act 2006 and FRS 101 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: ∙Manipulation of the financial statements via fraudulent journal entries, particularly as the size of the Company means that there is little opportunity for segregation of duties; and ∙As the value of the Company's revenue in this period was immaterial, we rebutted the need for a related fraud risk. 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: ∙Substantive work on material areas affecting profits; ∙Testing journal entries, selecting a sample for review to ensure they had a proper business purpose. 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. Page 6
KERNEL LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF KERNEL LIMITED (CONTINUED)
Use of our report
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed. Benjamin Stapleton (Senior Statutory Auditor) for and on behalf of S&W Audit Statutory Auditor Chartered Accountants 14th Floor 103 Colmore Row Birmingham B3 3AG 30 June 2026 Page 7
KERNEL LIMITED
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2025
| 2025 | 2024
Note | £ | £
Revenue | 4 | 220,605 | 122,815
Cost of sales |  | (21,488) | -
Gross profit |  | 199,117 | 122,815
Administrative expenses |  | (4,647,017) | (2,842,443)
Exceptional items | 6 | (155,711) | (155,006)
Other income | 5 | 4,413,642 | 2,487,235
Loss from operations | 7 | (189,969) | (387,399)
Interest payable and similar expenses | 11 | (469,577) | (349,615)
Loss before tax |  | (659,546) | (737,014)
Tax expense | 12 | 37,520 | (1,223,597)
Loss for the year |  | (622,026) | (1,960,611)
There was no other comprehensive income for the year ended 31 December 2025 (2024 - £Nil).
The notes on pages 11 to 32 form part of these financial statements.
Page 8
KERNEL LIMITED REGISTERED NUMBER:11283183
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2025
| 2025 | 2024
Note | £ | £
Non-current assets |  |  |
Property, plant and equipment | 13 | 3,447,534 | 5,238,835
Investments | 14 | 5,899,375 | 5,899,375
|  | 9,346,909 | 11,138,210
Current assets |  |  |
Trade and other receivables | 15 | 4,664,703 | 1,778,843
Cash and cash equivalents |  | 136,285 | 74,318
|  | 4,800,988 | 1,853,161
Current liabilities |  |  |
Creditors: amounts falling due within one year | 16 | (5,101,831) | (1,891,641)
Net current liabilities |  | (300,843) | (38,480)
Creditors: amounts falling due after more than one year | 17 | (4,499,387) | (5,931,025)
Net assets |  | 4,546,679 | 5,168,705
Capital and reserves |  |  |
Share capital | 20 | 19,900 | 19,900
Share premium reserve | 21 | 99,335 | 99,335
Capital redemption reserve | 21 | 385 | 385
Merger reserve | 21 | 83,231 | 83,231
Retained earnings | 21 | 4,343,828 | 4,965,854
Total equity |  | 4,546,679 | 5,168,705
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
D Sookramanien
Director
Date: 30 June 2026
The notes on pages 11 to 32 form part of these financial statements. Page 9

|  | KERNEL LIMITED |
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2025
|  | Share capital | Share premium reserve | Capital redemption reserve | Merger reserve | Retained earnings | Total equity
|  | £ | £ | £ | £ | £ | £
| At 1 January 2024 | 19,900 | 99,335 | 385 | 83,231 | 6,926,465 | 7,129,316
| Loss for the year | - | - | - | - | (1,960,611) | (1,960,611)
| At 1 January 2025 | 19,900 | 99,335 | 385 | 83,231 | 4,965,854 | 5,168,705
| Loss for the year | - | - | - | - | (622,026) | (622,026)
| At 31 December 2025 | 19,900 | 99,335 | 385 | 83,231 | 4,343,828 | 4,546,679
Page 10

KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
1. | General information
Kernel Limited is a private company, limited by shares, domiciled and incorporated in England and Wales (registered number: 11283183). The registered office address is 125 London Wall, London, EC2Y 5AS. The principal activity of the Company is that of a management company for the Group headed by Kernel Equityco Limited, through its wholly owned subsidiaries, that have trading operations in the United Kingdom, United States of America and Hong Kong. The Company generates certain items of revenue and incurs certain central expenditure costs for the Group headed by Kernel Equityco Limited. 2.Accounting policies
| 2.1 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' and the Companies Act 2006. The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3). The following principal accounting policies have been applied:
| 2.2 | Financial Reporting Standard 101 - reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions under FRS 101: ∙the requirements of IFRS 7 Financial Instruments: Disclosures ∙the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of: - paragraph 79(a)(iv) of IAS 1; ∙the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements ∙the requirements of IAS 7 Statement of Cash Flows ∙the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures ∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member This information is included in the consolidated financial statements of Kernel Equityco Limited as at 31 December 2025 and these financial statements may be obtained from Companies House.
| 2.3 | Exemption from preparing consolidated financial statements
The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006. Page 11
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.4 | Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the Group headed by Kernel Equityco Limited and its subsidiaries has adequate resources to continue to support the Company and ensure operational existence for the foreseeable future. The directors have reviewed cash flow forecasts for the Group for at least the 12 month period from the date of signing to ensure the Group can maintain the Company's day-to-day services, fulfil its statutory obligations and meet future obligations to funders and other stakeholders. At 31 December 2025, the Group headed by Kernel Equityco Limited had sufficient cash balances to maintain a positive cash position and meet the Company’s liabilities as they fall due for at least 12 months from the statement of financial position date, based upon current expectations. This assumes the continued support of the parent group headed by Kernel Equityco Limited and that amounts due to group undertakings, amounting to £4,193,148 at 31 December 2025, will not be called in unless the Company has sufficient resources to make repayment. The directors' forecasts reflect an objective assessment of the impact of macroeconomic and market specific factors on the wider Group's operational performance and trading prospects. To the date of signing, sales have been materially in line with forecasts and positive cash flow has been maintained. The directors have stress tested their forecasts and sales demand would need to fall by a significant amount before cash flow becomes an issue, such that they do not believe this to be a probable outcome. The directors have considered the requirements of the Group's loan facilities and debt financing arrangements in the context of the Group's forecast cash flows, to ensure that the Group can maintain its day-to-day services and meet its obligations as they fall due. Particular consideration has been given to the new loan and debt facilities entered by the Group, as explained further in note 25 and the respective covenants in the Group's debt facilities. These have been considered within the Group's forecasts, as well as the cash required to service principal and interest repayments as they fall due. As at the time of approving the financial statements, the directors have a reasonable expectation that the Group has adequate cash balances and financial resources to meet these obligations for at least 12 months from the date of approval of the financial statements. The directors believe the Company will continue to be a going concern and have therefore prepared these financial statements on a going concern basis.. Page 12
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.5 | Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The Company's revenue is accounted for under the following policies: Revenue is recognised when consultancy advisory services are rendered to customers, with a single performance obligation satisfied at a point in time when the service is delivered. The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
| 2.6 | Foreign currency translation
Functional and presentation currency The Company's functional and presentational currency is GBP. Transactions and balances Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
| 2.7 | Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment.
| 2.8 | Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
| 2.9 | Defined contribution schemes
Contributions to defined contribution pension schemes are charged to profit or loss in the year to which they relate. Page 13
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.10 | Leases
The Company as a lessee The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. The rate of interest implicit in the Company's lease arrangements are not readily determinable and management have determined that the incremental borrowing rate to be applied in calculating the lease liability is 8.25 per cent for the UK property. Lease payments included in the measurement of the lease liability comprise: ∙fixed lease payments (including in-substance fixed payments), less any lease incentives; The lease liability is included in 'Creditors' on the Statement of Financial Position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 2.13. The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low value assets recognition exemption to leases of office equipment that are considered to be low value, being less than £1,000. Lease payments on short-term leases and leases of low-value assets are recognised as expenses on a straight-line basis over the lease term. As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient. Page 14
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued)
| 2.11 | Finance costs
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
| 2.12 | Exceptional items
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
| 2.13 | Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following range:
|  |  |  | Right-of-use assets | - | over the life of the lease
|  |  |  | Office refurbishment | - | 33% straight-line
|  |  |  | Computer equipment | - | 33% straight-line
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
| 2.14 | Financial instruments
Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Page 15
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued) Financial instruments (continued) Financial assets All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. Financial liabilities All financial liabilities are subsequently measured at amortised cost using the effective interest method or at fair value through profit or loss (FVTPL). However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below. Financial liabilities at FVTPL Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration of an acquirer in a business combination to which IFRS 3 applies, (ii) held for trading, or (iii) it is designated as at FVTPL. A financial liability is classified as held for trading if: ∙it has been incurred principally for the purpose of repurchasing it in the near term; ∙on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or ∙it is a derivative, except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument. A financial liability other than a financial liability held for trading or contingent consideration of an acquirer in a business combination may be designated as at FVTPL upon initial recognition if: ∙such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise: or ∙the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis: or Page 16
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued) Financial instruments (continued) ∙it forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at FVTPL. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss to the extent that they are not part of a designated hedging relationship. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the 'fair value gains/losses' line item. However, for financial liabilities that are designated as at FVTPL the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of changes in the liability's credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. The remaining amount of change in the fair value of the liability is recognised in profit or loss. Changes in fair value attributable to a financial liability's credit risk that are recognised in other comprehensive income are not subsequently reclassified to profit or loss: instead, they are transferred to retained earnings upon derecognition of the financial liability. Gains or losses on financial guarantee contracts and loan commitments issued by the Group that are designated by the Group as at FVTPL are recognised in profit or loss. Financial liabilities subsequently measured at amortised cost Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held for trading, or (ii) designated as at FVTPL, are subsequently measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability or (where appropriate) a shorter period to the amortised cost of a financial liability. Foreign exchange gains and losses For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the 'finance income' or 'finance expense' line item, for gains and losses respectively, in profit or loss for financial liabilities that are not part of a designated hedging relationship. The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities that are not part of a designated hedging relationship. Page 17
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued) Financial instruments (continued) Derecognition of financial liabilities The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
| 2.15 | Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. (i) Current tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the Statement of Comprehensive Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. (ii) Deferred tax Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Page 18
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 2.Accounting policies (continued) Taxation (continued) (iii) Current and deferred tax for the year Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
3. | Judgements in applying accounting policies and key sources of estimation uncertainty
In the application of the Company's accounting policies, the directors (or management) 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The directors consider that the following judgements and key sources of estimation uncertainty have had the most significant effect on amounts recognised in the financial statements: Recoverability of intra-group loans The Company has provided loans to its subsidiary companies which are repayable on demand. Loans are impaired to their recoverable value should the counterparty not have sufficient resources to repay the loan on demand after taking all possible steps including the sale of trade and assets. Impairment of fixed asset investments Where indicators of impairment of fixed asset investments are present, the Company prepares a discounted cashflow forecast to assess the recoverable amount of investments by reference to their value in use, in order to determine whether an impairment loss is required. The recoverable amount is determined by discounting estimated future cashflows at a rate equal to the Company's average weighted cost of capital, and this is then compared to the carrying value of investments in subsidiaries. Page 19
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
4. | Revenue
| An analysis of revenue by class of business is as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Consultancy advisory services | 220,605 | 122,815
Analysis of revenue by country of destination:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| United Kingdom | 220,605 | 122,815
5. | Other income
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Recharges to group undertakings | 4,413,642 | 2,487,235
Page 20
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
6. | Exceptional items
|  | 2025 | 2024
|  | £ | £
| Impairment of amounts owed by group undertakings | - | 155,006
| Exceptional deferred remuneration | 8,750 | -
| Exceptional group headcount restructuring costs | 146,961 | -
| Impairment of amounts owed by group undertakings The impairment recognised in the prior financial year relates to the amount owed by Dartmouth Executive Search GmbH to the Company. The directors of the group headed up by Kernel Equityco Limited performed a strategic review in the prior year and determined that trading in Dartmouth Executive Search GmbH was to be ceased. As a result, the balance owed to the Company was determined to be impaired in full. Exceptional deferred remuneration The debit to profit or loss in the year represents the difference between previously accrued costs in respect of remuneration due to employees of the Company arising from the Kernel Limited sale transaction completed in the 2023 financial year and the actual subsequent settlement of these obligations during the year ended 31 December 2025 and 2024. Headcount restructuring costs These costs relate to restructuring of headcount within the year, which started within the 2023 financial year, including redundancy costs and payments in lieu of notice.
7. | Operating loss
| The operating profit/(loss) is stated after charging/(crediting):
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Depreciation of tangible fixed assets | 510,793 | 383,095
| Foreign exchange losses | 2,058 | 63
Page 21
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
8. | Auditors' remuneration
| The auditors' remuneration was borne by another group company.
| The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent company.
9. | Employee benefit expenses
| Staff costs, including directors' remuneration, were as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Wages and salaries | 2,215,880 | 1,697,382
| Social security costs | 299,617 | 204,456
| Cost of defined contribution scheme | 40,996 | 25,884
|  | 2,556,493 | 1,927,722
| The average monthly number of employees, including the directors, during the year was as follows:
|  |  | 2025 | 2024
|  |  | No. | No.
|  | Administrative staff | 21 | 20
|  | Directors | 2 | 2
|  |  | 23 | 22
Page 22
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
10. | Directors' remuneration
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Directors' emoluments | 500,063 | 375,837
| Company contributions to defined contribution pension schemes | 3,668 | 3,081
|  | 503,731 | 378,918
| During the year retirement benefits were accruing to 2 directors (2024 - 2) in respect of defined contribution pension schemes.
| The highest paid director received remuneration of £290,159 (2024 - £248,793).
| The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £1,760 (2024 - £1,760).
11. | Interest payable and similar expenses
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Interest on lease liabilities | 469,577 | 349,615
12. | Tax expense
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Current tax on profits for the year | - | -
| Total current tax | - | -
| Deferred tax expense/(income) |  |
| Origination and reversal of timing differences | 870,537 | 1,223,597
| Adjustments in respect of prior periods | (908,057) | -
| Total deferred tax expense/(income) | (37,520) | 1,223,597
| Total tax expense |  |
| Tax expense/(income) | (37,520) | 1,223,597
Page 23
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025 12.Tax expense (continued)
| Income tax recognised in profit or loss
| The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Loss on ordinary activities before tax | (659,546) | (737,014)
| Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%) | (164,886) | (184,254)
| Expenses not deductible for tax purposes | 123,428 | 137,439
| Adjustments to tax charge in respect of previous periods | (908,057) | 319,078
| Group relief surrendered | 911,995 | 951,334
| Total tax expense/(income) | (37,520) | 1,223,597
| Changes in tax rates and factors affecting the future tax charges
There were no factors that may affect future tax charges. Page 24
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
13. | Property, plant and equipment
|  | Right-of-use assets | Computer equipment | Office refurbishment | Total
|  | £ | £ | £ | £
| Cost or valuation |  |  |  |
| At 1 January 2025 | 5,618,726 | 3,204 | - | 5,621,930
| Additions | - | 45,728 | 2,766 | 48,494
| Remeasurement adjustment | (1,329,002) | - | - | (1,329,002)
| At 31 December 2025 | 4,289,724 | 48,932 | 2,766 | 4,341,422
| Accumulated depreciation |  |  |  |
| At 1 January 2025 | 383,095 | - | - | 383,095
| Charge for the year on leased assets | 510,793 | - | - | 510,793
| At 31 December 2025 | 893,888 | - | - | 893,888
| Net book value |  |  |  |
| At 31 December 2025 | 3,395,836 | 48,932 | 2,766 | 3,447,534
| At 31 December 2024 | 5,235,631 | 3,204 | - | 5,238,835
| The Company's lease arrangements are in relation to one property in the United Kingdom. This lease has a termination date in 2035, with a termination option in 2030, which the directors do not expect to exercise. The remeasurement adjustment in the year reflects a change in the expected future minimum lease payments to be paid across the lease term, based on the contractual terms of the lease arrangement. The rate of interest implicit in the Company's lease arrangements is not readily determinable and management have determined that the incremental borrowing rate to be applied in calculating the lease liability for this property is 8.25%. The fair value of the Company's lease obligations are considered to be approximately equal to their carrying amount.
Page 25
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
14. | Fixed asset investments
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Investments in subsidiary companies | 5,899,375 | 5,899,375
| Subsidiaries
| The following were subsidiary undertakings of the Company:
| Name of subsidiary | Registered office | Principal activity | Class of shares | Holding
| 1) Granite Midco Limited* | 125 London Wall. London, EC2Y 5AS | Holding company | Ordinary | 100%
| 2) Granite Bidco Limited** | 125 London Wall. London, EC2Y 5AS | Holding company | Ordinary | 100%
| 3) Granite Trustee No 1 Limited* | 125 London Wall. London, EC2Y 5AS | Employee benefit trust | Ordinary | 100%
| 4) Dartmouth Partners Ltd** | 125 London Wall. London, EC2Y 5AS | Recruitment services | Ordinary | 100%
| 5) Dartmouth Executive Search GmbH** | Taunusanlage 8, 60329 Frankfurt am Main | Recruitment services | Ordinary | 100%
| 6) Dartmouth Partners SARL** | 43-47 avenue de la Grande Armée. 75116 Paris | Recruitment services | Ordinary | 100%
| 7) Catalyst Partners Global Limited** | 125 London Wall. London, EC2Y 5AS | Recruitment services | Ordinary | 100%
| 8) Dartmouth Partners Inc** | CT Corporation Systems, Corporation Trust Center 1209 Orange St. Wilmington, DE 19801 | Recruitment services | Ordinary | 100%
| 9) Pure Recruitment Group Limited** | 125 London Wall. London, EC2Y 5AS | Recruitment services | Ordinary | 100%
| 10) Pure Search International Limited** | Level 76, The Center, 99 Queen's Road Central, Hong Kong | Recruitment services | Ordinary | 100%
| 11) Pure Search International Pte** | 77 Robinson Road, #16-00. Robinson 77, Singapore 068896 | Recruitment services | Ordinary | 100%
Page 26
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
| Subsidiaries (continued)
| Name of subsidiary | Registered office | Principal activity | Class of shares | Holding
| 12) Pure Search International Limited** | CT Corporation Systems, Corporation Trust Center 1209 Orange St. Wilmington, DE 19801 | Recruitment services | Ordinary | 100%
| 13) Pure Search Germany GmbH** | Taunusanlage 8, 60329 Frankfurt am Main | Recruitment services | Ordinary | 100%
| 14) Dartmouth Partners Hong Kong Limited** | Level 76, The Center, 99 Queen's Road Central, Hong Kong | Recruitment services | Ordinary | 100%
| 15) Catalyst Partners Inc** | CT Corporation Systems, Corporation Trust Center 1209 Orange St. Wilmington, DE 19801 | Recruitment services | Ordinary | 100%
| 16) Luminate Partners Limited** | 125 London Wall. London, EC2Y 5AS | Recruitment services | Ordinary | 100%
| 17) Yale Consulting Group Limited** | 125 London Wall. London, EC2Y 5AS | Recruitment services | Ordinary | 100%
During the year ended 31 December 2025, the Group incorporated two newly formed subsidiary undertakings, Luminate Partners Limited and Yale Consulting Group Limited. These subsidiaries are indirectly held by the Company. * Directly held ** Indirectly held Page 27
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
15. | Trade and other receivables
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Trade receivables | 56,824 | 48,500
| Amounts owed by group undertakings | 3,957,590 | 1,596,600
| Other receivables | 239,169 | 84,415
| Prepayments and accrued income | 369,260 | 44,988
| Deferred taxation | 41,860 | 4,340
| Total current trade and other receivables | 4,664,703 | 1,778,843
| Amounts owed by group undertakings are interest free, repayable on demand and due within one year.
16. | Creditors: Amounts falling due within one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Trade payables | 60,319 | 38,348
| Amounts owed to group undertakings | 4,193,148 | 1,509,680
| Other payables - tax and social security payments | 59,760 | 51,389
| Lease liabilities (see note 18) | 102,636 | 37,316
| Other payables | 17,724 | 5,746
| Accruals | 668,244 | 249,162
| Total creditors falling due within one year | 5,101,831 | 1,891,641
| Amounts owed to group undertakings are interest free, repayable on demand and due within one year. Fixed and floating charges are secured over the Company's assets in relation to secured debt held by a fellow group undertaking in the group headed by Kernel Equityco Limited, the ultimate parent undertaking.
17. | Creditors: Amounts falling due after more than one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Lease liabilities (see note 18) | 4,499,387 | 5,931,025
Page 28
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
18. | Leases
| Company as a lessee
| Lease liabilities are due as follows:
|  |  |  | 2025 | 2024
|  |  |  | £ | £
| Not later than one year | 102,636 | 37,316
| Between one year and five years | 1,941,297 | 2,977,416
| Later than five years | 2,558,090 | 2,953,609
|  | 4,602,023 | 5,968,341
| Contractual undiscounted cash flows are due as follows:
|  |  |  | 2025 | 2024
|  |  |  | £ | £
| Not later than one year | 473,342 | 518,769
| Between one year and five years | 3,495,448 | 4,049,862
| Later than five years | 2,621,586 | 4,368,390
|  | 6,590,376 | 8,937,021
| The following amounts in respect of leases, where the Company is a lessee, have been recognised in profit or loss:
|  |  |  | 2025 | 2024
|  |  |  | £ | £
| Interest expense on lease liabilities | 469,577 | 349,615
Page 29
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
19. | Deferred taxation
|  | 2025 | 2024
|  | £ | £
| At beginning of year | 4,340 | 1,227,937
| (Charged)/credited to profit or loss | 37,520 | (1,223,597)
| At end of year | 41,860 | 4,340
| The deferred tax asset is made up as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Accelerated capital allowances | - | 4,340
| Fixed asset timing differences | (12,233) | -
| Short term timing differences | 4,431 | -
| Unused losses | 49,662 | -
|  | 41,860 | 4,340
20. | Share capital
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
|  | Authorised, allotted, called up and fully paid |  |
|  | 6,980,206 Ordinary A shares of £0.001 each | 6,980 | 6,980
|  | 8,471,509 Ordinary B shares of £0.001 each | 8,472 | 8,472
|  | 776,373 Ordinary C shares of £0.001 each | 776 | 776
|  | 3,672,233 Ordinary D shares of £0.001 each | 3,672 | 3,672
|  |  | 19,900 | 19,900
| All shares rank pari passu in all respects, with the exception of the D shares. These have the exception of having restricted votes.
Page 30
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
21. | Reserves
Share premium account The share premium account is used to record the aggregate amount or value of premiums paid when the Company's shares are issued at an amount in excess of nominal value. Capital redemption reserve This reserve records the nominal value of shares repurchased by the Company. Merger Reserve This reserve relates to the cumulative amounts charged in obtaining merger relief during transactions. Retained earnings This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.
22. | Share-based payments
| Awards are granted to key individuals employed in the Group headed by Kernel Equityco Limited, which are to be settled in equity on vesting. These options vest in a change in ownership, and the number of awards exerciseable is dependent on various performance conditions being achieved or not achieved by employees. No share based payment charge has been recorded in the year ended 31 December 2025 on the grounds that this is immaterial to the financial statements.
|  | Weighted average exercise price 2025 | Number 2025 | Weighted average exercise price 2024 | Number 2024
| Granted during the year | 0.01 | 3,945 | - | -
| Forfeited during the year | 0.01 | (550) | - | -
| Outstanding at the end of the year | - | 3,395 | - | -
Page 31
KERNEL LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025
23. | Pension commitments
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £40,996 (2024 - £25,884). Contributions totalling £17,724 (2024 - £5,745) were payable to the fund at the statement of financial position date and are included in other creditors.
24. | Related party transactions
| The Company has taken advantage of the exemption within FRS 101 to not disclose transactions with wholly owned group entities. Within the financial year, £50,000 (2024 - £25,000) of expenses were incurred from Three Hills Capital Partners, a minority shareholder of the ultimate parent undertaking, for services of the directors provided to the Group. There were no balances outstanding at the year end.
25. | Subsequent events
In February 2026, the Group headed by the ultimate parent company entered into new debt facilities, resulting in the drawing of a new term loan facility and the option for a revolving credit facility. Subsequently, additional fixed charges have been created by the lender, secured against the Company's assets.
26. | Controlling party
The Company's immediate parent undertaking is Kernel Bidco Limited, a company registered in England and Wales. The ultimate parent undertaking of the Company is Kernel Equityco Limited, a company incorporated in England and Wales. The largest and smallest group of undertakings for which group accounts for the year ending 31 December 2025 have been drawn up, is that headed by Kernel Equityco Limited. The registered office address of Kernel Equityco Limited is 125 London Wall, London, EC2Y 5AS. Copies of the group accounts are available from Companies House. The ultimate controlling party is L V Naidu by virtue of his shareholding in the ultimate parent undertaking.
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