The Directors present their Strategic report and financial statements for the year ended 31 December 2024.

Fire Service College 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 Company operates within the Capita Public Service division of the Group.

The principal activity of the Company continues to be that of providing training for the fire and rescue services (FRSs), emergency responders and a wide spectrum of commercial and public sector clients globally.

As shown in the Company’s income statement on page 10, the Company's revenue has increased from £20,946,628 in 2023 to £21,582,231 in 2024, reflecting a period of steady growth. Despite this increase in revenue, the Company's operating loss has increased from £888,473 in 2023 to £971,661 in 2024. This increase in operating loss is primarily attributable to higher depreciation expenses incurred during the year.

The balance sheet on pages 11 to 12 of the financial statements shows the Company's financial position at the year end. Net liabilities have increased from £13,598,314 in 2023 to £14,973,003 in 2024 on account of losses incurred by the Company during the year. Details of amounts owed by/to its parent company and fellow subsidiary companies are shown in notes 9 and 11 to the financial statements.

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

Key financial performance indicators used by the Group are adjusted revenue, adjusted operating profit, adjusted operating margin, adjusted basic/diluted earnings per share, free cash flow excluding business exits, and gearing ratios. Capita plc and its subsidiaries manage their operations on an operating segment or divisional basis or at Group level and as a consequence, some of these indicators are monitored only at an operating segment, division or Group level. The performance of the Capita Public Service division of the Group is discussed in the Group’s annual report which does not form part of this report.

The Company is exposed to a wide range of risks that, should they materialise, could have a detrimental impact on financial performance, reputation or operational resilience. The Company’s risk management framework provides a consistent approach to the identification, assessment, monitoring and reporting of risks and opportunities. The risk management process is based on risk registers and risk reporting at the established risk governance committees. Key risks are documented in the risk registers and have assigned risk owners who review them regularly, and report on them on at least a half-yearly basis at divisional and functional risk governance committees, Executive risk and Ethics Committee and Audit and Risk Committee. The effectiveness of existing controls is evaluated by the Company to determine whether any further mitigating actions are needed to manage the risk level to within the risk appetite set by the Capita plc Board.

The principal risks for the Company are:

Profitable growth

Attract new clients and retain existing clients on appropriate commercial terms.

Contract performance

Deliver services to clients in line with contractual and legal obligations.

Innovation

Innovate and develop new customer value propositions with speed and agility.

People attraction and retention

Attract, develop, engage and retain the right talent.

Financial stability

Our ability to maintain financial stability and achieve financial targets.

Cyber security

Protect our systems, networks and programs from unauthorised use and access.

Environment, social and governance

Comply with regulatory and contractual requirements to drive a purpose driven organisation with the right focus on governance.

Safety and health

Protect the safety, health and duty of care of all the Company’s employees, the people we work with and those affected by our acts and omissions.

Data governance and data privacy

Manage our data effectively (both clients and the Company's) as a strategic asset across the organisation.

As a subsidiary of Capita plc, the Company is subject to controls and risk governance techniques applied across all the Group's businesses. Details of the specific risk assessments and mitigating actions are outlined on pages 70-74 of the Group's 2024 Annual Report.

Our people

Why they are important

They deliver our business strategy; they support the organisation to build a values-based culture; and they deliver our products and services ensuring client satisfaction.

What matters to them

Flexible working; learning and development opportunities leading to career progression; fair pay and benefits as a reward for performance; and two-way communication and feedback.

How we engaged

• People surveys

• Regular all-employee communications

• Via Nneka Abulokwe, our designated non-executive director for colleague engagement who has visited businesses in the UK and South Africa

• Employee focus groups and network groups

• Workforce engagement on remuneration

Topics of engagement

• Creating an inclusive workplace

• Health and wellbeing

• Speak Up policy

• Directors’ remuneration and pay at Capita

• Acting on survey feedback

• The career path framework

• Our cultural programme

• Annual salary review

Outcomes and actions

The 2024 employee survey showed a decrease in the eNPS compared with 2023. Although disappointing, we recognise that this reflected the difficult decisions that the Company had to make during the year to ensure the long-terms sustainability and success of the Company, including the decision not to remain as a real living wage employer. Survey feedback was positive in relation to manager support and belonging with 80% of respondents stating that their manager helps them to succeed while 60% of respondents feel a sense of belonging at Capita.

We are developing and delivering a range of action plans, including ensuring our leaders feel confidence in, and ownership of Capita’s strategy, plans and successes, developing inclusive opportunities for internal career mobility.

We have mobilised a multi-year programme to rally, reset and embed our culture engaging over 250 Culture Accelerators globally to drive the change. Focused on bringing together our senior leadership team through the launch of our Leadership Playbook, mandating Management & Leadership development, refreshing our values to launch in Q2 2025 and creation of an employee playbook.

In October 2024, Capita was recognised by Forbes, as being one of the top companies for women for the second consecutive year, ranking at number 36 out of 400 global companies on the prestigious list.

Our 2024 gender pay gap figures showed improvement compared to 2023, resulting in a median of 14.91% (0.49% down from 15.40%) and a mean of 18.40% (0.39% down from 18.79%). Since we started reporting in 2017, we have reduced our gender pay gap by 10.39%, from 25.30% to 14.91%.

Moving Ahead, Capita’s mentoring programme, offers cross-company mentoring which aims to build a pipeline for talented individuals from under-represented backgrounds within the workplace. Capita was awarded ‘Most Dynamic Mentoring Organisation’ in 2023 and 2024 at the Inspired by Mentoring Awards in recognition of our commitment to mentoring.

We continued to promote our Speak Up policy throughout the organisation.

Risks to stakeholder relationship

• Our ability to retain and develop people, impacting our quality of service and our financial performance

• Our ability to evolve our culture and practices in line with our responsible business agenda

Key metrics

Voluntary attrition, eNPS, employee engagement Index and people survey completion level.

Clients and customers

Why they are important

They are recipients of Capita’s services; and Capita’s reputation depends on consistent and timely delivery of the services they need from us.

What matters to them

High-quality service delivery; delivery of transformation projects within agreed timeframes; and responsible and sustainable business credentials.

How we engaged

• Regular client meetings, monthly or quarterly business reviews and surveys

• Regular meetings with government stakeholders and annual review with the Cabinet Office

• Through our customer advisory boards

• Through our senior client partner programme which provides an experienced single point of contact for key clients and customers

• Introductory meetings and correspondence with the new CEO, and ongoing meetings with Divisional CEOs, Public Service and Experience

Topics of engagement

• Current service delivery, continuous improvement initiatives and operational excellence

• Transition and mobilisation of services

• Capita’s digital and gen AI transformation capabilities, such as agent suite and Capita contact

• Possible future services, market and client needs

• Co-creation of client value propositions in collaboration with our hyperscaler partners, AWS, Salesforce, Microsoft and Service Now

• Ongoing benefits of hybrid working, near and off-shore capabilities on client services

Outcomes and actions

Feedback provided to business units to address any issues raised; client value proposition teams supporting divisions with co-creation ideas; direct customer and sector feedback; and senior client partner programme undertaking client-focused growth sprints and account plans to build understanding of client issues and ideas to help address them.

Risks to stakeholder relationship

• Loss of business by not providing the services that our clients and customers want

• Damage to reputation by not delivering to the requirements of our clients and customers

• Loss of customers for our clients

Key metrics

Customer NPS; specific feedback on client engagements.

Suppliers and partners

Why they are important

At Capita, our suppliers and partners including leading hyperscalers, play a pivotal role in delivering our purpose. By collaborating with organisations that share our values, we maintain high standards, ensure operational excellence, and achieve outcomes aligned with our social, economic, and environmental commitments. Our partnerships, particularly with hyperscalers including AWS, Microsoft, and ServiceNow, enhance our ability to innovate and deliver cutting-edge digital solutions.

We will continually review our supply base to ensure it delivers better outcomes for customers while addressing the need to reduce supply chain complexity and improve service quality.

What matters to them

• Transparent and fair procurement processes

• Collaboration on joint initiatives that drive innovation and foster long-term partnerships

• Reliable and timely payment terms

• Shared commitment to sustainability, resilience, and compliance with Science-Based Targets (SBTs) backed approach to net zero

• Provision of a safe working environment for anyone affected by Capita businesses while upholding the highest standards of ethical conduct in all endeavours

• Partnering with diverse suppliers that bring innovation, disruptive technologies and positively impact local communities

• Maintaining availability, integrity and confidentiality of our business relationships and the systems that support them, remaining resilient through periods of disruption

How we engaged

• Strategic collaboration with hyperscalers: including regular engagement with AWS, Microsoft and ServiceNow focused on co-creating solutions for Capita’s clients, integrating advanced AI and cloud capabilities into our offerings

• Innovation forums: by conducting joint workshops with hyperscalers to align on product roadmaps and explore new technologies that enhance the customer experience

• Performance reviews: by ongoing performance assessments to ensure value delivery and alignment with Capita’s strategic goals

• Sustainability partnerships: collaborating with hyperscalers to assess and mitigate the environmental impact of cloud-based operations, contributing to the reduction of Capita’s Scope 3 carbon footprint

• Engagement reviews: regular supplier meetings, ensuring openness throughout the source to procure process complete with in-life feedback questionnaires and risk assessments

Topics of engagement

• New technology and GenAI offerings suitable for both Capita and Capita-customer use

• Supplier payments

• Sourcing requirements and bid opportunities

• Supplier performance monitoring

• Supplier charter commitments

• Partnering opportunities

• Joint development of AI powered customer service tools

• Deployment of cloud-native platforms to modernise public and private sector operations

• Commitment to sustainability, including carbon footprint transparency and initiatives to meet net zero goals

• Enhancing cybersecurity standards across partner ecosystems to safeguard stakeholders

Outcomes and actions

Our supplier charter, which is available on our website, remains at the core of strengthening our commitments and sets out how we conduct business in an open, honest and transparent manner, and what we expect of our suppliers. We want to work with suppliers and supply chain partners that share our values and help us deliver our purpose, to create better outcomes. This includes the provision of safe working conditions, treating workers with dignity and respect, acting ethically and being environmentally responsible.

As part of our commitments as a responsible business, Capita manages and monitors a variety of supply chain related metrics including sustainability, spend with SMEs, VCSE’s and diverse-owned businesses and modern slavery risk.

To understand Capita’s Scope 3 carbon footprint, a supplier engagement programme was also undertaken with suppliers accounting for £1bn annual spend (over 50% of the supply chain by spend) to ask them to disclose their carbon emissions to CDP.

Risks to stakeholder relationship

• Evolving regulatory and environmental requirements

• Maintaining shared commitments to transparency and sustainability

• Maintaining resilience in the supply chain and partner ecosystems

Key metrics

90% of supplier payments within agreed terms; SME spend allocation; and supplier diversity profile.

Society

Why they are important

Capita is a provider of key services to government impacting a large proportion of the population.

What matters to them

Social mobility; youth skills and jobs; community engagement; diversity and inclusion; climate change; business ethics; accreditations and benchmarking; and cost of living crisis.

How we engaged

• Membership of non-governmental organisations

• Charitable and community partnerships

• External accreditations and benchmarking

• Working with clients, suppliers, and the Cabinet Office

Topics of engagement

• Youth employment

• Workplace inequalities

• Diversity & inclusion

• Climate change

• Community engagement

Section 172 (continued)

Outcomes and actions

Youth and employability programme such as Social Shifters; ranked 36 on the Forbes Global list of top employers for women; our pay gap has improved by 10.39% since we began reporting, awarded Employer’s Network for Equality and Inclusion, achieved a silver Tidemark, Armed Forces Covenant Gold Employer Recognition Award and an A CDP (Carbon Disclosure Project) score as a bronze medal by EcoVadis for Capita plc.

On behalf of the Board

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

The results for the year are set out on page 10.

No dividend was 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 an 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. Such qualifying third-party indemnity provisions 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 Company recognises the importance of its environmental responsibilities, monitors its impact on the environment, and designs and implements policies to reduce any damage that might be caused by the it’s activities. The Company operates in accordance with Group policies, which are described in the Group’s 2024 annual report that does not form part of this report. Initiatives designed to minimise the Company’s impact on the environment include safe disposal of waste, recycling and reducing energy consumption.

Employees

Details of the number of employees and related cost can be found in note 15 to the financial statements.

The Directors are responsible for preparing the Strategic report, 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.

In accordance with s414c(11) of the Companies Act 2006, the Company has set out certain information in its Strategic report that is otherwise required to be disclosed in the Directors' report. This includes information regarding results and activities and a description of the principle risks and uncertainties facing the Company.

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

The notes and information on pages 14 to 30 form an integral part of these financial statements.

The notes and information on pages 14 to 30 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 of the Companies Act 2006.

The balance classified as share capital is the nominal proceeds on issue of the Company's equity share capital, comprising one ordinary share of £1.

Represents net losses accumulated in the Company.

The notes and information on pages 14 to 30 form an integral part of these financial statements.

Fire Service College Limited is a Company incorporated and domiciled in the United Kingdom.

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 the following:

• 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;

• participation in the Group’s notional cash pooling arrangements, of which £18,860,964 was advanced at 31 August 2025. In the event of the cash being required elsewhere in the Group, the Company may not be able to access this facility;

• additional funding that may be required if the Company suffers potential future losses; and

• revenue from other Group entities and key contracts that may be terminated in the event of a default by the Group.

Despite the Company being in a net current liability and is loss making, 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.

Ultimate parent company – 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 profit 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 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.

Adoption of going concern basis in the Group financial statements :

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 Groups' 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;

•     Comparative period reconciliations for share capital, tangible fixed assets and intangible assets;

•     Disclosures in respect of transactions with wholly owned subsidiaries;

•     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 2 in respect of Group settled share based payments;

•     Certain disclosures required by IAS 36 Impairment of Assets in respect of the impairment of goodwill, indefinite life intangible assets and investment in subsidiaries; and

•     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.

The Company operates a diverse range of businesses and accordingly applies a variety of methods for revenue recognition, based on the principles set out in IFRS 15.

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’ when control of the performance obligation is transferred to the customer.

For all contracts, the Company determines if the arrangement with a customer creates enforceable rights and obligations. This assessment results in certain Master Service Agreements ('MSAs') or frameworks not meeting the definition of a contract under IFRS 15 and as such the individual call-off agreements, linked to the MSA, are treated as individual contracts.

The Company enters into contracts which contain extension periods, where either the customer or both parties can choose to extend the contract or there is an automatic annual renewal, and/or termination clauses that could impact the actual duration of the contract. Judgement is applied to assess the impact that these clauses have when determining the appropriate contract term. The term of the contract impacts both the period over which revenue from performance obligations may be recognised and the period over which contract fulfilment assets and capitalised costs to obtain a contract are expensed.

For contracts with multiple components to be delivered, for example transformation; transitions and the delivery of outsourced services; management applies judgement to consider whether those promised goods and services are:

•     distinct – to be accounted for as separate performance obligations;

•     not distinct – to be combined with other promised goods or services until a bundle is identified that is distinct; or

•     part of a series of distinct goods and services that are substantially the same and have the same pattern of transfer to the customer.

At a contract's inception the total transaction price is estimated, being the amount to which the Company expects to be entitled and has rights to under the contract. This includes an assessment of any variable consideration where the Company’s performance may result in additional revenues based on the achievement of agreed Key Performance Indicators ('KPIs'). Such amounts are only included based on the expected value or the most likely outcome, and only to the extent that it is highly probable that no revenue reversal will occur.

The transaction price does not include estimates of consideration resulting from change orders for additional goods and services unless these are already agreed.

Once the total transaction price is determined, the Company allocates this to the identified performance obligations in proportion to their relative stand-alone selling prices and recognises revenue when (or as) those performance obligations are satisfied.

The Company infrequently sells standard products with observable stand-alone prices due to the specialised services required by clients and therefore the Company applies judgement to determine an appropriate standalone selling price. More frequently, The Company sells a customer bespoke solution, and in these cases the Company typically uses the expected cost-plus margin or a contractually stated price approach to estimate the stand-alone selling price of each performance obligation.

The Company may offer price step downs during the life of a contract, but with no change to the underlying scope of services to be delivered. In general, any such variable consideration, price step down or discount is included in the total transaction price to be allocated across all performance obligations unless it relates to only one performance obligation in the contract.

For each performance obligation to be recognised over time, the Company applies a revenue recognition method that faithfully depicts the Company’s performance in transferring control of the goods or services to the customer. This decision requires assessment of the real nature of the goods or services that the Company has promised to transfer to the customer. The Company applies the relevant output or input method consistently to similar performance obligations in other contracts.

If performance obligations in a contract do not meet the overtime criteria, the Company recognises revenue at a point in time when the service or good is delivered.

Deferred and accrued income

The Company’s customer contracts include a diverse range of payment schedules dependent upon the nature and type of goods and services being provided. This can include performance-based payments or progress payments as well as regular monthly or quarterly payments for ongoing service delivery. Payments for transactional goods and services may be at delivery date, in arrears or part payment in advance. Our long-term service contracts tend to have higher cash flows early on in the contract to cover transformational activities.

Where payments made to date are greater than the revenue recognised to date at the period end date, the Company recognises a deferred income contract liability for this difference. Where payments made are less than the revenue recognised at the period end date, the Company recognises an accrued income contract asset for this difference.

At each reporting date, the Company assesses whether there is any indication that accrued income assets may be impaired by considering whether the revenue remains highly probable that no revenue reversal will occur. Where an indicator of impairment exists, The Company makes a formal estimate of the asset’s recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Intangible assets are valued at cost less accumulated amortisation and impairment. Amortisation is calculated to write-off the cost in equal annual instalments over asset's estimated useful life, which is typically 3 to 20 years. In the case of capitalised software development costs, research expenditure is written-off to the income statement in the period in which it is incurred.

Development expenditure is written-off in the same way unless and until the Company is satisfied with the technical, commercial and financial viability of individual projects. In these cases, the development expenditure is capitalised and amortised over the period during which the Company is expected to benefit.

Property, plant and equipment other than freehold land are stated at cost less depreciation and impairment. Freehold land is not depreciated. Depreciation is provided at rates calculated to write-off the cost less estimated residual value of each asset over its expected useful life, as follows:

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:

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Investments and other financial instruments

Classification

The Company classifies its financial instruments in the following measurement categories:

•     those to be measured subsequently at fair value either through other comprehensive income ('FVOCI') or through profit or loss('FVPL'); and

•     those to be measured at amortised cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

Recognition and derecognition

At initial recognition, the Company measures a financial instrument at its fair value plus, in the case of a financial instrument not at FVPL, transaction costs that are directly attributable to the acquisition of the financial instrument. Transaction costs of financial instruments carried at FVPL are expensed in the income statement.

Financial instruments with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Purchases and sales of financial instruments are recognised on their trade date (i.e., the date the Company commits to purchase or sell the instrument). Financial instruments are derecognised when the rights to receive/pay cash flows from the financial instrument have expired or have been transferred such that the Company has transferred substantially all risks and rewards of ownership.

Impairment

The Company assesses, on a forward-looking basis, the expected credit losses associated with its financial instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Financial instruments (continued)

Trade and other receivables

Trade receivables are initially recognised at cost (being the same as fair value) and subsequently at amortised cost less any provision for impairment, to ensure the amounts recognised represent their recoverable amount.

For trade receivables, the Company applies the simplified approach permitted by IFRS 9 Financial instruments, resulting in trade receivables recognised and carried at original invoice amount less an allowance for any uncollectible amounts based on expected credit losses. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Trade and other payables

Trade and other payables are recognised initially at cost (being same as fair value). Subsequent to initial recognition they are measured at amortised cost using the effective interest method.

Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with original maturities of three months or less that are readily convertible in to known amounts of cash and which are subject to an insignificant risk of change in value. Bank overdrafts are shown within current financial liabilities.

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, reductions are reversed when the probability of future taxable profits improves.

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.

Provisions are recognised when the Company has a present legal or constructive obligation arising from past events, it is probable that cash will be paid to settle it, and the amount can be estimated reliably.

If the effect of the time value of money is material, provisions are discounted using the yield on government bonds which have a similar timing and currency of cash flows to the provision being discounted. Where required adjustments are made to the yields to reflect the risks specific to the cash flows being discounted. The unwinding of the discount is recognised as a financing cost in the income statement.

The value of the provision is determined based on assumptions and estimates in relation to the amount, timing and likelihood of actual cash flows, which are dependent on future events. Where no reliable basis of estimation can be made, no provision is recorded. However, contingent liabilities disclosures are given when there is a greater than remote probability of outflow of economic benefits.

On an ongoing basis, management monitor provisions and their accurate estimation when compared to final outcomes.

The Company participates in a defined contribution pension scheme where contributions are charged to the profit and loss account in the year in which they are due. The scheme is funded and contributions are paid to a separately administered trust fund. The assets of the scheme are held separately from the Company. The Company remits monthly pension contributions to Capita Business Services Ltd, a fellow subsidiary company, which pays the group liability centrally. Any unpaid contributions at the year-end have been accrued in the accounts of Capita Business Services Ltd.

The Company also has employees who are members of the Group’s main defined benefit pension scheme (“HPS”). The Company has current employees who continue to accrue benefits in the HPS.

As there is no contractual agreement or stated group policy for charging the net defined benefit cost of the HPS to participating entities, the net defined benefit cost of the HPS is recognised fully by the Principal Employer (Capita Business Services Ltd). The Company then recognises a cost equal to its contribution payable for the period. The contributions payable by the participating entities are determined on the following basis:

•     The HPS provides benefits on a defined benefit basis funded from assets held in a separate trustee-administered fund.

•     The HPS is a non-segregated scheme with around 200 different sections in the scheme where each section provides benefits on a particular basis (some based on final salary, some based on career average earnings) to particular groups of employees.

•     At each full actuarial valuation of the HPS (carried out triennially), the contribution rates for those sections containing active members are calculated. These are then rationalised such that sections with similar employer contribution rates (when expressed as a percentage of pensionable pay) are grouped together and an average employer contribution rate for each of the rationalised groups calculated.

•     The Company's contribution is consequently calculated by applying the appropriate average employer contribution rates to the pensionable pay of its employees participating in the HPS.

A full actuarial valuation of the HPS is carried out every three years by an independent qualified actuary for the Trustee of the HPS, with the last full valuation carried out as at 31 March 2023. The next full actuarial valuation is due to be carried out with an effective date of 31 March 2026.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

Monetary assets and liabilities denominated in foreign currencies are translated into British pounds sterling at the rates of exchange ruling at the balance sheet date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. All foreign exchanges gains/losses are recognised in the income statement.

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 conformity 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 reported periods. Although these judgements and assumptions are based on the Directors' best knowledge of the amount, events or actions, actual results may differ.

No significant judgements, estimates and assumptions were used in preparation of financial statements in current reporting period.

The total revenue of the Company for the year has been derived from its principal activity undertaken from the below geographical markets:

The charge for the year can be reconciled to the loss 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.

In accordance with the stated accounting policy for taxation in note 1.9 to the financial statements, the utilisation and recognition of a deferred tax asset is dependent on the existence of sufficient future taxable profits. As at 31 December 2024, based on forecast profits, the Company has concluded in line with the stated policy that no deferred tax asset should be recognised in respect of other timing differences of £2,939 (2023: Nil).

Amounts due to Group companies are repayable on demand. These are not chargeable to interest.

The cost reduction provision represents the cost of reducing headcount where communication to affected employees has crystallised a valid expectation that roles are at risk and it is likely to unwind over the next twelve months. Additionally, it relates to unavoidable running costs of leasehold properties, such as insurance and security, and dilapidation provisions, where properties are exited as a result of the cost reduction programme.

Claims provision represents pension payments and PI claims transferred over to the college at the time of acquisition by Capita Group in 2013.

The deferred income balances solely relates to revenue from contracts with customers. Movements in the deferred income balances were driven by transactions entered into by the Company within the normal course of business in the year.

The average monthly number of employees were:

Their aggregate remuneration comprised:

The above includes payroll costs for temporary staff as well as recharges from other Group entities in respect of various services received by the Company throughout the year.

The Company participates in both defined benefit and defined contribution pension schemes.

The pension charge for the defined contribution pension schemes for the year is £267,517 (2023: £382,156). The pension charge excludes pension contributions paid by the Company on behalf of employees via a salary sacrifice arrangement.

The Company has current and former employees who are members of the Group’s main defined benefit pension scheme ('HPS'). The Company has current employees who continue to accrue benefits in the HPS.

The pension charge for the Company in relation to the HPS for the year was £197,837 (2023: £316,067). This pension charge is included in the pension charge for the defined contribution pension schemes set out above.

A full actuarial valuation of the HPS is carried out every three years by an independent qualified actuary for the Trustee of the HPS, with the last full valuation carried out as at 31 March 2023. Amongst the main purposes of the valuation is to agree a contribution plan such that the pension scheme has sufficient assets available to meet future benefit payments, based on assumptions agreed between the Trustee of the HPS and the Principal Employer (Capita Business Services Ltd, a fellow subsidiary company). The 31 March 2023 valuation showed a funding surplus of £51.4m (31 March 2020: funding deficit of £182.2m). This equates to a funding level of 105% (31 March 2020: 89%).

Given the funding position of the HPS, the Principal Employer and the Trustee of the HPS agreed that no further deficit recovery contributions from the Principal Employer are required other than those already committed1 as part of the 31 March 2020 actuarial valuation. In accordance with the schedule of contributions put in place following the 31 March 2023 actuarial valuation, the Principal Employer has paid £6.3m of regular deficit contributions during 2024 and £14.5m of accelerated deficit funding contributions triggered by the disposal of certain businesses in prior years. Given the healthy funding position of the HPS as at 31 March 2023, and the Principal Employer having paid all outstanding deficit contributions in 2024, there are no further agreed deficit contributions to be paid at this time.

Finally, the Principal Employer agreed an average employer contribution rate of 23.6% of pensionable salary towards the expected cost of benefits accruing.

The next full actuarial valuation is due to be carried out with an effective date of 31 March 2026.

For the purpose of the consolidated accounts of Capita plc, an independent qualified actuary projected the results of the 31 March 2023 full actuarial valuation to 31 December 2024 taking into consideration the relevant accounting requirements.

The principal assumptions for the accounting valuation as at 31 December 2023 were as follows: rate of increase in RPI/CPI price inflation – 3.10% pa/2.55% pa (2023: 3.05% pa/2.45% pa); rate of salary increase – 3.10% pa (2023: 3.05% pa); rate of increase for pensions in payment (where RPI inflation capped at 5% pa applies) – 2.95% pa (2023: 3.00% pa); discount rate – 5.50% pa (2023: 4.55% pa).

The HPS assets at fair value as at 31 December 2024 totalled £1,034.4m (2023: £1,154.4m). The actuarially assessed value of HPS liabilities as at 31 December 2024 was £995.1m (2023: £1,125.0m) indicating that the HPS had a net asset of £39.3m (2023: £29.4m). These figures are quoted gross of deferred tax. The full disclosure is available in the consolidated accounts of Capita plc.

For the purpose of these accounts, the Company’s interest in the HPS is reported on a defined contribution basis recognising a cost equal to its contributions payable during the period.

1These include additional, non-statutory, contributions to meet a secondary funding target with the objective of having sufficient assets to invest in a portfolio of low-risk assets with a low dependency covenant that will generate income to pay members’ benefits as they fall due.

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.

Contingent liabilities represent potential future cash outflows which are either not probable or cannot be measured reliably.

The Company operates at a site in Moreton-in-Marsh. Aqueous Film Forming Foam (AFFF) has historically been used on the site dating back to when it was a Royal Air Force base. AFFFs are no longer used at the site. The Company is working with the relevant regulators to identify any potential pollution on site including as a result of this historic use. At the date of approving these financial statements, the Directors are unable to reliably estimate what liability the Company may have.

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 and Wales. The consolidated financial statements of Capita plc are available from the registered office at First Floor, 2 Kingdom Street, Paddington, London, England, W2 6BD.

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