REGISTERED NUMBER: 03613529 (England and Wales)

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2025

FOR

CARMEL CLOTHING LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Statement of Comprehensive Income

12

Statement of Financial Position

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15

DIRECTORS:

C P Adshead

S L Blayne

D E Edwards

R E Elias

H Fox

D Jacobs

SECRETARY:

R E Elias

REGISTERED OFFICE:

Unit 1, 55-57 Holmes Road

London

NW5 3AN

REGISTERED NUMBER:

03613529 (England and Wales)

AUDITORS:

Melinek Fine LLP

Chartered Accountants

Statutory Auditors

First Floor, Winston House

349 Regents Park Road

London

N3 1DH

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

REVIEW OF BUSINESS

The principal activity of the company continued to be that of a global fashion design and manufacturing brand; providing a supplier solution for retailers world-wide specialising in women, men and children's fashion across all product areas including outerwear, tailoring, softs and jersey.

The statement of comprehensive income is set out on page 12 and shows the profits for the year.

During the year under review, turnover was $35,227,847 (2024:$49,555,144).

Carmel Clothing is a global design, fashion, and manufacturing brand supplying retailers around the world through a network of international offices. Working closely with customers we engineer and create products through focused design and innovative sourcing.

As a complete one-stop supplier solution we offer key fashion trends against all product divisions within ladies and children's wear areas. A strong track record and financial stability even in the most uncertain times have given our customers and suppliers confidence in aligning themselves with Carmel. We will continue to deliver the perfect supply solution to all our customers underpinned by key elements:

- Pricing and Sourcing.

- Quality and Control.

- Delivery Solutions.

- Ethics and Compliance.

- Technology Advancements.

The success of the business is based on innovative design and the strength of our long-term relationships with both our customers and our suppliers.

The company has continued to maintain strong control over cost and working capital. During the year the company continued to make use of the vendor financing scheme's offered by a couple of our larger customers.

The directors are pleased with the performance of the company under the current economic conditions. The company has continued to be active in the management of its overheads.

The Board believe the continued focus on product quality and maintaining strong relationships with customers and suppliers will allow the company to take advantage of future opportunities as they arise whilst at the same time maintaining tight control over costs with the continuing economic outlook.

The directors are optimistic about 2026, however the business remains mindful about the UK economy and beyond given the current inflationary pressures.

PRINCIPAL RISKS AND UNCERTAINTIES

Financial Risk Management

The board of directors recognise that there is a strategic risk from market disruption within the industry. The proper controls have been established and these are monitored regularly to ensure that we minimise any potential disruption to the business. This includes offering our customers short, medium, and long lead time production from a variety of production bases and diversification of product. We retain the support of our funders to support liquidity and this is supported by advanced cash flow management.

Credit Risk

The company has policies that require the appropriate credit checks on new and existing customers. This is monitored on a monthly basis. Where appropriate a credit insurance policy is put in place and again exposure is monitored formally by the CFO and CEO on a monthly basis. Limits of exposure for each customer are set and must be adhered to by the sales division.

At a local level, a monthly review of the trade receivables' ageing analysis is undertaken and customers' credit is reassessed periodically. Existing customers that become "high risk" as a result of the periodic reassessment are placed on a restricted customer list and future credit sales are made only with approval of the local management, otherwise payment in advance is required. As is increasingly common in the industry, in recent times it's becoming increasingly difficult to find insurance in the sector, at similar levels to prior years.

Foreign Currency Risk

The vast majority of the company's income and expenditure is in USD and this protects the company against currency fluctuations.

Where appropriate currency is hedged forward to again protect against any currency fluctuations.

Liquidity Risk

Liquidity risk arises from the company management of working capital. It is the risk that the company will encounter difficulty in meeting its financial obligations as they fall due.

The Board receives rolling forward projections on a monthly basis as well as information regarding cash balances. At the end of the financial year, these projections indicate that the company expect to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances.

Price Risk

Expenditure made by the company is authorised by management prior to it being made in order to ensure that goods and services are obtained at competitive prices.

SECTION 172(1) STATEMENT

Statement by the directors in performance of their statutory duties in accordance with s172 (1) Companies Act 2006.

The Directors in line with their duties under s172 of the Companies Act 2006 always act in accordance with a commitment to promote the success of the company. As part of any decision-making process: the long-term impact on key stakeholders which includes our employees in all offices, factories, suppliers, customers, regulators, and funders are fully considered. An understanding of key stakeholder's business environment, goals and challenges are essential to fully analyse the impact of any decision, and this is achieved by engaging directly and strong communication. The Directors also identify principal risks facing the business on an ongoing basis, approaching decision making underpinned by risk management and core values to ensure strong financial results are achieved.

Carmel's Board has a clear framework for managing the business and decision making. When making decisions, each Director ensures that they act in the way they consider, in good faith, that would most likely promote the Company's success.

(a) The likely consequences of any decision in the long term.

The directors understand the business and the evolving environment in which the company operates. Teams work globally to ensure all factors are considered fully, and any restructuring and system investments are designed to strengthen the company's position and longevity.

(b) The interests of the company's employees.

The directors recognise that the success of the business depends on attracting, retaining, and motivating high quality employees. The directors consider the implications of decisions which may affect their perception as a responsible employer, on determining remuneration and benefits, and on providing a healthy and safe workplace environment. The Carmel Culture is an integral part of the company's success, and this includes training, development, and promotion opportunities for all staff as well as a holistic approach to staff management providing mentoring and support as required. Promotion from within is the first choice and continues to motivate and inspire as well as making good business sense.

(c) The need to foster business relationships with suppliers, customers, and key stakeholders.

The directors seek to promote strong mutually beneficial relationships with customers, factories, suppliers, regulators, and authorities. Such general principles are critical in the delivery of the company's strategy. All directors are involved in the building of key relationships globally and this is overseen by the CEO and forms part of monthly/quarterly board updates. This includes meetings at director level with all partners on a regular basis as well as strong local relationships facilitated by the presence of Carmel Senior Managers at our international offices.

(d) The impact of the company's operations on the community and the environment.

The company is committed to understanding the interests of these stakeholder groups. The directors receive information on these topics on a periodic basis to provide relevant information for specific board decisions. We also ensure that all our global offices primarily employ local staff. This includes working with local organisations to promote ethical and sustainable trading. Carmel set up its own charity 'The Carmel Foundation' which was launched in 2019 as part of its commitment to impact the community positively.

(e) The desirability of the company maintaining a reputation for high standards of business conduct.

The directors recognise the importance of acting in ways which promote high standards of business conduct both within and outside the office. The board annually reviews and approves clear operating frameworks for conduct, and this is highlighted in a Carmel Staff.

Manual and Code of Conduct. This applies to conduct within the business and in relationship to conduct with key stakeholders of the business including factories, suppliers, and financial partners.

(f) The need to act fairly as between members of the company

The directors aim to act fairly between the company's members when delivering the company's strategy and board decisions are made at arm's length. This is reviewed when we set our annual strategy at the beginning of each year at Board Level and is overseen by the CEO and CFO on an ongoing basis.

KEY PERFORMANCE INDICATORS

The Directors believe that by continuing to focus on strong customer and supplier relationships and by continuing to put a high emphasis on design and product development, the business should be able to maintain its position within the tailoring, outerwear,jersey and soft separates markets.

The business continues to invest in IT to facilitate the focus of cutting edge design and improved working practices. In the opinion of the directors, trading volumes and profitability are key success factors, and so they consider turnover and gross profit, operating profit and shareholders funds to be the business KPIs and set out below:

Financial indicators:

2025

2024

$'000

$'000

Turnover

35,228

48,555

Gross profit

7,167

7,873

Non-financial indicators:

Average number of employees - 2025:159 2024:151

The continued efforts and support of the experienced and dedicated team of employees has ensured that the group has continued to invest in its market leading range of products.

ON BEHALF OF THE BOARD:

H Fox - Director

6 August 2026

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

PRINCIPAL ACTIVITY

The principal activity of the company and group continued to be that of a global fashion design and manufacturing brand; providing a supplier solution for retailers world-wide specialising in women, men and children's fashion across all product areas including outerwear, tailoring, softs and jersey.

Branches

Carmel's foreign branches are listed as follows:

- Carmel Clothing Limited - Vietnam Representative Office (Vietnam)

- Carmel Clothing Limited - (Liaison Office) (Sri Lanka)

- Carmel Clothing Limited - (Bangladesh)

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2025 was $580,590 (2024 - $600,000).

DIRECTORS

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

C P Adshead

S L Blayne

D E Edwards

R E Elias

H Fox

D Jacobs

Other changes in directors holding office are as follows:

D Rahimzadeh - appointed 1 January 2025 - resigned 15 July 2025

CHARITABLE DONATIONS AND EXPENDITURE

During the year, the company made total charitable donations of $29,023 (2024:$52,975)

STAKEHOLDERS’ RELATIONSHIP

The director's engagement with customers, factories, suppliers, the regulators and authorities are critical in the delivery of the company's strategy. All directors are involved in building key relationships globally and this is overseen by the CEO and forms part of monthly/quarterly board updates. See s172 statement for further detail.

FUTURE DEVELOPMENTS

Our future plans for the business will see an expansion of commodity types and production options, as well as working with new customers and new divisions within existing customers.

ENGAGEMENT WITH EMPLOYEES

Employment of disabled persons

The company is committed to a policy of recruitment and promotion on the basis of aptitude and ability without discrimination of any kind. Particular attention is given to the training and promotion of disabled employees to ensure that their career development is not unfairly restricted by their disability, or perceptions of it.

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS

COMMUNITIES AND ENVIRONMENT

We recognise that our decisions can have a wider impact on the communities we operate in, both locally and nationally, our working practices and policies consider environmental, social and economic factors in order to make a positive contribution to the community. The partners within our local businesses are involved with their local communities, whether that be through sponsorship, fundraising events and supporting local initiatives.

STATEMENT OF CORPORATE GOVERNANCE ARRANGEMENTS

Due to the nature and size of the company the directors fulfil their duties by utilising a governance framework and they delegate the day-to-day decision making to operation managers, whilst maintaining the overall control of the processes and procedures the company operates.

STREAMLINED ENERGY AND CARBON REPORTING

The Company's energy usage form part of the overall Carmel Clothing Holdings Group results, with our Streamlined Energy and Carbon Reporting ("SECR") disclosure in the Group's Annual Report.

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company'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. It has done so in respect of its financial risk management and policies.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

-	select suitable accounting policies and then apply them consistently;

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

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

The auditors, Melinek Fine LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

H Fox - Director

6 August 2026

Opinion

We have audited the financial statements of Carmel Clothing Limited (the 'company') for the year ended 31 December 2025 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2025 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

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

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

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; and via inspection of the company's regulatory and legal correspondence.

We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company's constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigation. We identified the following areas as those most likely to have such an affect: employment legislation; health and safety legislation; trade legislation; data protection legislation; anti-bribery and corruption legislation.

International Standards on Auditing (UK) limit the required procedures to identify non-compliance with these laws and regulations to the procedures, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.

In relation to fraud, we performed the following specific procedures in addition to those already noted:

-Challenging assumptions made by management in its significant accounting estimates.

-Identifying and testing journal entries during the period and post balance sheet date, in particular any entries posted with unusual nominal ledger account combinations, journal entries crediting cash or any revenue account, journal entries posted by senior management.

-Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;

-Ensuring that testing undertaken on both the performance statements and the Balance Sheet includes a number of items selected on a random basis.

These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with International Auditing Standards (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.

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

Use of our report

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

Daniel Fine (Senior Statutory Auditor)

for and on behalf of Melinek Fine LLP

Chartered Accountants

Statutory Auditors

First Floor, Winston House

349 Regents Park Road

London

N3 1DH

6 August 2026

TURNOVER

35,227,847

49,555,114

Cost of sales

28,060,259

41,681,884

GROSS PROFIT

7,167,588

7,873,230

Administrative expenses

12,845,989

13,857,860

(5,678,401

)

(5,984,630

)

Other operating income

4

6,987,160

4,459,264

OPERATING PROFIT/(LOSS)

6

1,308,759

(1,525,366

)

Interest receivable and similar income

19,684

97,486

1,328,443

(1,427,880

)

Gain/loss on revaluation of tangible assets

-

(432,672

)

1,328,443

(1,860,552

)

Interest payable and similar expenses

7

719,557

1,553,329

PROFIT/(LOSS) BEFORE TAXATION

608,886

(3,413,881

)

Tax on profit/(loss)

8

(152,545

)

-

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

761,431

(3,413,881

)

OTHER COMPREHENSIVE LOSS

Revaluation of tangible fixed assets

-

(2,541,169

)

Income tax relating to other comprehensive loss

-

-

OTHER COMPREHENSIVE LOSS FOR THE YEAR, NET OF INCOME TAX

-

(2,541,169

)

TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR

761,431

(5,955,050

)

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

399,689

9,400,478

Investments

12

942,648

942,648

1,342,337

10,343,126

CURRENT ASSETS

Stocks

13

12,838,714

14,750,298

Debtors

14

17,457,555

16,051,685

Cash at bank and in hand

641,973

779,225

30,938,242

31,581,208

CREDITORS

Amounts falling due within one year

15

18,531,252

28,171,900

NET CURRENT ASSETS

12,406,990

3,409,308

TOTAL ASSETS LESS CURRENT LIABILITIES

13,749,327

13,752,434

PROVISIONS FOR LIABILITIES

18

1,227,046

1,410,994

NET ASSETS

12,522,281

12,341,440

CAPITAL AND RESERVES

Called up share capital

19

2,729,800

2,729,800

Profit and loss account

9,792,481

9,611,640

SHAREHOLDERS' FUNDS

12,522,281

12,341,440

The financial statements were approved by the Board of Directors and authorised for issue on 6 August 2026 and were signed on its behalf by:

H Fox - Director

Called up

Profit

share

and loss

Revaluation

Total

capital

account

reserve

equity

$

$

$

$

Balance at 1 January 2024

2,729,800

13,625,521

2,541,169

18,896,490

Changes in equity

Dividends

-

(600,000

)

-

(600,000

)

Total comprehensive loss

-

(3,413,881

)

(2,541,169

)

(5,955,050

)

Balance at 31 December 2024

2,729,800

9,611,640

-

12,341,440

Changes in equity

Dividends

-

(580,590

)

-

(580,590

)

Total comprehensive income

-

761,431

-

761,431

Balance at 31 December 2025

2,729,800

9,792,481

-

12,522,281

1.	STATUTORY INFORMATION

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

The principal place of business is Unit 1, 55 - 57 Holmes Road, London NW5 3AN.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

The financial statements are prepared in U.S dollar, which is the functional currency of the company.

Monetary amounts in these financial statements are rounded to the nearest $.

Going concern

The Board of Directors have reviewed and assessed the company as a going concern both in terms of funding, performance, and forward orders.

While the current global economic climate continues to present challenges, during 2025 the company continued to maximise opportunities with existing and new customers; as well as the introduction of new divisions and product types to secure business levels going forward.

A risk management framework continues to feature at the core the company's business strategy, and this is reflected by a range of customers, suppliers, and production sources. A positive and strong presence continues in each production base, and manifests in continued support from factories throughout a successful global production base. A focus on efficiency, IT development and continued management and control of overheads ensures optimum results.

The company remains supported by its lenders and financial partners both currently and for future growth. The company is in a strong position to secure future business and maximise opportunities.

The directors are therefore confident that the company can continue as a going concern for a period of at least twelve months from the date of approval of these financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 33.7.

Preparation of consolidated financial statements

The financial statements contain information about Carmel Clothing Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 401 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Carmel Clothing Holdings Limited, Unit 1, 55-57 Holmes Road, London NW5 3AN , United Kingdom.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

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

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortises evenly over its estimated useful life.

Tangible fixed assets

Leasehold land and buildings are shown at the most recent valuation. The gain on revaluation is recognised in revaluation reserve and loss on revaluation is recognised in revaluation reserve until negative then recognised in 'profit or loss'.

Fixed asset investments

Investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

Stocks

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.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. 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

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

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.

Foreign currencies

Transactions in currencies other than U.S. dollar 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. Gains and losses as a result of a change in presentational currency are recognised in other operating income.

Operating lease commitments

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.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Employee benefits

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.

Financial instruments

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

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

Financial assets and liabilities are offset 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

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

Impairment of financial assets

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.

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities, including creditors, bank loans and loans 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.

Derecognition of financial liabilities

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

Equity instruments

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

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which has accrued at the balance sheet date and carried forward to future periods.This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the company'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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Recoverability of amounts due from group undertakings

As at 31 December 2025 there are amounts due from Group companies of $10,886,247 (2024: $6,069,832). The directors have assessed the recoverability of this balance based on the trading results and forecasts and deem that the amount is fully recoverable on the basis that the group companies are profitable.

Recoverability of other debtors

Included within other debtors is a balance of $18,923 (2024: $271,248) due to the company from companies controlled by the directors. The directors have assessed the recoverability of this balance based on the trading results and forecasts and deem that the amount is fully recoverable on the basis that the brand is in the early stages of development and the expectation that the company will become more profitable in the future.

Key sources of estimation uncertainty

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.

Stock impairment and provisions

Stocks are held at lower of cost and estimated selling price less costs to complete and sell. The company estimates the net realisable value of stock based on an assessment of expected selling prices and the ageing ot stock. Selling prices vary based on supply and demand. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions require judgements to be made, which include forecasting consumer demand, competitive and economic environment and stock loss trends.

4.	OTHER OPERATING INCOME

2025

2024

$

$

Rents received

15,304

11,134

Management Charges

6,971,856

4,448,130

6,987,160

4,459,264

Other operating income represents management fee income from group undertakings which is recognised on accruals basis and is based on cost incurred providing services to other group undertakings.

Income from operating lease is recognised on accruals basis and according to rental agreements.

5.	EMPLOYEES AND DIRECTORS

2025

2024

$

$

Wages and salaries

8,297,909

9,381,896

Social security costs

767,438

901,508

Other pension costs

65,018

57,278

9,130,365

10,340,682

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

2025

2024

Senior Management

19

18

Sales

16

13

Design, Technical and Production

114

110

Finance

10

10

159

151

Key management personnel compensation.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. The Company regards the directors as its key management personnel.

2025

2024

$

$

Directors' remuneration

2,321,714

4,705,789

Information regarding the highest paid director is as follows:

2025

2024

$

$

Emoluments etc

1,301,682

2,135,276

Included in Other pension costs is $3,276 (2024:$3,276) of employer pension contribution for the directors.

During the year retirement benefits were accruing to 2 directors (2024:2) in respect of defined contribution pension schemes.

The value of the company's contribution paid to a defined contribution pension scheme in respect of the highest paid director amounted to $Nil (2024:$Nil).

6.	OPERATING PROFIT/(LOSS)

The operating profit (2024 - operating loss) is stated after charging/(crediting):

2025

2024

$

$

Depreciation - owned assets

96,596

117,454

Loss on disposal of fixed assets

157,593

-

Foreign exchange differences

(164,973

)

188,305

Operating lease charges

260,073

148,586

Auditor's remuneration

80,000

80,000