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

Walkers Chocolates Limited is a Birmingham based, independent family chocolate maker since 1963, supplying filled chocolates, truffles, bars, Easter eggs and other chocolate confectionery. The company supplies most superstores, discount stores and other wholesalers.

The company has diverisfied its turnover in 2025 as the benefits of range rationalisation, investments in new sectors and margin development took full affect. Profit margins in previous years have been put under considerable pressure as we have seen sharp rises in energy prices, labour rates and raw materials. This remained a continued challenge specifically with raw materials through 2025, however the company implemented a range of a cost cutting measurers in order to increase efficiencies in production, which has led to an increase to gross profit margins of 8.4%. Strategies are in place to continue this growth in turnover and to maintain the improved profit margins, as we continue to rationalise the product portfolio, and customer sectors; working with our long-term customer base as we navigate the new market conditions.

The Management team has seen several changes and additions throughout 2025, strengthening core areas of the business and focusing on efficiencies, sourcing and sales growth. This investment has allowed the business to execute on its strategic plan.

The company entered the year with a strong balance sheet and the directors and wider management team acted quickly to reduce costs and trigger pass through pricing to offset rising raw material rises. There is an £9m loan facility in place, with £7.8m drawn down at the year end.

During 2024, the exclusive contract to manufacture products for one of the industry's fastest growing chocolate brands commenced. This has given us a committed volume of production for a minimum of 2 years, providing a degree of stability for our sales levels. This contract increased our market confidence and helped the company win the tender to introduce a significant branded business to the market in Q4 of 2024. Both of these contracts have contributed to the increased profitability and should see the company generate further profits in future periods. The exclusive contract has been successfully extended to 2028, which further demonstrates the company's successful transition to quality chocolate manufacture and there are several top tier brands in the pipeline with both distribution and manufacture contracts expected for 2026/27. The company is buildings its reputation for service, quality and delivery in the market place and has several new and exciting opportunities for significant growth and expansion.

As a result of the significant net profit made in 2025, the company has significant net current assets of £4.4m (2024: £3.4m) and overall net assets of £1.9m (2024: £0.9m). The directors are confident that post year end the company will continue to generate significant profits. This demonstrates the strengthening financial positon of the company, with liquid funds available to fund they necessary investment in new customers, product line and growth, as required.

Principal risks and uncertainties

The company uses various financial instruments such as related party loans, hire purchase, plus various other items, such as debtors and creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the company’s operations.

The existence of these financial instruments exposes the company to a number of financial risks, which are described in more detail below. The directors review and agree policies for managing these risks. These policies have remained unchanged from previous years. The company does not use derivative financial instruments for speculative purposes.

Interest rate risk

The company's exposure to interest rate fluctuations on its borrowings is managed by the use of both fixed and floating facilities.

The company has tangible fixed assets on hire purchase attracting interest. These interest payments are fixed and the risk of fluctuations in interest rates are therefore low.

The company has use of a flexible loan facility of up to £9,000,000 from a related party, this loan is interest free, reducing the interest rate risk the company is exposed to. The balance drawn down on this facility is discounted each year in accordance with the correct accounting treatment per FRS102.

The board feel that the company has taken appropriate measures to mitigate the risk of interest rate fluctuations to within tolerable parameters.

Price risk

The company is exposed to commodity price risk as a result of its operations. Prices are monitored throughout the year and prices are secured on contractual volumes where appropriate to reduce the risk of exposure to the company.

Liquidity risk

The company seeks to manage financial risk by ensuring liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The directors regularly monitors the cash flow projections of the company in order to ensure that it has sufficient available funds for its continuing operations. Short term flexibility is achieved by the use of the £9,000,000 flexible loan facility provided by a related party.

Credit risk

The principal credit risk arises from the company's trade debtors.

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis to ensure that suitable payment arrangements are made with customers and that debt risk is monitored.

Provision is made for doubtful debts where necessary. With the use of credit insurance, strong credit control and based on the customer portfolio, the directors are satisfied the bad debt risk is minimised.

Foreign currency risk

Foreign currency risk is managed through the regular monitoring of risk policies and systems. The director is satisfied that these risks have been adequately managed through the year.

Concentration risk

The company is in constant contact with markets, and ensures all new opportunities are explored. The diversity of the company's confectionery products and customers ensure there is no reliance on any one particular product or customer.

Key performance indicators ('KPI's) are monitored on a regular basis by the directors and senior management team.

The KPI's used by the company to monitor its overall financial performance and position can be summarised as follows:

The directors are satisfied with the reported turnover for 2025, achieved from both new and existing customers, despite challenging trading conditions.

During 2024/25 several significant contracts commenced and as such 2025 required periods of investment in order to secure long-term commercial relationships and ensure manufacturing efficiency. As a result, the volumes achieved in 2025 were marginally lower than 2024, however, the investments made will benefit future years and post year end sales growth has and continues to be achieved.

The investment made into new confectionary markets will enable the company to secure additional income streams, particularly given the new segment has less competition and improved profitably. This is demonstrated by the return to profitability in 2025 and improved gross profit % and EBITDA as expected.

The company continues to have significant current net assets demonstrating the company's liquidity despite historic losses.

The company has strengthened its net assets position at the balance sheet date, as a result of the profit made in 2025. Due to continued financial support and the structuring of long term loans, the company has sufficient financial resources to enable the future strategic growth plans to be achieved.

The company will continue to manufacture and wholesale confectionery.

As we moved into 2026, investments have continued to accelerate our drive to profitable growth. The business has successfully realigned its category and customer split. This strategy has led to significant successful contract awards, within new markets and new sectors; bringing new customers and partners into the business portfolio which the company is looking to build on.

The directors will continue to monitor profit margins, cost control and sales growth in the forthcoming year. The company's growth strategy is based around strong customer partnership and continued development of sustainable products and innovation; along with development of automation solutions.

The company has sufficient financial resources in place, including the significant continued financial support from a family member of the ultimate shareholder, to execute its strategy and continue to develop into the future.

On behalf of the board

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

The principal activity of the company continued to be that of the wholesale of confectionery and food, and the manufacture of confectionery.

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

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

The company made political donations of £Nil in the current year (2024: £7,500).

The company continues to utilise its in-house technical expertise to continually develop new techniques and product lines. By constantly investing in talented individuals, advancing technology and our clients’ visions, the company continues to develop and improve its processes and product offering.

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

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

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; 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 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.

In accordance with s414(c)(11) of the Companies Act, included in the strategic report is information relating to the future developments of the business and principal risks and uncertainties, which would otherwise be required by schedule 7 of the "Large and Medium Sized Company's (Accounts and Reports) Regulations 2008" to be contained in the directors report. It has done so in respect of principal risks and uncertainties relating to financial instruments and future developments.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

We have audited the financial statements of Walkers Chocolates Limited (the 'company') for the year ended 31 December 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the 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 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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

In the light of the knowledge and understanding of the 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.

As explained more fully in the directors' responsibilities statement, 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.

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 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, and through discussions with the directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. 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 financial reporting legislation and taxation legislation. 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 amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the company's license to operate. We identified the following areas as those most likely to have such an effect: laws related to food safety and hygiene, employment law, health and safety and data protection.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.

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 auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

We design procedures in line with our responsibilities, outlined below to detect material misstatement due to fraud:

• Matters are discussed amongst the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud

• Identifying and assessing the design and effectiveness of controls that management have in place to prevent and detect fraud

• Detecting and responding to the risks of fraud following discussions with management and enquiring as to whether management have knowledge of any actual, suspected or alleged fraud;

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

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

Walkers Chocolates Limited is a private company limited by shares incorporated in England and Wales. The registered office is Walkers House, Coventry Road, Hay Mills, Birmingham, West Midlands, B25 8HE.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

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

The financial statements of the company are consolidated in the financial statements of Walkers Investments Limited. These consolidated financial statements are available from the parent company's registered office, Walkers House, Brickfield Road, Birmingham, B25 8HE.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future based on the continued support of related parties.

At the year end date other borrowings includes £7,845,416 (2024: £8,197,801) owed to a family member of the ultimate shareholder. This is in respect of a £9,000,000 funding facilities available for draw-down as required. This facility is repayable by 30 April 2028 or on an exit event, evidencing the continued financial support in place.

Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of 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.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 4 years.

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

Intangible assets are initially recognised at cost. After recognition. under the cost model, intangible assets are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Development expenditure is capitalised within intangible fixed assets where it can be identified with a specific product or project, it can be demonstrated that the asset will generate probable future economic benefits and that its costs can be reliably measured. The capitalised development expenditure is subsequently amortised on a straight line basis over the anticipated life of the benefits arising from the completed product or project.

Research and development expenditure is written off as incurred, except that development expenditure incurred on an individual project or product is capitalised as an intangible asset when the company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or resale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the asset and the ability to measure reliably the expenditure not recognised during development. Development expenditure previously recognised as an expense are not recognised as an asset in a subsequent period.

If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase.

Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the assets to be carried at cost less any accumulated amortisation and accumulated impairment losses. It is amortised evenly over the period of expected future benefit. The assets are reviewed annually for impairment if the above factors indicate that the carrying value may be impaired.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Amortisation of the asset begins when the development is complete and the asset is available for use.

Amortisation is included in 'administrative expenses' in the profit and loss account. Where factors, such as technological advancement or changes in market price, indicate that residual value or useful life has changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Assets in the course of construction are not depreciated.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Refer to note 3 to see the impact of a change in these useful economic lives upon depreciation.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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.

Cost is calculated using the first in, first out method.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The 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, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors 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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the 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.

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 company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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

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 company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

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

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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 leases asset are consumed.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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.

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

The directors assess the impairment of tangible fixed assets subject to deprecation or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Factors considered important that could trigger an impairment review include the following:

• Significant under-performance relative to historical or projected future operating results;

• Significant changes in the manner of the use of the acquired assets or the strategy for the overall business; and

• Significant negative industry or economic trends.

During the year, no impairments in the carrying value of tangible fixed assets have been deemed necessary (2024: £Nil). Refer to note 12 for the carrying value of tangible fixed assets impacted by this key accounting estimate.

The directors have reviewed the asset lives and associated residual values of all tangible fixed asset classes, and have concluded that asset lives and residual values are appropriate.

The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projects disposal values.

Depreciation charged in the year totalled £859,177 (2024: £1,479,671).

Refer to note 12 for the carrying value of tangible fixed assets impacted by this key accounting estimate.

The directors review the market value of and demand for its stocks on a periodic basis to ensure stock is recorded in the financial statements at the lower of cost and net realisable value. Any provision for impairment is recorded against the carrying value of stocks. The directors use their knowledge of market conditions, historical experiences and estimates of future events to assess future demand for the company’s products and achievable selling prices.

The stock provision at the year end is £619,003 (2024: £732,653).

Refer to note 13 to see the carrying value of stock impacted by this accounting estimate.

Trade and other debtors are recognised to the extent that they are judged recoverable. The directors reviews are performed to estimate the level of reserves required for irrecoverable debt. Provisions are made specifically against invoices where recoverability is uncertain.

The directors make allowance for doubtful debts based on an assessment of the recoverability of debtors. Allowances are applied to debtors where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The directors specifically analyse historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the provision for doubtful debts. Where the expectation is different from the original estimate, such difference will impact the carrying value of debtors and the charge in the profit and loss account.

The bad debt provision in place at year end is £309,715 (2024: £258,952).

Refer to note 14 to see the value of trade debtors impacted by this accounting estimate.

Accrued income is recognised to the extent it is judged recoverable. The directors calculate accrued income in accordance customer contracts, less any assessment of balances that are not considered recoverable due to changes in circumstance or events existing at the balance sheet date.

As at the balance sheet date, accrued income includes £200,353 (2024: £Nil) in respect of a customer contract which was re-negotiated post year end. This has been treated as an adjusting post balance sheet event to quantity with certainty the recoverable amount of accrued income for this contract.

Refer to note 14 to see the value of prepayments and accrued income impacted by this accounting estimate.

Insurance claim receivable

Insurance claims are recognised in other debtors to the extent they are certain, reflect an event that occurred prior to the year end and a claim formally made. The amount recognised represents management's best estimate of the recoverable amount. Whilst the directors consider recovery of the recognised amount to be probable, the ultimate settlement remains subject to agreement with the insurer and may differ from the estimate recognised. Any difference between the amount recognised and the final settlement will be recognised in the period in which the outcome becomes known.

As at the balance sheet date, other debtors includes £762,530 (2024: £Nil) in respect of 80% of the value of an insurance claim which is being negotiated post year end. This has been treated as an adjusting post balance sheet event to quantify with certainty the recoverable amount of this insurance claim.

Refer to note 14 to see the value of other debtors impacted by this accounting estimate.

Measurement of related party funding liability

The company has access to a non-interest-bearing funding facility of £9.0m (2024: £9.0m) provided by a related party, being a family member of the ultimate shareholder. At the balance sheet date, £7.8m (2024: £8.2m) had been drawn under the facility.

In accordance with FRS 102, the funding has been recognised initially at its present value using a market rate of interest for a comparable borrowing. The directors have applied a discount rate of 4.5% per annum based on their assessment of the rate that would have been available to the company for a similar unsecured borrowing with comparable terms. The liability has also been measured using an estimated repayment date of 30 April 2028.

The valuation of the liability is sensitive to changes in both the discount rate applied and the expected timing of repayment. A change in either assumption would result in a corresponding change to the carrying value of the liability on initial recognition and the amount of finance expense recognised over the remaining term of the facility.

The directors consider that the assumptions adopted represent their best estimate based on the information available at the reporting date. However, if the expected repayment date or an appropriate market borrowing rate were to differ from those estimates, the carrying amount of the liability and the related finance costs recognised in future periods could be materially affected.

Refer to note 17 to see the value of other creditors impacted by this accounting estimate.

During the year, the directors reviewed the estimated useful economic lives of tangible fixed assets included within plant and machinery. This assessment included the estimated remaining useful economic life based on expected future usage and asset condition.

The original useful economic life of items within plant and machinery was set as 10 years, whereas on re-assessment the useful economic lives have been extended to either 15 or 20 years. This change has been accounted for prospectively as a change in accounting estimate, effective from 1 January 2025.

This change in accounting estimate has reduced the depreciation charge for the year by £636,637, when compared to the depreciation charge applicable to the original assessment of useful economic life.

The exceptional items for both the current and prior year relate to a matter encountered in 2024 in respect of a fumigation claim. In the prior year, the recovery of costs suffered were to be sought from a related company, however it has been confirmed during the year, that the costs incurred are now to be pursued via insurance which the directors are confident will be agreed and settled shortly. As such the prior year claim from the related party has been reversed and replaced by an insurance claim. As the insurance claim has yet to be fully agreed, the directors have prudently only recognised 80% of the insurance claim value to allow for any adjustments by the insurance company. The increase in exceptional expenditure above of £125,916 represents the effective decrease in the amounts receivable in respect of the fumigation claim.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2024 - 1).

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

Development costs are amortised from the date the development is complete and the asset is in operational use.

Assets under construction relate to new machinery in the process of being installed. These will be transferred predominately to plant and machinery and depreciated from the date the assets come into full operational use.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Net obligations under finance leases and hire purchase contracts are secured over the asset to which they relate.

Net obligations under finance leases and hire purchase contracts are secured over the asset to which they relate.

Other borrowings are secured over the company's debtors and stock.

Other borrowings of £7,845,416 (2024: £8,197,801) are secured over the company's debtors and stock. This represents the discounted liability as at the year end. The absolute liability payable on the earlier of 30 April 2028 or an exit event is £8,693,322 (2024: £8,693,322).

The loan has been discounted using an interest rate of 4.5% p.a. being the rate charged for related party loans within companies under common control.

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

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

At the year end, the company has un-utilised tax losses carried forward of £8,042,342 (2024: £8,274,906). These have been partially offset against expected deferred tax liabilities arising on accelerated capital allowances claim.

During 2025, the company has partially recognised a deferred tax asset in respect of tax losses forecast to be utilised in the 12 months folowing the balance sheet date. This is based on forecasts incorporating actual results to date. The remaining deferred tax asset of £644,897 (2024: £1,269,656) will be recognised when it is probable that they will be utilised against future taxable profits post 31 December 2026.

The deferred tax asset set out above predominately relates to the future utilisation of tax losses against future profits. Accelerated capital allowances that are expected to mature over the associated fixed assets useful economic life. Pension contributions and short-term timing differences will attract tax relief in the year paid.

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

As at the year-end, contributions due to the schemes in respect of the current reporting year were £23,416 (2024: £30,956).

Profit and loss account

The profit and loss account includes all current and prior periods' retained profits and losses.

Other reserves

Other reserves represent the effect of discounting a non market rate loan and will be released over the term of the loan.

The company is committed to raw material purchases with its suppliers amounting to £4,981,204 (2024: £18,884,372).

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

The company has taken advantage of the exemption available in accordance with FRS 102 section 33 'Related party disclosures' not to disclose transactions entered into between two or more members of a group, as the company is a wholly owned subsidiary undertaking of the group to which it is party to the transactions.

During the year the company has recognised rental and insurance charges of £307,815 (2024: £562,534) from Euro Property Investments Limited, a related company due to common directors and control. At the year end, an amount of £274,162 (2024: £Nil) was owed to Euro Property Investments Limited.

During the year the company has recognised rental and insurance charges of £469,000 (2024: £485,314) from Robert Walker (Food Merchants) Limited, a related company due to common directors and control. At the year end, an amount of £48,000 (2024: £Nil) was owed from Robert Walker (Food Merchants) Limited.

During the year the company has recognised purchases of £190,163 (2024: £208,101) and recharges of £4,958 (2024: £33,390) to/ from Euro Packaging UK Limited, a company under common control. At the year end, an amount of £9,338 (2024: £25,665) was owed to Euro Packaging UK Limited, as included within other creditors.

During the year the company has recognised sales of £54,956 (2024: £Nil) and purchases of £131,088 (2024: £86,285) from Coppice Alupack Limited, a company under common control. At the year end, an amount of £2,602,149 (2024: £2,692,950) was owed to Coppice Alupack Limited, as included within other creditors.

During the year the company received loan advances of £Nil (2024: £800,000) from a related party, being a family member of the ultimate shareholder. At the year end, the loan amounted to £7,845,416 (2024: £8,197,801), as included within other borrowings. The absolute liability payable by the 2028 repayment date or on an exit event is £8,693,322 (2024: £8,693,322). The loan does not have a fixed repayment date, is secured and is non-interest bearing. In accordance with FRS102, the loan is discounted in line with a deemed market rate of interest as explained in note 2.

All related company balances (unless otherwise stated) are unsecured, non-interest bearing and repayable on demand.

On 12 May 2026, the company successfully negotiated a settlement and release agreement with a customer. This secured the ongoing contract of terms. This has been recognised as an adjusting post balance sheet event, to confirm the accrued income as at 31 December 2025 given that contract negotiations had commenced prior to the balance sheet date.

After the balance sheet date, the company has been in negotiations with their insurers over an insurance claim made. This claim has not yet been agreed and paid, therefore the directors have prudently only recognised 80% of the insurance claim value to allow for any adjustments by the insurance company. This has been recognised as an adjusting post balance sheet event to recognise an other debtor as at 31 December 2025.

The ultimate parent company is Walkers Investments Limited, a company registered in England and Wales. The ultimate controlling party is A M Alimahomed by virtue of his shareholding in Walkers Investments Limited.

Walkers Chocolates Limited is consolidated within the Walkers Investments Limited's group financial statements and copies can be obtained upon request from the groups registered office, Walkers House, Brickfield Road, Birmingham, B25 8HE.