The directors present their strategic report and financial statements of Plascoat Systems Limited ("the company") for the year ended 31 December 2024. The company is part of the international group headed by Axalta Coating Systems Ltd ("Axalta group").

The financial statements present information about the company as an individual undertaking and not about the group that it heads. The company has not prepared group financial statements as it is exempt from the requirement to do so by section 401 of the Companies Act 2006, as it is a subsidiary of another company which prepares consolidated financial statements which are publicly available (note 21). These financial statements therefore present information about the company as an individual undertaking and not as a group.

The principal activity of the company continued to be that of compounding and grinding, along with the manufacture of thermoplastic coatings.

The company reflected a pre-tax loss for the year of £315k (2023: loss of £551k) which represented an improvement in results. The financial performance of the company for the year is set out in the profit and loss account on page 11, the position of the company at the year end is set out in the balance sheet on page 13 and in the related notes on pages 15-30.

The company’s key measurement of the effectiveness of its operations is the gross and operating profit margin achieved. Turnover is also an important financial KPI for the business. The company’s turnover saw an increase of 6% year on year, reporting £12.7m in the current year compared to £12m reflected in the prior year. The main driver being the strong development of the Middle East Market via Axalta group's local network in addition to last year business’s decision to transfer some large batch production / customers to its sister facility in the Netherlands. The Netherlands operation is predominantly designed to support large batch production and consequently allows the business to manufacture in a more cost effective manner. This transfer has allowed the company to focus on small batch customers, resulting in growth during the current year. We see a big growth on the Intercompany Business, servicing the Middle East Region for the Fencing business (+70% of volume vs. 2023) and a growth exceeding 15% for the Asian Market.

Gross margin increased year on year by 1.5% , the current year being 11.6% and the prior year 10.1%. This increase in margin was due to a number of contributing factors, the main cause being positive product mix impact and the implementation of selling price increases last year. Improvements in the operating loss year on year is a reflection of the improved gross margin coupled with consistent overheads year on year.

The company's net asset position as at 31 December 2024 is £4.8m (2023: £4,92m), which is reduced on the prior year due to the current year retained loss. There was a reduction in net current assets of £1.6m year on year which reflects further working capital investment coupled with timing. The company's defined benefit pension scheme liability continues to reduce.

The company continues to explore opportunities in key strategic markets and geographic areas supported by the Axalta group global business team. The opportunities will be for the Freeze Ground products; Abcite 2060 (sold to IBIX IT / export to USA), KBO/Fisatec/CoatinQ projects for solar panel frames, successful Applicoat introduction at B/S/H/ and continued growth of PPA 742ES, the TP Primer used in combination with the Axalta Powder Coating technology.

At the same time we are seeing investments in the Zuidland plant; masterbatch line finished and testing is ongoing and a new Freeze Grinding mill to be installed during H2_25 – this should bring some relieve in the production.

Key performance indicators

The company's key financial performance indicators are considered to be turnover, gross margin, operating result, pre-tax result and net assets, which are monitored on a monthly basis. The company also monitors business performance via a number of non-financial key performance indicators which include plant utilisation / efficiency and On Time in Full, which is above 98%, as some of the key non-financial measures.

The directors are of the opinion that the company has adopted a thorough risk management process that involves the formal review of all the risks identified below. The board monitors and reviews risks on a regular basis, in order to mitigate each risk area.

Cash flow risk

The company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates. Where feasible, the company seeks to naturally hedge itself by matching foreign currency receipts and payments, to mitigate foreign currency exchange rate risk.

Credit risk

The company's principal financial assets are bank balances (Axalta group cash pool arrangement), trade and other receivables and investments. An allowance for impairment is made where there is an identified loss event, which based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

The credit risk on liquid funds is limited because the counterparties are banks with credit ratings assigned by international credit rating agencies.

The company has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.

The directors consider the recoverability of the company's subsidiary investments and seek to ensure they trade profitably, with a focus on returning value to the shareholder. They do this through oversight and providing support to subsidiary management as required.

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company monitors the timing of cash flows and aligns this with its strategic planning. Forecasts are produced to assist management in identifying liquidity requirements and maintaining adequate resources.

Price risk

The company has exposure to rises in commodity items that are used to manufacture its products, in particular the coating powders. However, to mitigate this, the company endeavours to link customer pricing to indices so that major changes in price movements are mitigated. As a significant user of energy in its business the company enters into forward purchasing arrangements where possible to ensure that costs are contained within acceptable tolerances.

Management of the company's defined benefit pension scheme liability

The company has a defined benefit scheme, with an existing liability, which is recorded on the company's balance sheet. The liability depends on a number of actuarial assumptions from the directors and due to the long-term nature of the scheme, the assumptions create an estimate which can be subject to a level of uncertainty. In order to mitigate this risk, the directors work closely with the pension scheme trustee and actuaries to understand existing current and future market data when agreeing assumptions. The scheme is also closed to new members which limits the company's financial exposure. As disclosed within note to the financial statements, the company has agreed a recovery plan with the pension scheme trustee, designed to clear the existing liability over a specific future period.

Ongoing inflationary pressures will continue to be a key focus for the company's management team. Axalta group’s global procurement team will play a major role in supporting the business and mitigating (where possible) material and fixed cost inflation.

The directors are aware of their duty under s.172 of the Companies Act 2006 to act in the way which they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole and, in doing so, to have regard (amongst other matters) to:

• The likely consequences of any decision in the long term;

• The interests of the company’s employees;

• The need to foster the company’s relationships with suppliers, customers and others;

• The impact of the company’s operations on the community and the environment; and

• The desirability of the company maintaining a reputation for high standards of business conduct.

The directors work to promote the success of the company, by considering the impact that their decisions may have on the company, along with the company’s stakeholders. The issues and factors which have guided the directors’ decisions are outlined in the ‘review of business’ and the ‘principal risks and uncertainties’ sections within this report.

Reputation is of key importance to the company and the directors who always consider reputational impact in taking decisions and encourages high standards of business conduct.

The company’s key stakeholders include, but are not limited to:

• Employees;

• Customers;

• Suppliers; and

• Local communities and environment in which the company is based

The directors of the company promote good governance, which is key to drive the success of the company. The directors also aim to achieve the overall strategic objectives of the Axalta group, as well as continuing good relationships with all key stakeholders who are critical to the long-term success of the company.

Having regard to employees’ interests

The board attaches great importance to the skills and experience of the management and employees of the company. Its aim is to retain the best talent and believes that they will benefit from the opportunities within the company. Opportunities for further professional and career development are on offer for employees through relevant training courses and qualifications.

The board is committed to consulting, as appropriate, with relevant employees and employee representatives on a regular basis and has worked hard to ensure effective communication with all employees during the year.

The company has a number of initiatives including a commitment to create a working environment where everyone has the opportunity to learn, develop and contribute to the success of the company, whilst working within a common set of values. Regular updates on business performance KPIs through various channels are provided and an element of employee reviews is linked to the financial success of the company, amongst other appraisal criteria. In addition, appropriate whistleblowing procedures are available that employees are comfortable using.

Fostering business relationships

The company aims to be to the first choice for customers’ needs, enabling them to enjoy the full value of their relationship with the business. The company builds long term customer relationships by providing unrivalled levels of service and an offering which is unmatched in its flexibility. We maintain strong relationships across our supply chain through regular contact and meetings with our suppliers. We encourage our customers and suppliers to raise any issues or concerns they have over their relationship with the company, incorporating all aspects (legal, commercial, operational etc.) and offering dedicated points of contact within our team to provide the building of long-term business relationships.

These relationships contribute to the company’s competitive advantage. They not only enable us to execute our strategy efficiently, but also help customers and suppliers plan their business, managing cash flow and production. The company also engages actively with suppliers to make sure they fully comply with our code of conduct for suppliers and partners, which includes provisions on human rights and environmental standards.

Impact on community and environment

The company values the communities in which it operates, and its aim is for its business activities to have a positive impact on them.

The company will continue to promote green technology and initiatives to protect our environment, as well as being a contributor to the economies it operates in. We continue to seek to reduce the environmental impact of our business. The business is committed to delivering a corporate social responsibility strategy that sets the overall aim to be environmentally responsible, a good neighbour and a great place to work

Maintaining high standards of business conduct

The directors are committed to operating the company in a responsible manner, operating with high standards of business conduct and good governance.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

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

The results for the year are set out on page 12.

No interim dividends were paid (2023: £nil). The directors do not recommend payment of a final dividend (2023: £nil).

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion, they have prepared trading forecasts for the period to 31 December 2026 and are satisfied that the company has sufficient financial resources to continue to operate and meet its liabilities as they fall due, for a period of at least 12 months from the date of signing these financial statements. It is noted that the company is a member of the Axalta group cash pool arrangement meaning that additional funds can be made available to the company as and when required. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The company has considerable financial resources and prospects for the future. The directors expect the company to continue to be cash generative and further develop its business and customer base, with the support and assistance of the Axalta Coating Systems Ltd group.

Financial risk management objectives and policies

The company's activities expose it to a number of financial risks including cash flow, credit, liquidity and price risks. These specific risks, their impact on the company and how the directors mitigate these risks are dealt with as part of the Strategic Report and form part of this report through cross-reference.

Johnston Carmichael LLP have indicated their willingness to be reappointed for another term and appropriate arrangements have been put in place for them to be deemed reappointed as auditors in the absence of an Annual General Meeting.

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.

Although the group of which the company heads is large, this is due to its trading subsidiaries being non-UK based. The company itself is medium sized and as such is exempt from reporting on energy and carbon.

The directors are responsible for preparing the strategic report, 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 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 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;

• 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 Plascoat Systems Limited (the 'company') for the year ended 31 December 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 2024 and of its loss 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 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 and financial statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report and financial statements. 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 our 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 and 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 set out on page 7, 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 for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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, 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 assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

We obtained an understanding of the legal and regulatory frameworks that are applicable to company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

• UK Generally Accepted Accounting Practice

• Companies Act 2006

• UK Tax Legislation

• Health and Safety and Environmental Protection Legislation

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

We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of relevant correspondence with regulatory bodies.

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:

• Management override of controls

• Revenue recognition

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

• Performing audit work procedures confirming the completeness of revenue recognised in the financial statements by testing the operative effectiveness of related controls and tracing a sample of sales from point of initiation through to sales ledger, including performing appropriate cut-off procedures at year end;

• Making enquiries of management and those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;

• Reviewing the level of and reasoning behind the company’s procurement of legal and professional services;

• Reviewing key documentation confirming ongoing compliance with health, safety and environmental requirements;

• Performing audit work procedures over the risk of management 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 judgements made by management in their calculation of accounting estimates for potential management bias;

• Completion of appropriate checklists and use of our experience to assess the company’s compliance with the Companies Act 2006; and

• Agreement of the financial statement disclosures to supporting documentation.

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, 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 intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed 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 are to become aware of it.

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.

The profit for the year is solely attributable to the shareholder of the company's immediate parent.

Plascoat Systems Limited ("the company") is a private company limited by shares incorporated and domiciled in England and Wales. The registered office is Farnham Trading Estate, Farnham, Surrey, GU9 9NY. The company's trading address is that of the registered office. The principle activities of the company and the nature of its operations are set out in the Strategic Report on page 1.

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. The principal accounting policies adopted are set out below.

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

• The requirements of Section 7 'Statement of Cash Flows' and paragraph 3.17(d) of Section 3 'Financial Statement Presentation';

• The requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c) of Section 11 'Basic Financial Instruments; and

• The requirements of paragraph 33.7 of Section 33 'Related Party Disclosures'.

The financial statements of the company are consolidated in the financial statements of Axalta Coating Systems Ltd. These consolidated financial statements are available from the group's website (www.axalta.com).

The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion, they have prepared trading forecasts for the period to 31 December 2026 and are satisfied that the company has sufficient financial resources to continue to operate and meet its liabilities as they fall due, for a period of at least 12 months from the date of signing these financial statements. It is noted that the company is a member of the Axalta group cash pool arrangement meaning that additional funds can be made available to the company as and when required. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods 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.

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.

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

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

Assets under construction are not depreciated until the asset is complete and brought into operational use, at which point it will be transferred to the appropriate asset class and depreciated.

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

Interests in subsidiaries 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 profit or loss.

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.

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.

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

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

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

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is measured on a weighted average cost basis. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

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

Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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

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

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

Basic financial assets, which include certain debtors, amounts owed by fellow group companies 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. The effective interest rate is the rate that exactly discounts estimated future cash receipts/payments through the expected life of the investment to the net carrying amount on initial recognition. Financial assets classified as receivable within one year are not amortised.

Financial assets are assessed for indicators of impairment at each reporting end date.

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

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

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

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

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

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

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

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

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

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

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

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

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

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

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

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

Defined contribution scheme

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments on the balance sheet.

Defined benefit scheme

The company operates a defined benefit pension scheme which is closed to new members.

For defined benefit schemes the amounts charged to operating profit are the costs arising from employee services rendered during the period and the cost of the plan introduction, benefit changes, settlements and curtailments. They are included as part of staff costs. The net interest cost on the net defined pension liability is charged to the profit or loss and included within finance costs. Remeasurement comprising actuarial gains and losses and the return on the scheme assets (excluding amounts included in net interest on the defined benefit liability) are recognised immediately in other comprehensive income.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in the profit or loss as other finance revenue or cost.

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), 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 value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

Defined benefit schemes are funded, with the assets of the scheme held separately from those of the company, in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date.

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.

Rentals payable under operating leases, including any lease incentives received, are charged to income 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 lease 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 are considered to be either judgements that have had the most significant effect on the amounts recognised in the financial statements, or estimates that are dependent upon assumptions which could change in the next financial year and have a material effect on the carrying amounts of the assets and liabilities recognised at the balance sheet date:

Allocation of overheads included in stock and stock provisions are judgements made by management (note 12). The directors assess the overheads to be included in stock and calculate these in accordance with their judgement.

Accounting for the company's defined benefit scheme involves judgements about uncertain events including estimating retirement dates, salary levels at retirement, mortality rates, determination of discount rates for measuring plan obligations and net interest expense and assumptions for inflation rates. The assumptions used are reviewed by the directors at each period end. These assumptions are used by the scheme actuary to determine the projected benefit obligations at the period end and hence surpluses and deficits are recorded. The assumptions used are provided in note 16.

The directors consider that there are no other judgements or estimates which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.

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 directors of the business are remunerated through other group companies with respect to their services to this company for both the current and prior year.

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

In addition to the amount charged to profit or loss, the following amounts relating to tax have been recognised directly in other comprehensive income:

Details of the company's subsidiaries at 31 December 2024 are as follows:

Registered office addresses (all UK unless otherwise indicated):

(*) The shares in this company are held by Plascoat Holdings Limited.

(**) The shares in this company are held by Plastic Coatings Holdings BV.

(***) The shares in this company are held by Plascoat Inc.

Amounts owed by group undertakings have no fixed repayment terms, are unsecured and are interest free.

Within amounts owed to group undertakings, £40k (2023: £1.2m due from the Axalta group cashpool) is due to the Axalta group cashpool arrangement which has no fixed repayment terms, is unsecured and accrues interest at a market rate. The remaining amount has no fixed repayment terms, is unsecured and is interest free.

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. No pension contributions were outstanding at the current and prior year end.

The company sponsors the Grosvenor Pension Fund, a funded defined benefit pension scheme in the UK. The scheme is set up on a tax relieved basis as a separate trust independent of the company and is supervised by an independent trustee. The trustee is responsible for ensuring that the correct benefits are paid, that the scheme is appropriately funded and that the scheme assets are appropriately invested.

The trustee is required to use prudent assumptions to value the liabilities and costs of the scheme, whereas the accounting assumptions must be best estimates.

The company has agreed a recovery plan with the trustee. The aim of the recovery plan is that the shortfall will be made up by 31 May 2029 and will include additional employer contributions paid to the scheme as follows:

• £1,283,088 per annum, payable in equal monthly instalments. These payments are to be increased each January by 3.0% per annum. The next such increase will apply from 1 January 2025 (i.e. the £105,294 per month will increase to £110,132 per month).

A formal actuarial valuation was carried out as at 1 April 2024. The results of that valuation have been projected to 31 December 2024 with allowance for the payroll and benefit information which have been provided and using the assumptions set out below. The figures in the following disclosure were measured using the Defined Accrued Benefit Method.

Assumed life expectations on retirement at age 65:

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

Movements in the present value of defined benefit obligations

The defined benefit obligations arise from plans which are wholly or partly funded.

Movements in the fair value of plan assets

Fair value of plan assets at the reporting period end

The share premium account represents the excess amount received by the company over the par value of its shares.

Profit and loss reserves

The profit and loss account represents cumulative realisable profits and losses.

Other reserves

Other reserves comprises a capital contribution from the ultimate part as part of its initial investment in the company.

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

The company has taken advantage of the exemption available in accordance with section 33 of FRS 102 'Related Party Disclosures' not to disclose transactions entered between two or more wholly owned members of the same group.

The company is a wholly owned subsidiary of Axalta Coating Systems UK Holding Limited, a company registered in England and Wales. Its ultimate parent company is Axalta Coating Systems Ltd, a company incorporated in Bermuda, which the directors consider to be the controlling party. Axalta Coating Systems Ltd represents the largest and smallest group which prepares consolidated financial statements. A copy of the Axalta Coating Systems Ltd group financial statements is available from the group's website (www.axalta.com).