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

The principal activity of the company during the year continued to be the design, manufacture and supply of low voltage switchgear and associated electrical distribution solutions for industrial, commercial and infrastructure applications.

The Company continued to trade satisfactorily throughout the year, maintaining its focus on the delivery of high-quality engineering solutions and customer service. Despite ongoing economic uncertainty, inflationary pressures and supply chain challenges affecting the manufacturing sector, the company remained resilient and continued to meet customer demand through effective project management, strong supplier relationships and disciplined operational control.

The Directors continued to focus on improving operational efficiency, maintaining high manufacturing standards and investing in the skills and development of employees. The company's reputation for delivering reliable, bespoke switchgear solutions remains a key strength and continues to support long-term customer relationships and repeat business.

The Directors monitor the financial performance of the business through regular review of key performance indicators, including turnover, gross margin, profitability, cash flow and order book. The results for the year are considered satisfactory in light of prevailing market conditions.

The principal risks and uncertainties facing the Company include fluctuations in the cost and availability of raw materials and electrical components, supply chain disruption, competitive market conditions and wider economic uncertainty.

These risks are managed through maintaining strong relationships with a diverse supplier base, careful monitoring of procurement activity, prudent financial management and regular review of operational performance. The Directors continue to monitor these risks and take appropriate actions where necessary to minimise their impact on the business.

The Directors remain confident in the long-term prospects of the Company. Demand for investment in electrical infrastructure, industrial facilities, data centres, energy projects and commercial developments continues to provide opportunities within the Company's core markets.

The Company will continue to invest in its manufacturing capability, engineering expertise and workforce to support sustainable growth whilst maintaining its commitment to quality, safety and customer service. The Directors believe that the Company is well positioned to capitalise on future opportunities and to continue delivering value to its customers and stakeholders.

The company uses a range of key performance indicators to monitor the performance of the business:

Financial 31 December 2025 31 December 2024

Turnover (£) 14,433,413 12,059,286

Gross Profit Margin (%) 25.9 23.3

Operating Profit (£) 956,284 633,130

Profit before tax (£) 947,399 622,594

On behalf of the board

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

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

Dyke Yaxley Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the business review, principal risks and uncertainties 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.

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.

Qualified opinion

We have audited the financial statements of KDS Solutions Ltd (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, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 qualified opinion

Stock included in the balance sheet at 31 December 2025 amounted to £2,149,477. The corresponding stock balance at 31 December 2024 was £2,234,936.

The financial statements for the year ended 31 December 2024 were unaudited as the company was entitled to exemption from audit. We were unable attend the stock count at that date or to obtain sufficient appropriate audit evidence regarding opening stock through alternative audit procedures. Since opening stock enters into the determination of the financial performance for the current year, we were unable to determine whether any adjustment to cost of sales and the resulting profit for the year ended 31 December 2025 was necessary.

During our attendance at the company's physical stock count at 31 December 2025, limitations in the company's stock records and count procedures meant that we were unable to obtain sufficient appropriate audit evidence regarding the completeness and existence of stock. This included stock incorporated into projects under construction which could not be separately identified and reconciled to the stock records.

We were unable to obtain sufficient appropriate audit evidence regarding those quantities through alternative audit procedures.

Consequently, we were unable to determine whether any adjustments were required to opening or closing stock, cost of sales, profit before taxation, taxation and retained earnings for the year ended 31 December 2025.

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 qualified 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

Except for the possible effects of the matters described in the basis for qualified opinion section of our report, 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 respect solely of the limitation of scope on our work relating to stock, described above:

• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

• we were unable to determine whether adequate accounting records had been maintained.

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:

• 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.

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, and 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 gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud.

We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including; the Companies Act 2006, UK tax legislation, Environmental and Health and Safety regulations. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management for their awareness of non-compliance, reviewing their board minutes and incident reports covering the financial year and post year end.

There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

We did not identify any audit matters relating to irregularities, including fraud.

As in all our audits, we also addressed the risk of management override of internal controls, including testing the appropriateness of journal entries, reviewing the judgments involved with accounting estimates, performed analytical procedures to identify any unusual or unexpected relationships and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to 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.

Other matter

The financial statements of the entity for the year ended 31 December 2024 were not audited. Accordingly, we were unable to obtain sufficient appropriate audit evidence concerning the opening balances at the beginning of the current period. Our audit opinion on the financial statements for the year ended 31 December 2025 is not modified in respect of this matter, except to the extent that the opening balances may affect the determination of the financial performance and cash flows for the current period.

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.

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.

KDS Solutions Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Hortonwood 66, Telford, Shropshire, TF1 7GB.

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.

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

When cash inflows are deferred and represent a financing arrangement, the promised consideration is adjusted for the effects of the time value of money, which is recognised as interest income.

The company recognises revenue from the following major sources:

• Sale of electrical equipment

• Installation of electrical equipment

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Revenue 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.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

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 profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

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.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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.

Work in progress includes those costs that have been used in bringing it to its present state of completion. Costs include both material and labour costs along with an allocation of fixed production overhead.

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.

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.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

The costs of short-term employee benefits are recognised as a liability and an expense.

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

Work in progress represents materials, direct labour costs and attributable overheads incurred on incomplete client assignments. Work in progress is valued at the lower of cost and estimated net realisable value. Management exercises judgement in assessing the recoverability of unbilled time and materials and the stage of completion for matching revenue against performance obligations.

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 2 (2024 - 2).

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

The net book value of other tangible fixed assets includes £197,924 (2024: £212,307) in respect of assets held under finance leases or hire purchase contracts. The depreciation charge in respect of such assets amounted to £58,741 (2024: £55,241) for the year.

Bank Loans are secured by a fixed and floating charge over the company's undertaking, property and assets.

The amount shown under Bank loans and overdraft represents a CBILS loan that is subject to a UK Government guarantee. There is also a further £45,000 included within creditors due within one year. The facility is provided through the Coronavirus Business Interruption Loan Scheme (CBILS), managed by the British Business Bank on behalf of and with the support of the Secretary of State for Business, Energy and Industrial Strategy. The CBILS guarantee is provided to the lender.

The long-term loans represents a CBILS loan that is subject to a UK Government guarantee. There is also a further £45,000 included within creditors due within one year. The facility is provided through the Coronavirus Business Interruption Loan Scheme (CBILS), managed by the British Business Bank on behalf of and with the support of the Secretary of State for Business, Energy and Industrial Strategy. The CBILS guarantee is provided to the lender.

Factored debts are secured by debenture. The debenture carries a fixed Charge and a floating charge on all property and undertakings of the company. At the year end, the facility was undrawn and the associated account had a cash balance of £1,882,672.

A dilapidation provision has been provided in these accounts in respect of the properties from which the company operates.

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

The deferred tax liability set out above is expected to reverse within 24 months and relates to accelerated capital allowances that are expected to mature within the same period.

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.

Over the years the company has made attempts to buyback the shares held by a minority shareholder.  This has led to an unfair prejudice claim being brought against the company.  The matter is the subject of court proceedings and the remedy is the buyback of the shares, however the amount cannot be reliably estimated at the current time.

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:

Amounts contracted for but not provided in the financial statements:

During the year the company entered into the following transactions with related parties:

Rent was paid to the parent company KDS Power Solutions for £105,250 (2024 £100,000) in respect of the company's occupation of Hortonwood 66, Telford.

Included in Debtors is an interest free loan owing from the parent company for £389,921 (2024 £389,921).

There is a loan to Mr S Guy, a director, of £150,829 (2024 £146,003). Interest has been charged on this loan at a rate of 3.75% during the 2025 year.

A loan to shareholder N Elton has a balance of £14,394 (2024 £13,928) at year end. Interest has been charged on this loan.

The company is under the control of it's parent company KDS Power Solutions Limited. The registered address for KDS Power Solutions Limited is: Hortonwood 66, Telford, Shropshire, TF1 7GB.