The directors present their Strategic Report and financial statements of Axalta Coating Systems Huthwaite UK Limited ("the company") for the year ended 31 December 2025. The company is part of the international group headed by Axalta Coating Systems Ltd ("Axalta group").

The company manufactures general industrial, heavy duty and architectural coatings which are sold throughout the UK, Ireland and internationally. The company's business model is to consolidate its position within the UK and overseas with a focus of expanding its customer base and ultimately returning value to its shareholders.

The results for the company show turnover for the year of £11.9m (2024: £12.3m), with gross margin of 25.3% (2024: 19.4%) and loss before tax of £0.1m (2024: loss before tax £1.9m). Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") for the current period was a profit of £0.53m (2024: EBITDA loss of £0.95m). The company's net asset position for the period end was £11.1m (2024: £11.1m).

The turnover year on year decreased by 3.37%. This decrease can be attributed to the loss of customers, primarily due to price increases aimed particularly at customers with low profit margins. As a result, sales to some customers have been negatively impacted.

The increased gross margin percentage is driven by the loss of low margin customers and reduction of headcount due to lower manufactured volumes.

At the year end the company continues to maintain a strong balance sheet position underpinned by significant fixed asset investment to support the business demand.

Principal risks and uncertainties

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

Cash flow risk

The company's activities expose it to the financial risk of changes in foreign currency exchange rates. The company may use foreign exchange forward contracts to hedge its exposures where appropriate but will also look to naturally hedge through the matching of the same foreign currency receipts and payments.

Credit risk

The company's principal financial assets are bank balances and cash, trade and other receivables and amounts due from group undertakings. Its credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

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

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

Interest rate risk

The company uses no external debt and all funding requirements are met through the Axalta group cash pool arrangement. Any excess cash is passed to the cash pool and likewise any borrowing of funds is financed from this. The Axalta group's treasury department sets interest rates for cash balances deposited / lent aligned with market rates and overall group financing costs. Because of no external debt financing, all interest rate risk is managed within the Axalta group and aligned.

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company monitors the timing of cash flows and aligns this with its strategic planning. Forecasts are produced to assist management in identifying liquidity requirements and maintaining adequate resources. The company's primary source of finance is the operating cash flows it generates plus the ability to draw down additional funds as a member of Axalta group's cash pool arrangement.

Market competition

The company operates in a competitive market and seeks to offer quality products at the best prices. The management team are actively looking to grow market share and are planning a number of target campaigns, involving existing, former and new customers.

Economic downturn

The success of the business is reliant on consumer and industrial spending. An economic downturn, resulting in reduction of consumer spending power may have a direct impact on the income achieved by the company. In response to this risk, senior management monitor the economic conditions.

Inflation

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

Raw materials input costs

The company is exposed to fluctuations in raw material and energy costs, which are influenced by global supply and demand dynamics, inflationary pressures and broader macroeconomic and geopolitical conditions.

This risk is mitigated through supplier diversification, procurement efficiencies and ongoing monitoring of market developments. In addition, the company benefits from Axalta’s global procurement function, which negotiates supplier pricing, leverages group-wide purchasing power and supports the business in managing input cost volatility.

Geopolitical instability

Ongoing geopolitical tensions, including the conflict in the Middle East, give rise to indirect risks for the company despite the absence of direct sales exposure to countries within the MENA region. Such developments may increase volatility in global energy markets and disrupt international supply chains, potentially resulting in higher utility costs, increased transportation costs and inflationary pressure on certain raw materials.

Management continues to monitor geopolitical developments closely and assesses their potential impact on the business. Mitigating actions include maintaining flexible sourcing arrangements, active cost management and, where appropriate, the introduction of customer surcharges to offset inflationary pressures and protect margins.

The key financial key performance indicators of the company are considered to be turnover, gross margin, profit before tax, EBITDA and net assets, which are monitored on a monthly basis.

On behalf of the board

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

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

The results for the year are set out on page 9. No interim dividends were paid (2024: £nil). The directors do not recommend payment of a final dividend (2024: £nil).

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

Given the developments of the business during the period and its position within the marketplace, the directors believe the company is in a strong position to further develop its business and customer base, with the support and assistance of the Axalta Coating Systems Ltd group. In 2026 and beyond, the business strategy will be to consolidate and stabilise the expanded manufacturing function alongside managing inflationary pressures, supported by Axalta group's global procurement team to mitigate, where possible, fixed cost inflation and assist with purchasing economics of scale.

Financial risk management objectives and policies

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

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

So far as the directors are aware, there is no relevant audit information of which the company's auditor is unaware. Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company's auditor is aware of that information.

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;

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

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Axalta Coating Systems Huthwaite UK Limited (the 'company') for the year ended 31 December 2025 which comprise the profit and loss account, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2025 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The other information comprises the information included in the annual report and financial statements, other than the financial statements and our auditor’s report thereon.  The directors are responsible for the other information contained within the annual report and financial statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

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

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

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

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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

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

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

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

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

• UK Generally Accepted Accounting Practice;

• Companies Act 2006;

• UK Tax legislation; and

• Health and safety and environmental protection legislation.

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

We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management. We corroborated these enquiries through our review of submitted returns, external inspections and relevant correspondence with regulatory bodies.

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

• Management override of controls

• Revenue recognition

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

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

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

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

• Reviewing records of any health and safety or environmental protection incidents including managements assessment of their potential impact on the company;

• Performing audit work procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing judgements made by management in their calculation of accounting estimates for potential management bias;

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

• Agreement of the financial statement disclosures to supporting documentation.

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

There are no recognised gains and losses in the current or prior period other than as included in the profit and loss account. Accordingly, no statement of comprehensive income is presented.

The loss and comprehensive expense for the period is solely attributable to the shareholder of the company's immediate parent.

Axalta Coating Systems Huthwaite UK Limited ("the company") is a private company limited by shares incorporated and domiciled in Scotland. The registered office is 6A York Street, Aberdeen, AB11 5DD. The company's main production facility is based in Huthwaite, England with depots in Aberdeen, Scotland and Belfast, Northern Ireland. The principal activities of the company and the nature of its operations are set out in the Strategic Report.

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 pound sterling.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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

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

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

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

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

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

Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Purchased goodwill has been fully amortised.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Research expenditure is written off against profits in the year in which it is incurred.

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

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

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

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

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

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

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

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

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

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

Basic financial assets, which include certain debtors, amounts owed by group undertakings and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. The effective interest rate is the rate that exactly discounts estimated future cash receipts/payments through the expected life of the investment to the net carrying amount on initial recognition. Financial assets classified as receivable within one year are not amortised.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Exceptional items

Exceptional items comprise costs which the directors consider as material to the profit and loss account, and that their separate disclosure is necessary for an appropriate understanding of the company's financial performance.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following are considered to be judgements that have had the most significant effect on the amounts recognised in the financial statements:

Allocation of overheads included in stock is a judgement made by management (note 12). Directors assess the overheads to be included in stock and calculate these in accordance with their judgements.

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

An analysis of the company's turnover is as follows:

In the opinion of the directors it would be seriously prejudicial to the company's interest to disclose a geographical analysis of turnover.

Prior year restructuring costs represent redundancy costs incurred in the year and are contained within administrative expenses.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

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

There is no tax going through other comprehensive income in either the current or prior year, nor no current tax.

The actual credit 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:

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

Within amounts owed by group undertakings, £2,746,726 (2024: £nil) is due from the Axalta group cash pool arrangement which has no fixed repayment terms, is unsecured and accrues interest at market rate. The remaining balance of £255,923 (2024: £32,839) is due to other group companies and has no fixed repayment terms, is unsecured and interest free.

Within amounts owed to group undertakings, £nil (2024: £121,976) is due to the Axalta group cash pool arrangement which has no fixed repayment terms, is unsecured and accrues interest at a market rate. The remaining balance of £437,381 (2024: £662,304) due to other group companies and has no fixed repayment terms, is unsecured and is interest free.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

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

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

Profit and loss reserves

The profit and loss account represents cumulative historic profit and losses, net of dividends.

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

Akzo Nobel N.V. ("Akzo Nobel") and Axalta Coating Systems Limited have entered into an agreement to combine in an all-stock merger of equals, expected to complete in late 2026 or 2027, subject to approval.

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

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