The Directors present the Tramroad Recycling Limited (the “Company”) for the year ended 31 December 2024. Details of the Directors who held office during the year and as at the date of this report are given on page 3.

The Company’s investments are measured at fair value with movements in fair value recognised in the Statement of Comprehensive Income in the period in which they arise. The total loss for the financial year increased from £12.1m to £14.1m due to increased fair value losses on revaluation of the investments. These losses were primarily driven by reduced demand under material offtake contracts, reflecting challenges in the UK cement and building sectors. This resulted in lower tonnage processed by the investments and contributed to the increased loss. In response, the investments have installed equipment to improve operational resilience and diversify offtake routes to market.

The Company holds investments in two Special Purpose Vehicles (SPVs) that operate a pair of Materials Recovery Facilities (MRFs), located in England and Wales. Details of these subsidiaries can be found in note 9 of these financial statements. The MRFs receive, separate, and prepare recyclable waste materials, diverting them from landfill. These materials are then transformed into a high-quality alternative to fossil fuel, known as Solid Recovered Fuel (SRF). Made from the received waste, SRF is widely utilised in industries such as cement production.

The Company remains in a net liability position at the end of the reporting year, due to the presence of short term intragroup borrowings, which are not expected to be recalled for payment in the near future, or until such time the Company has sufficient working capital to repay. The Company’s net current liabilities increased from £31.9m to £34.0m during the year as a result of net interest margin losses and further investment additions by the Company into loans provided to subsidiaries.

The principal risks and uncertainties facing the Company and its investee company, and an explanation of how they are managed are set out below. The Board does not consider the likelihood or impact of these risks to have changed in the year.

Manager

The manager of the Company is Schroders Greencoat LLP (the “Manager”). The ability of the Company to achieve its investment objective depends heavily on the experience of the management team within the Manager and more generally on the Manager’s ability to attract and retain suitable staff.

Regulation

Changes in the rates of landfill tax determined by the Government may impact the costs the Materials Recovery Facility (MRF) can levy for the processing of input tonnes, and hence, potentially affect the facility's revenue and financial performance.

The Manager keeps itself abreast of developments in the domestic and international waste industry and will assess the impact of any changes and, where possible, respond to these changes when and if they happen.

Financing risk

The Company has financed its investment through loans totalling £54,887,035 (2023: £50,757,647). Various financing mechanisms are implemented based on the nature of the expenditure. Life cycle projects, are funded through the cash generated from operational activities. Substantial capital expenditure projects, which are often large-scale, and require more considerable funding, are financed through procuring additional loan facilities provided by our parent company.

Asset life

In the event that the projects do not operate for the length of time assumed or require higher than expected maintenance expenditure to do so, it could have a material adverse effect on the financial performance and position of the investee company.

The Manager performs regular reviews and ensures that maintenance is performed. Regular maintenance ensures that equipment is in good working order to meet its expected life span.

Power prices

A significant proportion of the variable costs incurred by the SPVs are fuel and power costs operate the equipment used in processing waste. Future cash flows have been modelled using conservative forecasts power prices. Management mitigate this risk in the short term by closely monitoring the market and if appropriate will enter into fixed price agreements to secure reductions in wholesale prices, but also to protect cash flows from significant change in those prices.

A risk is tied to the fluctuating prices of recovered recyclable commodities such as metals, paper, and plastics (“recyclates”). Variability in these market prices can directly impact the revenue from the sale of recyclates, potentially affecting the overall financial performance of the MRFs. To mitigate this risk, management continue to monitor the market and employ strategies such as broadening our recycling outputs to offset the impact of any one commodity's price swing.

The operation of facilities are subject to health and safety and environmental regulation. A breach of these or an accident could lead to damages or compensation to the extent such loss is not covered by insurance policies, adverse publicity or reputational damage.

The Company engages an independent health and safety consultant to ensure the ongoing appropriateness of its health and safety policies and procedures. The investee companies have reporting lines ensuring that the Manager is informed of events as soon as possible after they occur.

Key performance indicators

During the year, the SPVs processed a total of 202,344 tonnes (2023: 192,993 tonnes), reflecting an increase of 4.5% compared to the prior year. However, the total tonnes processed fell short of the forecast due to continued unplanned outages of cement kilns that offtake the SRF processed. These outages are linked to reduced cement production arising from slow growth in the building industry. As a result, the SPVs experienced an operating loss before depreciation, interest, and tax of £0.9 million (2023: £1.48 million) for the underlying investments.

Additionally, the SPVs faced commercial challenges related to gate fee increases, which were below the forecast for 2024. The SPVs benefited from improved market prices for recyclates sold by the MRFs.

Overall, the Group's outlook remains positive. Throughout 2024, management has undertaken capital upgrade works to strengthen operational resilience. Although unplanned kiln outages have continued to put pressure on the facilities, the Group remains optimistic. Increased gate fee uplifts are anticipated in 2025 due to rising landfill tax rates, which will positively impact the prices that Materials Recycling Facilities (MRFs) can charge to input suppliers.

The Company's approach to managing risks applicable to the financial instruments to which it is party are shown in note 17.

On behalf of the board

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

The principal activity of the Company during the year under review continued to be that of an investment entity.

The manager of the Company is Schroders Greencoat LLP (the “Manager”), a Financial Conduct Authority regulated entity.

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

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

In March 2025, the Company made a further drawdown on borrowing facilities provided by the parent undertaking of £3.76m. The increase in borrowings was subject to 9% interest per annum and subject to the same terms as those detailed in note 14.

In accordance with the Company's articles, a resolution proposing that PricewaterhouseCoopers LLP be reappointed as auditors of the Company will be put at a General Meeting.

Strategic report

The Company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the Company's strategic report information required by Sch. 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, (SI 2008/410) to be contained in the directors' report. It has done so in respect of future developments and financial instruments.

The directors are responsible for preparing the Annual report and the financial statements in accordance with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law).

Under company law, directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing the financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• state whether applicable United Kingdom Accounting Standards, comprising FRS 102 have been followed, subject to any material departures disclosed and explained in the financial statements;

• make judgements and accounting estimates that are reasonable and prudent; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are also 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.

In the case of each director in office at the date the directors’ report is approved:

• so far as the director is aware, there is no relevant audit information of which the company’s auditors are unaware; and

• they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

The Company is exposed to financial risks such as price risk, foreign currency risk, market risk, credit risk and liquidity risk, and the monitoring of these risks is detailed in note 17 to the financial statements.

The Company has net liabilities amounting to £19,016,739 (2023: £4,908,824), net current liabilities of £33,966,170 (2023: £31,892,375) and incurred a loss for the year amounting to £14,107,915 (2023: £12,074,539). The Company continues to meet its liquidity requirements through its resources which are managed via the distributions received from its investments and drawdowns from its Parent, as required. The directors have reviewed investee company forecasts and trading performance, as well as considered adverse scenarios, which have shown that the company has sufficient financial resources to meet its current obligations as they fall due for a period of at least 12 months from the date of approval of this report.

The parent company has indicated their willingness to support the Company as required by providing the Company with a letter of support. The letter of support also confirms the Parent has no intent to recall the loans due for at least 12 months from the date of the approval of these financial statements, unless adequate alternative financing has been secured by the borrower.

On this basis, the Board have reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of this report. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.

In our opinion, Tramroad Recycling Limited's 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 and cash flows for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and

• have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual Report”), which comprise: the Statement of Financial Position as at 31 December 2024; the Statement of Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

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.

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.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.

With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.

Strategic report and Directors' Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' Report for the year ended 31 December 2024 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors' Report.

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of directors' responsibilities in respect of the financial statements, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also 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.

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 auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, 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.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to UK tax legislation and compliance with the Companies Act 2006, and we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to the posting of inappropriate journal entries to the income statement, or through management bias in manipulation of accounting estimates with the aim of improving performance. Audit procedures performed by the engagement team included:

• Inquiry of management and those charged with governance around actual and potential litigation claims;

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

• Identifying and testing journal entries, in particular any journal entries with unusual account combinations; and

• Challenging assumptions and judgements made by management in their significant accounting estimates, in particular regarding the valuation of investments.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• the financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

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

The notes on pages 13 to 24 form part of these financial statements.

The notes on pages 13 to 24 form part of these financial statements.

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

The notes on pages 13 to 24 form part of these financial statements.

The notes on pages 13 to 24 form part of these financial statements.

Tramroad Recycling Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1 London Wall Place, London, England, EC2Y 5AU.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below. The accounting policies have been applied consistently, other than where new policies have been adopted or otherwise stated.

The Directors have concluded that the Company’s subsidiaries should be excluded from consolidation as the interests in subsidiaries are held as part of an investment portfolio as defined in paragraph 9.9 (b) of FRS 102 and are measured at fair value with movements in fair value recognised in the Statement of Comprehensive Income in the year in which they arise.

As such, the Company has claimed exemption from preparing consolidated financial statements under Section 402 and 405 of the Companies Act 2006, on the basis all of its subsidiaries are held exclusively with a view to resale and they are permitted to be excluded from consolidation.

The Company has net liabilities amounting to £19,016,739 (2023: £4,908,824), net current liabilities of £33,966,170 (2023: £31,892,375) and incurred a loss for the year amounting to £14,107,915 (2023: £12,074,539). The Company continues to meet its liquidity requirements through its resources which are managed via the distributions received from its investments and drawdowns from its Parent, as required. The directors have reviewed investee company forecasts and trading performance, as well as considered adverse scenarios, which have shown that the company has sufficient financial resources to meet its current obligations as they fall due for a period of at least 12 months from the date of approval of this report.

The parent company has indicated their willingness to support the Company as required by providing the Company with a letter of support. The letter of support also confirms the Parent has no intent to recall the loans due for at least 12 months from the date of the approval of these financial statements, unless adequate alternative financing has been secured by the borrower.

On this basis, the Board have reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of this report. Accordingly, they continue to adopt the going concern basis in preparing these financial statements.

Interests in subsidiaries, including shareholder loans, are initially measured at cost and subsequently measured at fair value through profit or loss. Gains or losses resulting from the movement in fair value are recognised in the Statement of Comprehensive Income in the year in which they arise. Fair value is defined as the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction. Fair value is calculated on an unlevered, discounted cashflow basis.

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.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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

Financial instruments are recognised in the Company's statement of financial position when the Company becomes party to the contractual provisions of the instrument.

At both the current and comparative reporting dates, the carrying amounts of cash and cash equivalents, receivables, payables, accrued expenses and short term borrowings reflected in the financial statements are reasonable estimates of fair value in view of the nature of these instruments or the relatively short period of time between the original instruments and their expected realisation. The fair value of advances and other balances with related parties which are short term or repayable on demand is equivalent to their carrying amount.

Financial assets

Financial assets are recognised in the Company’s Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument. Financial assets are held at amortised cost or, in the case of investments in associates, at fair value through profit or loss.

Amortised cost

Non-derivative financial assets with fixed or determinable repayments that are not quoted in an active market are classified as financial assets held at amortised cost. Debtors that are due within one year of the year end are recognised at the undiscounted amount receivable. All debtor balances are held at the undiscounted amount at the reporting date.

Fair value through profit or loss

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

De-recognition of financial assets

A financial asset (in whole or in part) is derecognised either:

• when the Company has transferred substantially all the risks and rewards of ownership; or

• when it has neither transferred nor retained substantially all the risks and rewards and when it no longer has control over the assets or a portion of the asset; or

• when the contractual right to receive cashflows has expired.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, 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 are classified according to the substance of contractual agreements entered into and are recorded on the date on which the Company becomes party to such contractual requirements of the financial liability.

All loans and borrowings are initially recognised at cost, being fair value of consideration received, net of any incurred transaction costs where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Loan balances as at the year-end have not been discounted to reflect amortised cost, as the amounts are not materially different from the outstanding balances. The Company’s other financial liabilities measured at amortised cost include trade and other payables and other short-term monetary liabilities which are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method.

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

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

A financial liability (in whole or in part) is derecognised when the Company has extinguished its contractual obligations, it expires, or it is cancelled. Any gain or loss on derecognition is taken to the Statement of Comprehensive Income.

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 income statement 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 income statement, 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.

Investment income

Interest income on shareholder loan investments are accounted for on an accruals basis using the effective interest rate method. Income in respect of the provision of management services to the SPVs is recognised on an accruals basis. Provisions are made against income where recovery is considered doubtful.

Interest payable and expenses

Interest payable and expenses are accounted for on an accruals basis.

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 estimates and judgements which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The estimates and assumptions that may have a significant impact on the carrying value of assets and liabilities are those used to determine the fair value of the investments. The fair value of investments is based on the discounted values of expected future cash flows, which are subject to certain key assumptions including the useful life of assets, the discount factors, the rate of inflation, the recycling rates and market demand.

Assumptions about useful lives of assets are based on the Manager’s estimates of the period over which the assets will generate revenue. These assumptions are periodically reviewed for continued appropriateness. The actual useful life of any specified asset may be shorter or longer depending on the actual operating conditions experienced by this asset.

Management also considers the capital expenditure required to maintain the life cycle of the assets as subjective due to the actual timing and quantum of the spend. At each reporting date this is being monitored to ensure the spend is in line with managements best estimates and forecasts.

The discount factors are subjective. It is feasible that a reasonable alternative assumption could be used that would result in a different value. Discount rates are periodically reviewed taking into account any recent market transactions of a similar nature.

The revenues and expenditure of investee company are frequently, partly or wholly subject to indexation, typically with reference to the Consumer Price Index (CPI) or Retail Price Index (RPI). From a financial modelling perspective, an assumption is usually made that the inflation index will increase at a long-term rate.

Management estimate the expected volume of materials that will be processed by the investment SPVs on a daily, monthly, and annual basis. Taking into account factors such as offtake demand and operational efficiency.

The pricing for the (solid recovered fuel ("SRF") materials that will be processed by the SPVs is typically contracted with key offtake suppliers and are contracted in the medium term.

The pricing of other recycled materials (e.g., paper, plastic, metal) are based on market rates and vary based on location. Management analyse market trends and demand for recycled materials, factors such as changes in commodity prices, government policies, and environmental regulations may impact the demand and pricing of recycled materials. There is inherent uncertainty in future recyclate price forecasts.

Estimates and judgements are continually evaluated and are based on historical experience of the Manager and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Best judgement is used in estimating the fair value of investments, there are inherent limitations in any estimation techniques. Future events could also affect the estimates of fair value. The effect of such events on the estimates of fair value, including the ultimate liquidation of investments, could be material to the financial statements.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The directors determined based on the criteria in FRS 102 para. 9.9 (b), that the investee companies outlined in note 9 shall be excluded from consolidation and thus recognised at fair value. The classification of investee companies as being held exclusively with a view to subsequent resale is a key judgement.

In preparing the financial statements, the Directors assessed that the Company intends to realise its investments beyond 12 months of the balance sheet date and so all investments have been classified as non-current assets.

The directors have agreed with the Company's auditors that the auditors' liability to damages for breach of duty in relation to the audit of the Company's financial statements for the year to 31 December 2024 should be limited to the greater of £5,000,000 or five times the auditors' fees, and that in any event the liability for damages should be limited to that part of any loss suffered by the Company as is just and equitable having regard to the extent to which the auditors, the Company and any third parties are responsible for the loss in question. The shareholders approved this limited liability agreement, as required by the Companies Act 2006, by a resolution dated 24 September 2024.

The average monthly number of persons (including directors) employed by the Company during the year was nil (2023: nil).

The directors do not receive emoluments in relation to services to this entity.

Interest receivable from group companies all arose in the United Kingdom.

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:

The Company has tax adjusted losses carried forward of £3,085,697 (2023: £2,279,936) for which a deferred tax asset of £771,424 (2023: £569,984) has not been recognised, as the timing of future taxable profits arising within the Company against which to utilise these losses, is uncertain. The unrecognised deferred tax asset stated is calculated at 25%, being the effective rate of tax at the reporting date.

The unused tax losses do not have an expiry date.

Fair value measurements

FRS 102 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities is determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in their entirety into only one of the following three levels:

• Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - inputs for assets or liabilities that are not based on observable market data (unobservable inputs).

The determination of what constitutes ‘observable’ requires judgement by the Company. The Company considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The only financial instruments held at fair value are the instruments held by the Company in the SPVs, which are fair valued at each reporting date. The Company’s investments have been classified within level 3 as the investments are not traded and contain unobservable inputs. Due to the nature of the investments, they are always expected to be classified as level 3. There have been no transfers between levels during the year ended 31 December 2024 or 31 December 2023.

Details of the Company's subsidiaries at both 31 December 2024 and 31 December 2023 were as follows:

Debt instruments measured at amortised cost are comprised of loan receivables and other receivables comprised of loan interest.

Equity instruments measured at fair value through profit or loss are comprised of investments in subsidiaries.

Financial liabilities measured at amortised cost are comprised of accruals, amounts owed to group undertakings and borrowings.

Other receivables consist of accrued interest receivable from group undertakings, which is repayable on demand.

Amounts owed to group undertakings are interest free, unsecured and repayable on demand.

The loan relates to a number of shareholder loans issued by the parent company NatWest Pension Fund Limited. The Company received new funding totalling £Nil (2023: £4,685,000) during the year. The loans attract interest rates ranging between 6% and 9% per annum. £37,553,221 (2023: £33,423,833) is payable on demand, and £17,333,814 (2023: £17,333,814) in 2051. Interest is payable quarterly, on 31 March, 30 June, 30 September and 31 December. Unpaid interest continues to accrue interest at the agreed rate plus an additional 2% per annum.

During the year ended 31 December 2024, £4,129,388 (2023: £3,628,632) of interest was accrued cumulatively across all loans. As at 31 December 2024, the loan balance was £49,285,565 (2023: £49,285,565) and there was unpaid loan interest payable of £5,601,470 (2023: £1,501,482).

The share has attached to it full voting, dividend and distribution (including on winding up) rights.

The Company received capital contributions from its shareholder during the period ended 31 December 2021. These contributions are classified as equity within other reserves.

The Company’s activities expose it to a variety of financial risks: market risk (including, interest rate risk and foreign currency risk), credit risk and liquidity risk. An explanation of those risks is set out below.

Price risk

Price risk is defined as the risk that the fair value of a financial instrument held by the Company will fluctuate. Investments are measured at fair value through profit or loss and are valued on an unlevered, discounted cashflow basis. Therefore, the value of the investments will be (amongst other risk factors, as per note 2 a function of the discounted value of their expected cashflows and, as such, will vary with movements in interest rates and competition for such assets.

In relation to the investments, sensitivity analysis indicates that a discount rate increase of 50bp yields a downward adjustment to the fair value of £1,485,000. Conversely, a discount rate decrease of 50bp yields an upward adjustment to the fair value of £1,581,000.

The discount factors are subjective and therefore it is feasible that a reasonable alternative assumption may be used resulting in a different valuation for these investments.

Interest rate risk

Interest rate risk is the risk that the fair value or future cashflows of a financial instrument will fluctuate because of changes in market interest rates. The Board considers that the shareholder loan investments and shareholder loan payable do not carry any interest rate risk as they bear interest at a fixed rate, thereby mitigating the risks associated with the variability of cash flows arising from interest rate fluctuations.

Foreign currency risk

Foreign currency risk is defined as the risk that the fair values of future cashflows will fluctuate because of changes in foreign exchange rates. The Company’s financial assets and liabilities are denominated in GBP and substantially all of its revenues and expenses are in GBP. The Company is not considered to be materially exposed to foreign currency risk.

The Company is 100% owned by NatWest Pension Trustee Limited (“the trustee”). The ultimate controlling party is the NatWest Group Pension Fund ("the Fund"). The Pension Trustee (NatWest Pension Trustee Limited) holds the shares on behalf of the fund.

In March 2025, the Company made a further drawdown on borrowing facilities provided by the parent undertaking of £3.76m. The increase in borrowings was subject to 9% interest per annum and subject to the same terms as those detailed in note 14.

As at 31 December 2024, the Company had shareholder loans owing from its subsidiary, Oakleaf Recycling Limited, totalling £16,666,110 (2023: £15,698,110). Interest of £1,001,010 (2023: 955,592) was charged in the year, at 6% and 9% per annum. At the year end, the Company owed unpaid interest of £951,010 (2023: £Nil).

As at 31 December 2024, the Company had shareholder loans owing from its subsidiary, Hywel NMP Limited, totalling £25,048,061 (2023: £24,748,061). Interest of £2,389,858 (2023: £1,970,963) was charged in the year, at 9% per annum. Unpaid loan interest owing to the Company at the year end totalled £2,764,067 (2023: £374,209).

As at 31 December 2024, the Company had loans owing to its ultimate controlling party, NatWest Group Pension Fund, totalling £49,285,565 (2023: £49,285,565). Interest of £4,129,388 (2023: £3,628,632) was charged to the Company in the year. The loans attract interest rates of 6% and 9%. At the year end, the Company owed unpaid loan interest totalling £5,601,470 (2023: £1,472,082).

As at 31 December 2024, the Company owed £82,510 (2023: £82,510) to Hywel NMP Limited and £6,018 (2023: £6,018) to Oakleaf Recycling Limited. These balances bear no interest, are unsecured and are repayable on demand, as detailed in note 12.