The directors present the strategic report for the year ended 31 December 2025.

Kuusakoski Ltd is part of the Kuusakoski Group – a family-owned recycling pioneer with more than a century of history and an extensive international footprint. The group’s core mission is to restore value from waste by processing it into high-quality raw material, including stainless steel scrap, which is supplied to steel mills and foundries globally.

This Strategic Report outlines the business environment, performance, risks, strategy, and forward-looking outlook for Kuusakoski Ltd (“the Company”) operating within the stainless steel and broader metals recycling industry. It reflects our continued commitment to sustainable circular economy principles, operational excellence, and long-term value creation for stakeholders.

Globally, 2025 was characterized by increased competition for high-quality scrap, volatile nickel and chrome prices, tightening export controls, and rising expectations for traceability and emissions reporting. Successful operators sought to differentiate through advanced sorting technologies, stable supply partnerships, and digitalized quality assurance.

The stainless-steel scrap recycling industry entered 2025 with accelerating structural demand, tightening supply dynamics, and growing regulatory pressures that favour circular-economy operators. Global stainless-steel production is projected to continue its multi-year growth trajectory, driven largely by energy-transition infrastructure, transportation, and consumer durables. Recycled stainless scrap remains a critical feedstock due to its cost efficiency, lower carbon footprint, and alignment with corporate sustainability goals.

Business Review

The principal activity of Kuusakoski Ltd remains that of metal recycling and trading.

The Directors report on a challenging year, with the business continuing to see challenges across its cost base and an ever-increasing compliance focused landscape. Despite this challenging market environment, 2025 closed with the company enjoying sales exceeding £52m, this however marked a decrease against the previous year’s results (£71.7m).

The company saw continued overall demand for its products. Total sales volume fell under budget, reaching just over 39.0 thousand tons. Sourcing levels reflected weaker sales and remained balanced, despite very competitive markets, geopolitical challenges and a weaker economic outlook.

Gross margin, a key financial metric, saw a decline over the period. This was attributed to a combination of lower sales volumes, increased production and labour costs, also reduced intrinsic material values.

In contrast, a targeted focus on higher-margin and specialty product sales, combined with robust business controls, resulted in an improved gross margin which increased from 6.5% to 7.5% for the year, whilst reducing cost of sales by 27%. Subsequently, EBITDA, whilst positive, was also compressed from £1.8m to £1.4m (19.2%).

Despite revenue contraction during the year, the directors continued to endorse investments in essential QEHS efficiencies, processing plant and systems. This supported the company’s sustainability targets and future electrification goals. These investments aim to reduce scope emissions and drive down future processing costs, whilst increasing operational capability and sales flexibility.

KPI's

The directors closely monitor both the material margin and direct overhead, as key performance indicators. Whilst the material margin increased during 2025, continual monitoring and control measures meant the company managed to reduce overheads, despite increasing business costs, a satisfactory achievement for the year. The company’s QEHS responsibilities are also stringently recorded and form additional KPI’s, again remaining satisfactory throughout 2025.

As with the previous year, the global stainless industry continued to face significant challenges and fluctuations, with the business remaining exposed to movements in the nickel market, directly affecting stainless scrap material values.

Compared to other base metals across the LME metal complex, nickel remained a poor performer throughout 2025, presenting challenging trading conditions for the stainless recycling industry. As the key element in the production of stainless steel, nickel continued a steady downward price-trend, eventually reaching a ten-year low. The company continued to operate under complex macro environmental conditions, influenced by US tariff policies and lacklustre manufacturing growth, all putting direct pressure on the stainless sector.

As a result, 2025 saw most European stainless production cut and melters reduce raw material intake to counter weaker downstream sales. This was largely a consequence of lower demand from the automotive and construction sectors. The net effect being a surplus of recycled raw material, compounding macro-economic factors and driving average material prices lower. Despite a slight recovery in Nickel ore prices, this overall supply surplus led to persistent price pressures with the market remaining oversupplied well into the year.

Class 1 nickel also continued a swing towards increasing surplus. Despite pressure in the west for greener production, an appetite for Indonesian Class 2 nickel from European consumers to utilize this lower-cost material in their production, added pressure on Nickel. This trend continued throughout 2025.

Despite these challenges, the domestic demand for stainless scrap in production and stainless-based products remained somewhat optimistic, allowing the company to retain a strong position in the domestic sector.

The company continued to promote product flexibility, added value products, and strong consumer relationships. Kuusakoski ensures quality, service, sustainability, and innovation remain key tenets of its products distinguishing it from those of its competitors. The directors carefully review both existing and potential market opportunities with a view to identifying and mitigating risks.

Price & Margin Landscape

• Nickel price volatility continues to influence scrap spreads, particularly 300-series material.

• 200-series scrap volumes rise but suffer from weaker pricing due to lower chrome and nickel content.

• Processors with strong quality control and higher alloyed customer-specific blends have proven to maintain more resilient margins.

Demand Environment

• Despite macro-economic pressures, overall global stainless-steel demand continued moderate expansion during 2025, the main drivers being construction, renewables, EV battery components, and industrial machinery.

• Melt shops continued leaning towards increased scrap ratios, to reduce energy costs and meet Scope 1–3 carbon reduction commitments.

• High-grade scrap with reliable chemistry, is at a premium as producers aim to minimize primary nickel and chromium inputs.

Supply Environment

Scrap availability remains structurally constrained due to:

• Modest growth in end-of-life stainless volumes.

• Tightening scrap exports from key regions (e.g., EU, India, and parts of Southeast Asia implement controls to preserve domestic circular economies).

• Increased competition from large vertically integrated recyclers and steelmakers acquiring scrap assets.

Regulatory & ESG Factors

2025 brings a stricter regulatory environment emphasizing circularity, traceability, and environmental compliance:

Carbon Accounting & Disclosure

• More mills require verified CO₂-equivalent data for recycled feedstocks.

• Upstream processors must invest in monitoring, measurement, and verification systems.

Material Traceability

• Governments increasingly require reporting on scrap origin to combat illegal waste trafficking.

• Digital ledger solutions are becoming industry standard

Export Restrictions

• Several countries implement scrap-export reduction policies to protect domestic manufacturing, increasing supply differentiation regionally.

Worker Safety & Environmental Compliance

• Enhanced obligations around dust control, emissions, and hazardous-material handling

Sales Risks

The majority of the company’s products continued to be sold domestically. This strategy continued to yield positive results, albeit, as reported, at lower levels than in previous years. The Company expanded third party sales to support core business scrap sales.

The directors believe a continued focus on the current sales strategy remains in the best interests of the company with scope for future growth. The reported long-term outlook for the domestic stainless industry remains positive.

The directors took responsive action throughout 2025 to manage stocks and respond to difficult market conditions and demand. Continuous monitoring of the trade, working closely with industry bodies and industry press allowed the identification of market trends, mitigating risks and identifying new sales opportunities.

Supply chain

Ongoing global conflicts, such as the Ukraine War and instability in Middle eastern region, continued to increase the risk of supply chain disruption. Along with wider geopolitical economic instability, this had the potential to impact customer demand and margins. Instability in the energy sector raised costs and raw material pricing, which continued to impact operations throughout 2025.

2025 saw a continued drive to partner with cheaper suppliers of consumables, production and plant, with a view to increasing efficiencies throughout all areas of the business. This remained under constant review throughout the year and yielded focused cost reductions. Responsive action was taken to ensure the company worked closely with new and long-standing suppliers and customers, to ensure supply chain disruption was minimized wherever possible, with a view to business stability, security and continued supply of raw material and consumables in an increasingly competitive market.

QEHS risks

The company strives to keep quality risks to a minimum. As such, the company’s management controls are constantly reviewed and improved. Additionally, the company is regularly audited to ensure management and quality systems comply with the company’s ISO 9001 accreditation.

The management of environmental issues at Kuusakoski is based on continuously developing operations and minimizing adverse environmental impacts. Our operations are guided by site-specific environmental management systems that comply with international standards. Environmental management systems are a key part of our site management system and the functionality of our sites. Compliance is monitored through internal and external audits. Our principle is that all sites with significant environmental aspects have management systems in accordance with company and local standards. The environmental impacts arising from the handling and processing of recycled materials were well controlled throughout 2024.

Due to the nature of the business, health and safety risks remain comparatively high when compared to other industry sectors. 2024 saw the company increase its focus on its health and safety commitments as a responsible employer, with investment in new digital systems to support QEHS. Adherence to group QEHS KPI’s, further investment in site health and safety, coupled with robust and progressive training programs for all operatives, continue to form the basis of safeguarding the company’s duty of care

The directors anticipate the business environment will remain increasingly competitive but continue to yield positive results.

The Company is well positioned for sustained growth, but with increased costs and higher technological thresholds. Continued investment in digitalization, traceability, and high efficiency processing will capture increasing market share, as mills drive towards higher recycled content. Margin volatility will be inherent, but strategically positioned recyclers will benefit from structural growth in stainless steel demand, circular-economy policies, coupled with the requirement for low-carbon materials.

The directors believe that the company is in a stable financial position and that these risks that have been identified are being well managed. With increased focus on efficiency improvements and diversity in its product range, as well as continuing to review the state of the market and the activities of competitors, the directors are confident in the company's ability to maintain and build on this position.

The incoming carbon border adjustment mechanism (CBAM) may present challenges for the industry. The company continues to monitor policy and the scheme’s alignment with the UK’s current emissions trading scheme.

Financial Instruments

The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are largely conducted in sterling. The company does not enter into formally designated hedging arrangements at a local level. All financial activity is closely monitored by the directors and group financial departments.

Sustainability, Research and Development

Supplying high grade scrap with accurate chemistry, remains a key tenet of the company’s ethos. The company continues to experiment and develop custom products and services, increasing our position in consumer value chains, such as our continued commitment to the Closed-Loop movement of recycled Stainless products. Thus, reducing logistical third-party movements and handling, whilst generating additional revenue streams.

2025 saw Kuusakoski Ltd continue its journey of sustainable development through electrification & process efficiency. Our site is powered by Solar, Wind and Hydro only, cutting our company emissions significantly throughout our energy intensive operations.  We are pleased to report that all Senior Management drive all-electric vehicles, actively promoting clean green zero emissions in both our business and personal core values. Following the successful implementation of our first all-electric Tele-Handler in 2023, 2025 saw the company continue investments in more efficient material handling equipment, reducing costs and driving down the company’s scope emissions

In recognition of Kuusakoski Recycling’s work in evaluating the sustainability of corporate supply chains, EcoVadis awarded Kuusakoski Recycling with gold-level recognition. The EcoVadis assessment is measured across four main categories: environment, labor and human rights, ethics, and sustainable procurement practices. This achievement ranks Kuusakoski in the top 2 percent of companies assessed worldwide, with the Gold Medal awarded to companies that rank in the top 5% of all assessed organizations. This achievement reflects the company's dedication to environmental responsibility, social accountability, and ethical business practices.

At the local level, the company continued to invest in people, increasing training and employment opportunities for our staff. A new ERP system, introduced during 2025, will offer additional administrative efficiency, reporting and development opportunities.

The company continued to forge closer operational collaboration with our customers, working tirelessly to enhance process monitoring, resulting in more energy efficient processing whilst increasing product densities. As a result, the company delivered improved freight stowage, whilst reducing the energy required by our customers during melting and handling processes.

Continued engagement with local projects demonstrated the company’s continued commitment to our local community. We were delighted to continue our relationship during 2025 with the River Stewardship Company, keeping local waterways and natural habitats clean and thriving.

New initiatives saw the company also engage with community grass-roots football, supporting local youth teams, encouraging team spirit and a healthier lifestyle. Kuusakoski Ltd also proudly engaged in initiatives such as Steel-Warrior, directly removing knives from the streets, as well as Charitable organisations such as Social-Bite, providing Christmas Day lunches for the homeless.

On behalf of the board

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

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

Ordinary dividends were paid amounting to £842,460. The directors recommend payment of a final dividend amounting to £500,000.

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

Sumer Auditco Limited were appointed as auditor to the company following BHP LLP becoming part of the Sumer Group on 31 December 2025, which required a change in audit firm to comply with applicable regulatory requirements.

In accordance with section 487(2) of the Companies Act 2006, Sumer Auditco Limited are deemed to be reappointed annually.

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; 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 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.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

We have audited the financial statements of Kuusakoski Limited (the 'company') for the year ended 31 December 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 profit 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's 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 other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

In the light of the 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 or 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the company through discussions with directors, and from our commercial knowledge and experience of the sector;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including legislation such as the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations;

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias;

• investigated the rationale behind significant or unusual transactions; and

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• enquiring of management as to actual and potential litigation and claims;

• reviewing correspondence with HMRC

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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.

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

Kuusakoski Limited is a private company limited by shares incorporated in England and Wales. The registered office is Crown Works, Faraday Road, Sheffield, S9 3XZ.

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. 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:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. In making this assessment, the directors have considered the company's relationship with key customers and suppliers, working capital requirements and potential risks to the business as set out in the Strategic Report. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

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

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

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:

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 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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. 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, 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 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 debtors 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. Financial assets classified as receivable within one year are not amortised.

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.

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 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 creditors and loans from 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.

Debt 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. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest 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.

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.

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.

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 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.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

The preparation of financial information required management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Judgements and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting estimates may differ from the related actual results.

There are no key judgements, estimated or assumptions that have been made by the directors in the preparation of these financial statements.

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

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

Their aggregate remuneration comprised:

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

The proposed final dividend for the year ended 31 December 2025 is:

The proposed final dividend is subject to approval by shareholders and has not been included as a liability in these financial statements.

Included within tangible fixed assets are assets held under finance leases or hire purchase contracts, as follows:

Finance lease payments represent rentals payable by the company for certain items of motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

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

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:

Amounts contracted for but not provided in the financial statements:

The company has taken advantage of the exemption contained in FRS 102 para 33.1A not to disclose transactions with group companies.

The immediate parent undertaking and controlling party is Kuusakoski Oy, a company registered in Finland.

The ultimate parent is Kuusakoski Group Oy, a company registered in Finland which prepares group financial statements.

The registered office of both companies is Metsanneidonkuja 6, 02130 Espoo, Finland.

The ultimate controlling party is the Kuusakoski family.