2025 was another busy year for the Chamber with a foundation for growth established despite the economic pressures that will be all too familiar to our members.

We are pleased to report there were significant achievements made throughout the year with continued steady demand for what we do demonstrated by revenue growth across several Chamber departments. We also delivered on our ambition to diversify our business model, putting the organisation on a strong financial footing in 2026.

The first half of 2025 saw the Chamber running behind the level of deficit we had originally forecast for the year due to an increased cost of doing business, primarily from the rise in National Insurance contributions announced late in 2024. These factors also had a bearing on our membership levels.

Steps taken in the middle of the year had an immediate, positive impact. This continued throughout the second half of 2025 and into 2026, a year in which growth is once again in our sights.

Our strategy to steer the Chamber through this challenging economic climate is typical of an agile and sustainable business; control our costs, grow our income and improve the quality of our core business, which in the case of the Chamber has been, is and will remain, membership.

On cost controls, we took the difficult decision to implement a restructure in the middle of 2025. This resulted in three senior management roles being made redundant. As with any such restructuring, this decision was taken for the right reasons, correcting our financial course in line with a prudent mid-year reforecast.

In this context, it is positive to report that every revenue generating department of the Chamber achieved income growth in 2025 compared to the previous year. Increases in membership income, event sponsorship and property income indicated renewed interest and participation in the Chamber’s core offering.

We have extensive data on the many reasons businesses have for joining the Chamber. A wish to be a part of the North East’s biggest, longest established and most influential business network, with all of the benefits that are included, is usually cited as the main reason for joining.

We also have a good understanding of what lies behind what is usually a difficult and reluctant decision to leave the Chamber. Most businesses tell us their resignation is due to increases in the other costs they face.

As a result in 2025, our overall membership number dipped to 1,830, although membership income increased by 9% on 2024. As we put in place the right foundations for the future, we know our strategy to increase income must include an element of diversification.

Towards the end of 2025, the Chamber was appointed to carry out some funded work on behalf of the North East Combined Authority. Our task in 2026 is to deliver the joint employer pilot as part of the Get Britain Working Trailblazer.

The Trailblazer is one of a number of Combined Authority workstreams looking at the pathways to work for those currently economically inactive due to ill health. Our brief is similar to that of the Local Skills Improvement Plans we have delivered in the North of Tyne and Tees Valley; to engage with employers and organisations currently running employment programmes to identify the barriers they face in creating opportunities for people who are economically inactive, identifying interventions which are effective and designing a pilot programme to be tested with employers.

With our extensive knowledge of and relationships with North East employers, this is precisely the sort of work the Chamber is ideally positioned to deliver and it is our intention to do more of this.

For many years, the Chamber has retained healthy cash reserves but with interest rates historically low for much of that period, our cash in the bank position remained largely static until last year when we took the decision to use these reserves to fund a range of investments under management by Rathbones. These are investments in the long-term financial security of the Chamber.

By keeping our costs under control while diversifying our income, we have been able to deliver on the third pillar of our strategy, improving the quality of our core membership offer.

In 2025, we adjusted our membership portfolio model making it easier for members to select the level at which they engage with us and the services they choose to receive.

We also launched our Business Services Ecosystem to connect Chamber members with trusted, high-quality services and providers across 12 key pillars, all with the aim of driving savings for members and encouraging North East businesses to work together.

Our events programme continued to prove extremely popular with more than 8,000 people attending any one or a number of more than 250 separate events throughout the year.

International trade is a vital part of our Chamber and in 2025 we supported more than 600 North East businesses to import or export products or services.

As chair and chief executive of the Chamber, we are both immensely proud of the team who work so tirelessly on behalf of our members and region.

From our brilliant apprentices to our international trade specialists, from our corporate services teams in HR, finance, IT and property to our membership account managers and from our policy experts to our executive team, the Chamber is full of passionate, dedicated people.

On their behalf and thanks in no small measure to their own efforts, 2025 saw the Chamber achieve the highest status under the North East Combined Authority’s SHINE employer recognition programme, as well as receiving the Better Health At Work Award and achieving Living Wage employer status.

Our brilliant team doesn’t end with those on the payroll. The Chamber’s council is the governing body that represents our membership and we are grateful to council members for all of their work. We would also like to take this opportunity to thank the very many people who are so active in our various area meetings, industry and subject-matter forums. They all contribute immense value to our work.

Finally, we would like to thank our non-executive board members for their counsel, support and challenge. The Chamber board exists to oversee our finances, risks, governance and strategy. Board members provide their expertise voluntarily and we are extremely grateful to them for doing so.

In 2025, our colleagues Emma Gaudern and Abigail Pogson stepped down from the board due to term limitations and a new role respectively. We thank them for their very significant contribution to the Chamber over a number of years.

This is the Chamber’s final annual report under the presidency of Deborah Walton, whose two year term will come to an end at our 2026 AGM. It has been a pleasure to work with Deborah and she has represented the Chamber with great distinction throughout her tenure. If you’ve seen Deborah speak at one of our events, you will have witnessed for yourself the charisma, optimism and pride which have been the hallmarks of her presidency. Thank you Deborah for being such an outstanding Chamber president.

We are looking forward to welcoming our next president and new board colleagues in 2026. They will be joining a Chamber that has undergone significant change in order to remain at the forefront of the North East economy.

We don’t underestimate the challenges facing this great region and nor will we ever be complacent about the role the Chamber can play but we move into the second half of this decade stronger and more sustainable, with a renewed commitment to helping our businesses and people thrive.

We have the plan, the team and the momentum to deliver for our region.

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

The principal activity of the company is the provision of support services for, and representation of businesses to contribute to the economic and social life of the North East.

The result for the year is set out on page 16. The company has reported a loss of £64,000 (2024: profit of £578,000) for the financial year, with a negative operating cashflow of £315,000 (2024: positive £16,000) after a decrease in working capital of £1,197,000 (2024: increase of £530,000). The overall decrease in cash of £1,325,000 (2024: increase of £13,000) is stated after investments of £1,125,000 (2024: £171,000) in tangible, intangible and investment property assets; and deposits of £42,000 to fixed rate deposits.

This position is in line with forecast expectations for 2025. As a small business itself, the Chamber began 2025 like many of our own members: reassessing our forecast assumptions for 2025 against the Budget announcements of late 2024, which included significant increases in employment costs taking effect in April 2025. These additional costs came at the same time the organisation had made significant investments in systems and people to deliver a new membership strategy based around a refreshed and revised proposition. In the first six months of this year, the direct effect of these additional cost pressures, combined with the secondary impact on the sales and retention intentions of our members, required the Chamber’s executive team, under the direction of the board, to take a small number of mitigating actions in year. This enabled the organisation to enter 2026 in a more stable and secure position.

Total membership numbers ended the year at 1,830 (2024: 2,009) with membership subscriptions increasing to £2,185,811 (2024: £1,997,913). Member retention dipped to 77%, compared to a consistent previous trend of 82%. This was reflective of a significant degree of change and uncertainty in businesses’ economic environment and the direct impact this had on our members’ intentions. As part of our refreshed membership offer we launched two new packages, start up and grow, and solo. These outperformed target sales expectations, as did the enterprise (previously our large) membership package. Our partner offer continued to perform well, with two new partners joining in 2025.

Our events programme continued to perform well in 2025 with more than 8,000 people participating in our awards, networking and knowledge programmes. Our Business and Inspiring Women’s Awards continued to grow as an integral part of our offer. Events and awards sales and sponsorship continued as a positive area of commercial income for the Chamber, with some notable change across income areas. Events and associate sponsorship held steady at £85,237 (£89,849 (2024)). Award sponsorship increased from £68,750 (2024) to £95,170 (2025), 50% ahead of forecast budget due to a positive sales strategy inviting previous award winners for 2024 to sponsor their award categories for 2025.

International trade remained a central element of our membership offer in 2025. Our goal continues to be one of diversification and growth, offering our services to a wider audience through engagement and collaboration with like-minded organisations. 350 businesses benefitted from our international membership in 2025, and our team delivered more than 10,000 carnets and export documents. Our training offer, delivered in partnership with the British Chambers of Commerce, continued to perform well in 2025, delivering 35 courses across several topics. This ensures our members have the knowledge and tools to reach global markets while driving a commercial income stream for the Chamber.

Building on our investments in 2024 our property strategy continued to make a positive contribution to the business, delivering £463,227 in revenue. Cost control across property, IT, departmental overheads and policy also made an important contribution to year end performance in line with our expectations.

The company's key financial and other performance indicators during the year were as follows:

The Chamber holds significant investment property assets, which were valued at £2,144,155 on the 31 December 2025 (2024: £2,112,528). Investment property rentals make a significant contribution to support our work, generating rental income of £463,227 during 2025 (2024: £310,168), however, changes in the fair value of these properties can also result in volatility in our profit and loss account. During 2025, such fair value movements increased our reported profits by £30,844 (2024: decreased by £76,592).

In 2025, under the direction of our investment committee, the Chamber moved £1,000,000 under active investment by Rathbones Investment Management. In consultation with relevant directors, a balanced investment objective was set for the portfolio, which had grown by 1.7% net of fees on the 31 December 2025.

The principal risks and uncertainties are presented in the directors’ report on pages 7-11.

Gender pay reporting

The Equality Act 2010 (Gender Pay Gap Information) Regulations require employers with 250 or more employees to publish information on the differences between the average earnings of men and women.

The Chamber is not required to make these disclosures but considers this to be an important issue and therefore makes disclosures voluntarily, in line with our Women's Leadership and Social Equity Forum and Inspiring Women in Business programme. The table below present the gap between the hourly pay of male and female employees, and the gender balance of the workforce as of the standing audit date of April 2025 compared to April 2024.

At the date of reporting, the Chamber had a workforce of 63 employees, made up of 45 women (71.4%) and 18 men (28.6%). These figures show that the Chamber has made substantial progress in closing the gender pay gap over the past year.

This improvement reflects an increase in the number of women in senior positions, alongside broader positive shifts across the wider workforce, including a three-tiered performance-based pay award, demonstrating the organisation’s ongoing commitment to gender equity and inclusive career progression.

Building on this positive position, the Chamber will continue to implement initiatives to ensure our organisational culture aligns with our stated values, particularly inclusivity. We will implement a more regular pay gap forecasting approach to look at changes within financial year. Based on this up-to-date data, the Chamber’s executive team will be responsible for taking appropriate and timely action. The Chamber remains committed to looking for ways to narrow the gaps that remain and will continue to report our progress.

On behalf of the board

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

The company is limited by guarantee and controlled by its members. Each member of the company is liable to the extent of £1, in the event of the company being wound up and there being insufficient assets to pay off all the liabilities.

The results for the year are set out on page 16.

The loss for the financial year after taxation amounted to £64,000 (2024: profit of £578,000). As the company is limited by guarantee no dividends may be declared.

The Chamber reported a loss of £64,000 for the year ended 31 December 2025. The underlying operating position for the year shows a deficit of £189,000. This reflects increased costs associated with service delivery, investment in staffing and infrastructure, and a reduction in gross margin compared to the prior year. These factors continue to be managed within the context of the Chamber’s long-term strategy for financial sustainability and growth.

The reported position is supported by several non-operating income streams and accounting adjustments. These include grant income, rental income generated from the Chamber’s property portfolio, and modest returns on financial investments. £167,000 of ERDF grant income, previously held as deferred income on the balance sheet, was recognised in the year following satisfaction of the relevant conditions. In addition, gains arising from investment property revaluations and financial asset movements contributed positively to the overall result, alongside a deferred tax credit recognised in accordance with applicable accounting standards.

During the prior year, the Chamber received a distribution of £742,000 from its subsidiary, Northeast Worldwide Limited (NEWW). As this transaction occurred within the group, it was eliminated on consolidation and therefore did not impact the reported group result. However, the distribution was recognised in the parent company accounts, resulting in a reported profit at company level.

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

Emma M Gaudern and Abigail Pogson stepped down from the board with effect from 25 September 2025.

The board of Directors mainly comprises non-executive directors. In exercising their responsibilities, they rely on the competence and probity of the executives and on appropriate professional advice.

The board of Directors is responsible for ensuring that management fulfils responsibilities for financial reporting, ultimately responsible for reviewing and approving the financial statements.

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

The Chamber’s financial instruments comprise cash and various items arising directly from its operations. Under the direction of the Investment committee, the Chamber now also has £1,000,000 under active investment by Rathbones Investment Management. In the accounting period this has delivered £15,000. The main purpose of these instruments is to fund the Chamber’s operations, however the directors recognise that the cash under active management is a long-term investment and is not intended to be accessed for day-to-day operations.

The Chamber finances operations through cash reserves which total £548,000 at year end. The risk is managed by monitoring cash reserves against forecast future requirements. Transactions and cash balances are in sterling therefore there is no foreign currency risk.

The Chamber has no borrowings and therefore does not have a significant exposure to interest rate risk. Its reserves are expected to also benefit from our new investment strategy taking material effect in 2026.

Where appropriate, customers are analysed for credit worthiness before the Chamber’s standard payment terms and conditions are offered and credit limits are set.

See disclosure within the fair review of the business within the strategic report along with the president’s report, and joint chair and chief executive’s report.

The Chamber felt the effects of a challenging economic climate directly and indirectly in 2025. Sales and profit forecasts in key departments felt the effects of these pressures, resulting an operating loss of £189,000. The actions of the executive team, with the support of the board, addresses these challenges, bringing the Chamber final year end results in line with revised forecasts. The impact of a limited but carefully considered restructure achieved the immediate objective of putting the Chamber on a stable financial footing at the end of 2025. Supported by our new North East Combined Authority contract into 2026, the Chamber is starting the year with a realistic, revised set of objectives in line with our three year plan, which we expect will provide the conditions for stability in our membership base and modest revenue growth from a diversified base.

In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.

Principal risks and uncertainties

General economic conditions

General trading conditions remain challenging and the Chamber is not exempt from this. Inflation, skills shortages, a challenging labour market and geopolitical instability continue to impact member recruitment and retention, as well as the Chamber’s day-to-day operations. The Chamber’s membership base includes public sector organisations and charities as well as traditional SMEs and larger businesses, which face similar stresses. In 2025 the impact of employment taxes increases had a significant bearing on the Chamber’s operating costs and our member intentions. The Chamber’s executive team, in consultation with the board, undertook a limited restructure to manage these impacts in the second half of the year. Alongside effective cost controls, this allowed the organisation’s operating costs to stabilise by year end, a position that is continuing into early 2026. The revised membership proposition, which includes the option for members to both upgrade and simplify their packages, has been developed to respond to, and mitigate, some of these uncertainties.

Commercial property risk

The Chamber holds commercial property assets for its own use and as investments, with income supporting the work of the Chamber. Our asset ownership gives rise to several specific risks and uncertainties, in particular, changes in property valuation and the risk of void periods. A full risk management plan has been developed as part of our contract with delivery partner Floe to identify and mitigate any additional risks presented by the project.

Political and funding risks

In line with our three year strategy, and in the context of general economic conditions, the Chamber made progress in its ambitions to diversify its income further in 2025 to address funding risks. We were successful in securing continuation of our DWP (previously DfE) funded Local Skills Improvement Plan work for Tees Valley. In November we were also successful in securing a pilot contract worth £137,500 from the North East Combined Authority. Delivered in partnership with Chamber member Interdigitate from early 2026 for a three month period, this will explore employer attitudes and behaviours in relation to addressing economic inactivity and helping people return to work. Delivered by the policy team, the contribution to operating costs is expected to materialise in the first half of 2026. Across 2025 the Chamber also responded to the effects of geopolitical uncertainty on behalf of our members, delivering trade briefings to prepare members for the effects of the USA’s new tariff regime. A degree of geopolitical uncertainty is anticipated to continue into 2026 which may present further risk to our members and the Chamber itself. A strategy of further diversification of funding will help protect against some of these risks.

As a member-led organisation, the Chamber’s reputation is founded on trust and credibility. We therefore need to embody good corporate governance in everything that we do. In 2025, alongside our standing committee structure, we fulfilled this objective through several new and important areas of work. Firstly, we strengthened our approach to talent retention in the region by employing apprentices across our systems, finance and marketing teams. Secondly, we achieved Living Wage accreditation at the end of 2025, demonstrating our ongoing commitment to ensuring all employees are paid a fair and decent wage. Finally, we delivered a series of member-led workshops devoted to social value. The outcomes of this project highlighted ways in which the Chamber itself could deliver greater social value in relation to our third party spend and direct delivery of work in the region. This will inform the Chamber’s plans and corporate governance activities into 2026.

The following standing committees have been established to assist the board in the exercise of its corporate governance responsibilities.

Remuneration committee

The committee is chaired by John PB Marshall and includes Tara Stonehouse and Lesley Moody. The committee is responsible for reviewing and determining executive remuneration, having regard to a general policy framework for executive remuneration established by the board. An analysis of directors' and employees' remuneration appears in notes 6 and 7.

Audit and Risk committee

The committee is chaired by Tara Stonehouse and includes Louise Hunter, Deborah Walton, Aneela M Ali and Rhiannon T Bearne. The committee's terms of reference include the review of the annual financial statements to be issued to the members, accounting policies of the group, compliance with Financial Reporting Standards, internal controls, risk management strategies and reporting, and the planning, scope and conclusions of the external auditors' programme. The committee adopted new terms of reference in 2024 to update its roles and responsibilities in line with legal changes and industry best practices.

Investment committee

The committee is chaired by Yvonne Gale and includes Andrew S Haigh and Aneela M Ali. The committee is responsible for reviewing the financial assets of the Chamber and making recommendations to the board on the Chamber’s investment strategy. In 2025, the investment committee executed our new investment strategy in line with our three-year corporate objectives, placing £1,000,000 in cash under Rathbones Investment Management. Following the completion of this exercise, the investment committee has ceased operation, and members have joined a new Finance committee, which will take over treasury management and the ongoing monitoring of the organisation’s finances. This is chaired by Andrew S Haigh and members include Yvonne Gale, John Johnston, John PB Marshall, Lesley Moody, John McCabe, Aneela M Ali and Rhiannon T Bearne.

Nominations committee

The nominations committee is a council committee chaired by Lesley Moody and includes John PB Marshall, Darren Hankey, Natasha McDonough, John McCabe and Rhiannon T Bearne. The committee is responsible for identifying candidates, reviewing appointments to the board and council, and making recommendations to the council.

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.

Further information on the Chamber's business activities, together with the factors likely to affect its future development, performance and position are set out in the President's statement, Chairman's statement, Chief Executive's statement and the Directors' and Strategic reports.

The company meets day-to-day working capital requirements through cash generated from operations. The company had no borrowings at the year end or at any time during the year.

The loss before tax for the 2025 financial year was £101,000, with deferred taxation of £37,000, the loss after tax was £64,000. The closing cash balance at the year end was £548,000. In addition to the closing cash balance, the group holds further fixed term bank deposits classified as current asset investments totalling £693,000 at the end of 2025.

The Chamber continues to maintain a strong balance sheet, with net assets of £4.256m at the year end and no external borrowings. Cash and short-term investments remain at a level sufficient to support day-to-day operations and provide resilience against short-term fluctuations in trading performance.

The Chamber has prepared detailed financial forecasts and projections for 2026/27, which will be monitored against KPIs to continue to support our primary objective of financial sustainability. These will be supported by additional commercial income projections, enhanced sponsorship and association opportunities all driving sustainable developments in membership numbers.

These forecasts also include sensitivities that take account of the risk of severe but plausible downsides, including reductions in membership numbers or overall level of membership income as our new membership proposition is rolled out and fluctuations in commercial international trade services. The Chamber has put in place mitigating actions to address risks which the board, relevant committees and the executive team will regularly review.

In the directors’ assessment of possible changes in trading performance, they have considered a fall in demand for services and potential cost savings; reflected in an enhanced risk register as well as a new strategy for membership growth and retention led by the executive director for membership and supported by the wider executive team and board.

The underlying trading assumptions used in forecasting, for example in relation to the trajectory of inflation and economic growth, are difficult to predict, so are subject to significant variation. The forecasts, including the downside sensitivities, show the Chamber should be able to continue in operational existence as a going concern.

Substantial cash reserves and the ability to manage any longer-term reduction in trading into 2026/27 provide comfort that the Chamber has adequate financial resources to continue in operational existence, for at least twelve months, from the date of signing of the financial statements.

Based on the factors set out above, the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

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

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 surplus or deficit 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.

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

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2025 and of its deficit 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.

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.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

We identified the following applicable laws and regulations as those most likely to have a material impact on the financial statements: Employment law (including the Working Time Directive); and compliance with UK Companies Act.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud; 

• Reviewing minutes of meetings of those charged with governance;

• Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection; 

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

• Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias. 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

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

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

North East Chamber of Commerce (“the company”) is a company limited by guarantee domiciled and incorporated in England and Wales, and consequently does not have share capital. Each of the members is liable to contribute an amount not exceeding £1 towards the assets of the company in the event of liquidation. The registered office is Aykley Heads Business Centre, Aykley Heads, Durham, DH1 5TS.

The principal activity of the company is to provide independent representation of the interests of its members and contribute to the improvement of the conditions and trading environment in which businesses operate in the North East of England through its representational activities and the provision of business support services.

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 £'000.

The financial statements have been prepared under the historical cost convention, except investment properties and investments that are shown at fair value. The principal accounting policies adopted are set out below.

The company has taken advantage of the exemption under section 402 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that its subsidiary undertaking is not material and so its inclusion is not required for the purpose of giving a true and fair view. The financial statements present information about the company as an individual entity and not about its group.

Further information on the Chamber's business activities, together with the factors likely to affect its future development, performance and position are set out in the President's statement, Chairman's statement, Chief Executive's statement and the Directors' and Strategic reports.true

The company meets day-to-day working capital requirements through cash generated from operations. The company had no borrowings at the year end or at any time during the year.

The loss before tax for the 2025 financial year was £101,000, with deferred taxation of £37,000, the loss after tax was £64,000. The closing cash balance at the year end was £548,000. In addition to the closing cash balance, the group holds further fixed term bank deposits classified as current asset investments totalling £693,000 at the end of 2025.

The Chamber continues to maintain a strong balance sheet, with net assets of £4.256m at the year end and no external borrowings. Cash and short-term investments remain at a level sufficient to support day-to-day operations and provide resilience against short-term fluctuations in trading performance.

The Chamber has prepared detailed financial forecasts and projections for 2026/27, which will be monitored against KPIs to continue to support our primary objective of financial sustainability. These will be supported by additional commercial income projections, enhanced sponsorship and association opportunities all driving sustainable developments in membership numbers.

These forecasts also include sensitivities that take account of the risk of severe but plausible downsides, including reductions in membership numbers or overall level of membership income as our new membership proposition is rolled out and fluctuations in commercial international trade services. The Chamber has put in place mitigating actions to address risks which the board, relevant committees and the executive team will regularly review.

In the directors’ assessment of possible changes in trading performance, they have considered a fall in demand for services and potential cost savings; reflected in an enhanced risk register as well as a new strategy for membership growth and retention led by the executive director for membership and supported by the wider executive team and board.

The underlying trading assumptions used in forecasting, for example in relation to the trajectory of inflation and economic growth, are difficult to predict, so are subject to significant variation. The forecasts, including the downside sensitivities, show the Chamber should be able to continue in operational existence as a going concern.

Substantial cash reserves and the ability to manage any longer-term reduction in trading into 2026/27 provide comfort that the Chamber has adequate financial resources to continue in operational existence, for at least twelve months, from the date of signing of the financial statements.

Based on the factors set out above, the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

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 membership subscriptions is recognised on a straight line basis over the period of the membership and in line with the services rendered. Turnover from International trade contracts is recognised when it and the associated costs can be measured reliably and when there is certainty to the entitlement of benefits.

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

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

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

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 surplus or deficit.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in surplus or deficit.

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

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

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

Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.

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 surplus or deficit, 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 surplus or deficit, 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.

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.

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 surplus or deficit, 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 surplus and deficit, 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 surplus or deficit.

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 surplus or deficit.

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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in surplus or deficit in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

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.

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.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Grants are presented and disclosed in other operating income.

Other operating income

Other operating income includes rents receivable under operating leases for the period, exclusive of Value Added Tax and gains on investment properties.

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.

There are considered to be no key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

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

The carrying value of the investment property is subject to review of the market value of the properties by an external valuer. The value is assessed on an annual basis and any changes in market value of the properties are realised in the income statement.

An analysis of the company's turnover is as follows:

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 4 (2024 - 4).

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

Leasehold land and buildings are held under a 125 year lease.

The investment property is based on valuations on 10 December 2025 by an external, independant valuer, having an appropriate recognised professional qualification and recent experience in the location and class of property being valued.

The valuations, which are supported by market evidence, are prepared by considering the aggregate of the net annual rents receivable from the properties and where relevant, associated costs. A yield which reflects the specific risks inherent in the cash flows is then applied to the net annual rentals to arrive at the property valuation.

Any gain or loss arising from a change in fair value is recognised in the Income Statement.

The historic cost net book value of investment properties is £1,404,000.

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

Fixed term deposits of £693,000 (2024 - £735,000) comprise cash held on deposit with a maturity date of more than three months but less than twelve months at the year end.

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

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.

At the year end there were no contributions outstanding (2024: £nil).

The company is a company limited by guarantee not having a called up share capital. Each member of the company is liable to the extent of £1 in the event of the company being wound up and therefore being insufficient assets to pay off the liabilities. Accordingly, the company has no shareholders' funds and no reconciliation of movements in shareholders' funds has been presented.

The company provided a performance guarantee in respect of its subsidiary North East Worldwide Limited for its contract with the Department for International Trade. No amounts have been provided in these financial statements in respect of these guarantees as the likelihood of them being called in is considered to be remote.

North East Chamber of Commerce had a 33% interest in Go Global North East Limited, a joint venture with RTC North Limited and the North East of England Process Industry Cluster Limited. The three joint venture partners, of which the Chamber was one, had entered into a joint and several performance guarantee in respect of this entity up to a maximum of £5 million each. The Chamber withdrew from membership of the joint venture during the prior year.

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:

During the normal course of trade the company purchases goods and services and receives income from organisations in which directors have an interest. Any material transaction in the context of the financial statements is approved by the board.

The amounts oustanding are unsecured non-interest bearing and will be settled in cash. No expense has been recognised in the year (2024: £Nil) in respect of bad debts from related parties.

The company is controlled by its board of directors acting on behalf of its members.