The Directors present their Directors' Report and financial statements for the year ended 31 December 2024.

Capita HCH Limited ('the Company') is a wholly owned subsidiary (indirectly held) of Capita plc. Capita plc along with its subsidiaries are hereafter referred to as 'the Group'.

The principal activity of the Company is that of the provision of consulting services to fellow group companies and this is expected to continue for the foreseeable future.

The results for the year are set out on page 3.

No ordinary dividends were paid or proposed during the year. (2023: £nil).

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

The Company has granted indemnity to the Directors of the Company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. This qualifying third party indemnity provision remains in force as at the date of approving the Directors' report.

The Company made no political donations and incurred no political expenditure during the year (2023: £nil).

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

Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with United Kingdom ('UK') accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss 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 estimates that are reasonable and prudent;

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

• assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

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

The income statement has been prepared on the basis that all operations are continuing operations.

The notes and information on pages 8 to 21 form an integral part of these financial statements.

The notes and information on pages 8 to 21 form an integral part of these financial statements.

The notes and information on pages 8 to 21 form an integral part of these financial statements.

For the financial year ended 31 December 2024 the company was entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies.

The Directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The nominal proceeds on issue of the Company's equity share capital, comprising 95 ordinary shares of £1 each.

Net losses accumulated in the Company.

The notes and information on pages 8 to 21 form an integral part of these financial statements.

Capita HCH Limited is a private company limited by shares incorporated in England and Wales. The registered office is First Floor, 2 Kingdom Street, Paddington, London, England, W2 6BD. The company's principal activities and nature of its operations are disclosed in the Directors' report. The financial statements have been prepared under the historical cost basis except where stated otherwise and in accordance with applicable accounting standards.

In determining the appropriate basis of preparation for the financial statements for the year ended 31 December 2024, the Company’s Directors (‘the Directors’) are required to consider whether the Company can continue in operational existence for the foreseeable future. The Directors have concluded that it is appropriate to adopt the going concern basis, having undertaken a rigorous assessment as set out below.

Accounting standards require that ‘the foreseeable future’ for going concern assessment covers a period of at least twelve months from the date of approval of these financial statements, although those standards do not specify how far beyond twelve months the Directors should consider. In their going concern assessment, the Directors have considered the period from the date of approval of these financial statements to 31 December 2026 (‘the going concern period’) and which aligns to the period considered by the Directors of the ultimate parent company, Capita plc.

Directors' assessment

The financial forecasts used for the going concern assessment are derived from financial projections for 2025-2026 for the Company which have been subject to review and challenge by management and the Directors. The Directors have approved the projections.

Inter-dependency with other entities in the group headed by Capita plc ('the Group')

The Directors’ assessment of going concern has considered the extent to which the Company’s ability to remain a going concern is inter-dependent with that of the Group. The Company has dependency with the Group in respect of provision of certain services, such as administrative services and should the Group be unable to deliver these services, the Company would have difficulty in continuing to trade.

Despite the Company being in a net liability the ultimate parent company, Capita plc, has stated that it will provide continuing financial support as necessary and to the extent it is able to do so during the going concern assessment period.

The Company’s financial projections are dependent on the Group providing additional financial support over the period the going concern period. Capita plc has indicated its intention to provide financial support to the Company in order to meet its liabilities as and when they fall due in the going concern assessment period.

As with any company placing reliance on other group entities for financial support, the Directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.

Given the reliance the Company has on the Group, the Directors have considered the financial position of the ultimate parent company as disclosed in its most recent condensed consolidated financial statements, being for the six months ended 30 June 2025.

Basis of preparation (continued)true

Ultimate parent undertaking – Capita plc

The Capita plc Board (‘the Board’) concluded that it was appropriate to adopt the going concern basis, having undertaken a rigorous assessment of the financial forecasts, key uncertainties, sensitivities, and mitigations when preparing the Group’s condensed consolidated financial statements at 30 June 2025. These condensed consolidated financial statements were approved by the Board on 4 August 2025 and are available on the Group’s website (www.capita.com/investors). Below is a summary of the position at 4 August 2025:

Accounting standards require that ‘the foreseeable future’ for going concern assessment covers a period of at least twelve months from the date of approval of the condensed consolidated financial statements, although those standards do not specify how far beyond twelve months a Board should consider. In its going concern assessment, the Board has considered the period from the date of approval of the condensed consolidated financial statements to 31 December 2026, which aligns with a period end and covenant test date for the Group.

The base case financial forecasts used in the Group going concern assessment are derived from the 2025-2026 business plan as approved by the Board in June 2025.

Under the base case scenario, the Group forecasts growth in revenue, profit and cash flow over the medium term. When combined with available committed facilities, this allows the Group to manage scheduled debt repayments. The most material sensitivities to the base case are the risk of not delivering the planned revenue growth and further efficiency savings being delayed or not delivered in accordance with the Group's previously announced cost reduction programme.

The base case projections used for going concern assessment purposes reflect business disposals completed up to the date of approval of the condensed consolidated financial statements. The liquidity headroom assessment in the base case projections reflects the Group’s existing committed financing facilities and debt redemptions and does not reflect any potential future refinancing. The base case financial forecasts demonstrate liquidity headroom and compliance with all debt covenant measures throughout the going concern period to 31 December 2026.

In considering severe but plausible downside scenarios, the Board has taken account of the potential adverse financial impacts resulting from the following risks:

• •    revenue growth falling materially short of plan;

• •    operating margin expansion not being achieved;

• •    targeted cost savings delayed or not delivered;

• •    unforeseen operational issues leading to contract losses and cash outflows;

• •    sustained interest rates at current levels;

• •    non-availability of the Group’s non-recourse trade receivables financing facility; and

• •    unexpected financial costs linked to incidents such as data breaches and/or cyber-attacks.

The likelihood of simultaneous crystallisation of the above risks is considered by the Board to be low. Nevertheless, in the event that simultaneous crystallisation were to occur, the Group would need to take action to ensure there is sufficient liquidity. In its assessment of going concern, the Board has considered the mitigations, under the direct control of the Group, that could be implemented including, but not limited to, reductions or delays in capital investment, and substantially reducing (or removing in full) bonus and incentive payments. Taking these considerations into account, the Group’s financial forecasts, in a severe but plausible downside scenario, demonstrate sufficient liquidity headroom and compliance with all debt covenant measures throughout the going concern period to 31 December 2026.

Basis of preparation (continued)

Adoption of going concern basis by the Group:

Reflecting the forecasts, coupled with the Board’s ability to implement appropriate mitigations should the severe but plausible downside materialise, the Group continued to adopt the going concern basis in preparing the condensed consolidated financial statements. The Board has concluded that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to 31 December 2026.

Conclusion

Although the Company has a reliance on the Group as detailed above, based on their enquiries with the Group’s Directors and the Company’s forecasts, even in a severe but plausible downside, the Directors are confident the Company will continue to have adequate financial resources to continue in operation and discharge its liabilities as they fall due over the period to 31 December 2026. Consequently, the financial statements have been prepared on the going concern basis.

The Company has applied FRS101 – Reduced Disclosure Framework in the preparation of its financial statements.

The Company has prepared and presented these financial statements by applying the recognition, measurement and disclosure requirements of international accounting standards in conformity with the requirements of the Companies Act 2006.

The Company's ultimate parent company, Capita plc, includes the Company in its consolidated statements. The consolidated financial statements are prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and with UK-adopted International Financial Reporting Standards ('UK-IFRSs') and the Disclosure and the Transparency Rules of the UK's Financial Conduct Authority. They are available to the public and may be obtained from Capita plc’s website on https://www.capita.com/investors.

In these financial statements, the Company has applied the disclosure exemptions available under FRS 101 in respect of the following disclosures:

•     A cash flow statement and related notes;

•     Disclosures in respect of capital management;

•     The effects of new but not yet effective IFRSs;

•     Certain disclosures as required by IFRS 15 ; and

•     Disclosures in respect of the compensation of key management personnel

Since the consolidated financial statements of Capita plc include equivalent disclosures, the Company has also taken the disclosure exemptions under FRS 101 available in respect of the following disclosure:

•     Certain disclosures required by IFRS 7 and certain disclosure exemptions as permitted by IFRS 13 Fair value measurement.

The Company has adopted the new amendments to standards detailed below but they do not have a material effect on the Company's financial statements.

Revenue is earned within the United Kingdom. The Company earns revenue from group entities by providing them consulting services.

The revenue and profits recognised in any period are based on the delivery of performance obligations and an assessment of when control is transferred to the customer.

Revenue is recognised either when the performance obligation in the contract has been performed (so 'point in time' recognition) or 'over time' as control of the performance obligation is transferred to the customer.

Principal versus agent

The Company has arrangements with some of its customers whereby it needs to determine if it acts as a principal or an agent as more than one party is involved in providing the goods and services to the customer. The Company acts as a principal if it controls a promised good or service before transferring that good or service to the customer. The Company is an agent if its role is to arrange for another entity to provide the goods or services. Factors considered in making this assessment are most notably the discretion the Company has in establishing the price for the specified good or service, whether the Company has inventory risk and whether the Company is primarily responsible for fulfilling the promise to deliver the service or good. This assessment of control requires judgement in particular in relation to certain service contracts. An example, is the provision of certain recruitment and learning services where the Company may be assessed to be agent or principal dependent upon the facts and circumstances of the arrangement and the nature of the services being delivered.

Where the Company is acting as a principal, revenue is recorded on a gross basis. Where the Company is acting as an agent revenue is recorded at a net amount reflecting the margin earned.

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax assets and unused tax losses can be utilised, except where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

The Company participates in the Social Housing Pension Scheme ('the Scheme') which has separate defined benefit and defined contribution sections. Benefits in the Scheme accrued on a defined benefit basis up to 31 March 2014 and on a defined contribution basis from 1 April 2014.

Responsibility for the operation and governance of the Scheme lies with a Trustee which is independent of the Company. The Trustee is required by law to act in the interest of the Scheme's beneficiaries in accordance with the rules of the Scheme and relevant legislation (which includes the Pension Schemes Act 1993, the Pensions Act 1995 and the Pensions Act 2004). The nature of the relationship between the Company and the Trustee is also governed by the rules of the Scheme and relevant legislation.

The assets of the Scheme are held in a separate fund (administered by the Trustee) to meet long-term pension liabilities to beneficiaries. The Trustee invest the assets in line with their Statement of Investment Principles, which is regularly reviewed.

The defined benefit section is funded. The Trustee of the Scheme commissions an actuarial valuation of the defined benefit section of the Scheme every three years. The main purpose of the valuation is to determine the financial position of the Scheme in order to address the level of future contributions required so that the Scheme can meet its pension obligations as they fall due. The defined benefit section of the Scheme is a non-segregated multi-employer scheme. Since the financial year ending 31 December 2019, the Trustees of the Scheme have developed a calculation tool enabling participating employers, such as the Company, to identify its share of assets and liabilities on a reasonable and consistent basis, and this tool, consistent with the financial years ending since 31 December 2019, has been used to determine the disclosures for the defined benefit section of the Scheme.

The costs of providing benefits under the defined benefit section of this Scheme is determined using the projected unit credit method, which attributes entitlement to benefits to the current period (to determine current service cost) and to the current and prior periods (to determine the present value of the defined benefit obligation) and is based on actuarial advice. Past service costs are recognised immediately in the income statement.

When a settlement (eliminating all obligations for benefits already accrued) occurs the obligation and related plan assets are re-measured using current actuarial assumptions and the resultant gain or loss recognised in the statement of profit and loss during the period in which the settlement occurs.

Remeasurements of the net defined benefit asset/liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income and reflected immediately in retained earnings and will not be reclassified to the income statement. The Company generally determines the net interest expense/income on the net defined benefit asset/ liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the period to the then net defined benefit asset/liability, taking into account any changes in the net defined benefit asset/liability during the period as a result of contributions and benefit payments. However, due consideration is made to events which require the net interest expense/income on the net defined benefit asset/liability to be re-measured over the course of the period.

Current and past service costs are charged to operating profit while the net interest cost is included within net finance costs. The liability on the balance sheet in respect of the defined benefit section of the Scheme comprise the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less any past service cost not yet recognised and less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information and in the case of quoted securities is the published bid price. The Company will consider the impact of IFRIC 14 (in relation to either recognising a surplus or allowing for the impact of any funding commitments made) and will make an assessment, having regard to the rules of the pension scheme, on whether IFRIC14 limits the surplus or increases the deficit shown at the balance sheet date.

The Company presents assets and liabilities in the balance sheet based on whether they are current or non-current.

An asset is current when it is:

• Expected to be realised or intended to be sold or consumed in the normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months after the balance sheet date; or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the balance sheet date.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in the normal operating cycle;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after the balance sheet date; or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the balance sheet date.

The Company classifies all other liabilities as non-current.

The preparation of financial statements in accordance with generally accepted accounting principles requires the directors to make judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the financial statements and the reported income and expense during the presented periods. Although these judgements and assumptions are based on the directors’ best knowledge of the amount, events or actions, actual results may differ.

The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows :

• Measurement of defined benefit pension obligations: The accounting cost of these benefits and the present value of pension liabilities involve judgements about uncertain events including such factors as the life expectancy of members, price inflation and the discount rate used to calculate the net present value of the future pension payments. The Company uses estimates for all of these factors in determining the pension costs and liabilities incorporated in the financial statements. The assumptions reflect historical experience and judgement regarding future expectations.

The charge for the year can be reconciled to the profit per the income statement as follows:

A change to the main UK corporation tax rate was substantively enacted on 24 May 2021. The rate applicable from 1 April 2023 increased from 19% to 25%. The deferred tax asset at 31 December 2024 has been calculated based on the 25% rate.

The Company participates in the Social Housing Pension Scheme ('the Scheme'), a multi-employer scheme which provides benefits to some 500 non-associated employers. The Scheme has a defined benefit section and a defined contribution section in the UK. The Scheme has over 65,000 members in the defined benefit section. Of these, 39 members (as at 30 September 2023) are linked to the Company.

The Scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK.

The last triennial valuation of the Scheme for funding purposes was carried out as at 30 September 2023. This valuation revealed a deficit of £693m. A Recovery Plan was put in place (effective from 1 April 2025) with the aim of removing this deficit by 31 March 2028. The Recovery Plan replaced the Recovery Plan put in place following the 30 September 2020 triennial valuation.

Following the completion of the 30 September 2023 triennial valuation, from 1 April 2025 the Company’s deficit contributions were revised to £497,213.44 per annum (increasing by 2.0% at each subsequent 1 April). Prior to 1 April 2025, the Company was paying contributions in accordance with the 30 September 2020 triennial valuation (and since 1 April 2024 were paying £485,747.48 per annum). The deficit contribution requirement will be reviewed as part of the triennial valuation currently due as at 30 September 2026.

The Company expects to contribute approximately £495,000 to the defined benefit section of the Scheme in the next financial year.

The Scheme is classified as a 'last-man standing arrangement'. Therefore, the Company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the Scheme. Participating employers are legally required to meet their share of the Scheme deficit on an annuity purchase basis on withdrawal from the Scheme.

For accounting purposes, an actuarial valuation for the defined benefit section of the Scheme was carried out with an effective date of 30 September 2023. The liability figures from this valuation are rolled forward to the relevant accounting date and are used in conjunction with the Company’s fair share of the Scheme’s total assets to calculate the Company’s net deficit or surplus at the accounting period start and end dates. These are set out below under the heading defined benefit section of the Scheme. Benefits in the Scheme were accrued on a defined benefit basis up to 31 March 2014 and on a defined contribution basis from 1 April 2014.

The pension charge for the defined contribution section of the Scheme for the year is £58,643 (2023: £6,010).

Risks associated with the defined benefit section of the Scheme

The defined benefit section of the Scheme exposes the Company to various risks, with the key risks set out below:

Investment risk: If the invested assets under-perform the returns assumed in setting the funding target then additional contributions may be required at subsequent valuations.

Interest rate risk: the discount rate is derived based on the yields available on good quality corporate bonds of suitable duration. If these yields decrease, then in isolation, this would increase the value placed on the defined benefit obligation and result in a worsening of the funding position of the section.

Inflation risk: the liabilities of the section are linked to future levels of inflation. If future inflation is higher than expected then this would result in the cost of providing the benefits increasing and thereby worsening the funding position of the section.

Longevity risk: if members live longer than expected, then pensions will be paid for a longer time which will increase the value placed on the liabilities and therefore worsen the funding position of the section.

In order to manage these risks, the Company and the trustees carry out regular assessments of these risks.

The average monthly number of employees (including directors) were:

Their aggregate remuneration comprised:

All Directors are paid by other companies within the Capita Group. The Company has not paid any fees or other remuneration to the Group based Directors related to the directorship role they provided to the Company as a part of their Group-wide executive management role. The Company has estimated that allocation of the qualifying services that these Group based Directors provided to the Company is inconsequential.

The Company's immediate parent company is Capita Business Services Ltd, a company incorporated in England and Wales.

The Company's ultimate parent company is Capita plc, a company incorporated in England & Wales. The financial statements of Capita plc are available from its registered office at First floor, 2 Kingdom Street. Paddington, London, England, W2 6BD.

There are no significant events which have occurred post the reporting date.