Company registration number 02299747 (England and Wales)
CAPITA BUSINESS SERVICES LTD
ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
CAPITA BUSINESS SERVICES LTD
COMPANY INFORMATION
Directors
M W Lansdown
R Holroyd
Capita Corporate Director Limited
C J Gregory
A Smythe
(Appointed 11 February 2026)
Secretary
Capita Group Secretary Limited
Company number
02299747
Registered office
First Floor
2 Kingdom Street
Paddington
London
England
W2 6BD
Auditor
KPMG LLP
15 Canada Square
London
E14 5GL
Banker
Barclays Bank PLC
1 Churchill Place
London
United Kingdom
E14 5HP
CAPITA BUSINESS SERVICES LTD
CONTENTS
Page
Strategic report
1 - 8
Directors' report
9 - 11
Independent auditor's report to the members of Capita Business Services Ltd
12 - 15
Income statement
16
Statement of comprehensive income
17
Balance sheet
18 - 19
Statement of changes in equity
20
Notes to the financial statements
21 - 70
CAPITA BUSINESS SERVICES LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
- 1 -

The Directors present their Strategic report and financial statements for the year ended 31 December 2025.

Capita Business Services Ltd ('the Company') is a wholly owned subsidiary (indirectly held) of Capita plc. Capita plc, along with all its subsidiaries is hereafter referred to as 'the Group'. The Company operates within the Public Service division and the Contact Centre segment of the Experience division of the Group.

Principal activities

The principal activity of the Company continued to be that of the provision of outsourcing services. These services consist of:

- taking complete responsibility under long term contracts for a range of integrated comprising customer services, IT, business support and consultancy; and

- providing administration and related services

Review of business

As shown in the Company's income statement on page 16, revenue has increased from £1,341.4m in 2024 to £1,443.8m in 2025 and the Company's operating profit has increased from £68.1m in 2024 to £98.5m in 2025. The increase in revenue reflects the benefit from the Health Assessment Advisory Service contract win, the Disabled Students Allowance contract, growth on the contract with Transport for London, including the opening of the Silvertown Tunnel, and scope expansion on the Royal Navy training contract and extension of the Primary Care Support England contract, partly offset by the flow through of contracts lost in previous years.

The Group implemented a multi-year cost reduction programme in November 2023 to deliver annualised savings of £60m by Q1 2024. The programme was extended in March 2024, to deliver further annualised savings of £100m by mid-2025. In December 2024, reflecting on the progress made ahead of schedule with £140m annualised savings already delivered, and increased confidence in the level of efficiencies that can be delivered, the cost reduction target increased from £160m to £250m, which was achieved by the end of 2025.

A charge of £9.0m (2024: £1.6m) has been recognised by the Company in the year ended 31 December 2025 for the costs to deliver the cost reduction programme. This includes redundancy and other costs of £7.7m (2024: £5.4m) to deliver a reduction in headcount and a charge of £1.3m arising from the rationalisation of the Group's property estate (2024: a credit of £3.8m reflecting the successful exit of a number of properties which had been provided for previously). The cumulative cost recognised since the commencement of the cost reduction programme is £40.4m (2024: £31.4m), which is included within administrative expenses. Since the targeted savings were delivered by the end of 2025, no further expenses to deliver this cost reduction programme are expected beyond the end of 2025.

On 26 March 2026, the Group agreed to sell its private sector contact centre business to Inspirit Capital for £1 with £6.5m cash retained in the business upon completion for normal working capital purposes. In addition, there is potential contingent consideration payable to the Group up to a cap of £61.5m, expected to be paid in 2027 and 2028; with £50.0m based on future financial performance of the disposed business and £11.5m based on cash availability. The sale is expected to be completed in June 2026, subject to regulatory approvals.

The Company’s direct investment in Capita Business Support Services Ireland Limited forms part of the sale perimeter, and the Company will receive potential contingent consideration payable to the Company of up to £7.5m expected to be paid in 2027 and 2028 which is based on future financial performance of the disposed investment. Accordingly, the investment in Capita Business Support Services Ireland Limited was impaired by £1 as at 31 December 2025 in advance of its planned disposal.

The increase in operating profit is a reflection of net benefit from the revenue flow-through on new and expanded contracts and material savings delivered through the cost reduction programme, partly offset by continued reinvestment in technology solutions, and a £5.8m impact from the rise in National Insurance introduced in April 2025.

CAPITA BUSINESS SERVICES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 2 -
Review of the business (continued)

In November 2025, Ofgem, in line with the usual annual price control process, confirmed they were consulting on a proposal to disallow c.£31m of costs incurred by the Smart Data Communications Company (Smart DCC) for the regulatory year 2024/2025. Since November, Smart DCC has engaged constructively with Ofgem to seek a reduction to the level of disallowed cost in the final price determination. On 11 March 2026, Ofgem has concluded that it will disallow c.£11m cost incurred by Smart DCC for the regulatory year 2024/2025 which is a reduction of c.£20m from the proposed amount. These financial statements reflect the final price determination for regulatory year 2024/2025 and an estimate of what the price determination will be for regulatory year 2025/2026.

The balance sheet on pages 18 to 19 of the financial statements shows the financial position at the year end. Net assets have increased from £870.8m in 2024 to £933.1m in 2025 primarily due to the profit generated by the Company during the year. Details of the amounts owed by/to its parent company and fellow subsidiary companies are shown in notes 16, 19 and 29 to the financial statements.

The key financial performance indicators used by the Group, on a consolidated basis, include adjusted revenue, adjusted profit before tax, adjusted basic earnings per share, free cash flow excluding business exits, and gearing ratios. The Group manages its operations on an operating segment basis and consequently, some of these indicators are monitored at an operating segment level. The performance of the Public Service division and the Contact Centre operating segment of the Experience division of the Group are discussed in the Group’s Annual Report which does not form part of this report.

The Directors have formed the judgement that it is appropriate to prepare the financial statements on the going concern basis. Therefore, the financial statements do not include any adjustments which would be required if the going concern basis of preparation is inappropriate. Further details of the going concern assessment are provided in section 1.1, pages 21-23 of the financial statements.

CAPITA BUSINESS SERVICES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 3 -
Principal risks and uncertainties

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

The principal risks for the Company are:

Profitable growth

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

Contract compliance

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

AI adoption and governance

Strategic and operational exposure from inadequate AI adoption and governance.

People attraction and retention

Attract, develop, engage and retain the right talent.

Financial stability and resilience

Our ability to maintain financial resilience and achieve financial targets.

Cyber security

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

Environment, social and governance

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

Safety and health

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

Data governance and data privacy

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

As a subsidiary of Capita plc, the Company is subject to controls and risk governance techniques applied across all the Group's businesses. Details of the specific risk assessments and mitigating actions are outlined on pages 81-85 of the Group's 2025 Annual Report.

CAPITA BUSINESS SERVICES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 4 -
Section 172 statement

Capita plc’s section 172 statement applies to its Divisions and the Company to the extent it relates to the Company’s activities. Common policies and practices are applied across the Group through divisional management teams and a common governance framework. The following disclosure describes how the Directors have regard to the matters set out in section 172(1)(a) to (f) and forms the Directors’ statement as required under section 414CZA of the Companies Act 2006. Further details of the Group’s approach to each stakeholder are provided in Capita plc’s section 172 statement on pages 59 to 62 of its 2025 Annual Report.

Our People

Why this relationship matters

Our colleagues are central to the delivery of the Group’s strategy, the embedding of a values-based culture, and the provision of high-quality products and services that meet client expectations.

Their key priorities and expectations

Colleagues’ priorities include opportunities for learning, development and career progression; a positive and inclusive workplace culture; fair and transparent pay and reward; support for health and wellbeing; flexible ways of working; and open, two-way communication with leadership, including clear visibility of strategy, change programmes and decision-making.

How we engaged

- Regular all-employee communications, including leadership briefings and global townhalls

- Employee focus groups and colleague network groups

- Workforce engagement on pay at Capita

- Ongoing engagement through management cascades, local action planning and "you said, we did" feedback mechanisms

Topics of engagement

- Creating and sustaining an inclusive workplace

- Culture, values and leadership behaviours

- Health, safety and wellbeing

- Speak Up arrangements and ethical culture

- Directors’ remuneration and pay at Capita

- Career development, internal mobility and the career path framework

- Annual salary review and reward transparency

Outcomes and actions

The 2025 all-colleague survey reported an Employee Net Promoter Score (eNPS) of -22, representing an eleven-point improvement on the 2024 survey. While this indicates improving colleague sentiment, the Board recognises that overall survey indicators show engagement remains an area of focus. Survey insights have informed targeted action planning at Group, divisional and local levels.

During the year, the Group continued to progress its multi-year culture programme, building on foundations established in 2024 to rally, reset and embed Capita’s culture. This included the further mobilisation of more than 250 Culture Accelerators globally, mandated management and leadership development, and the embedding of refreshed Group values and the launch of an employee playbook to support consistent behaviours and ways of working. The Group also introduced Celebrate!, a recognition platform designed to reward and celebrate colleagues and reinforce behaviours aligned to Capita’s values across the organisation. Capita continued to strengthen its focus on inclusion and fair reward. Gender pay gap performance improved compared to the prior year, and the Group continued its voluntary disclosure of ethnicity pay gap data and, for the first time, disability pay gap data. Since reporting commenced in 2017, Capita has reduced its median gender pay gap by more than ten percentage points.

Engagement with colleagues on pay, progression and reward transparency was strengthened through dedicated workforce engagement sessions during the year Promotion of the Speak Up policy continued across the organisation, reinforcing the Group’s commitment to ethical behaviour, openness and psychological safety.

CAPITA BUSINESS SERVICES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 5 -
Section 172 statement (continued)

Risks to stakeholder relationship

- The ability to attract, retain and develop colleagues, with potential impacts on service quality and financial performance

- The pace of cultural change and the effectiveness of embedding new behaviours and ways of working during transformation

Key metrics

Voluntary attrition, eNPS, employee engagement index and colleague survey completion level.

Clients and customers

Why this relationship matters

Clients and customers rely on Capita for the consistent and timely delivery of critical services. Capita’s reputation, contract performance and long-term success depend on meeting their service expectations and supporting effective transformation outcomes.

Their key priorities and expectations

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

How we engaged

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

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

- Through our customer advisory boards

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

Topics of engagement

- Current service delivery, continuous improvement initiatives and operational excellence

- Transition and mobilisation of services

- Capita's digital and gen AI transformation capabilities

- Possible future services, market and client needs

- Co-creation of client value propositions in collaboration with our hyperscaler partners, AWS, Salesforce, Microsoft and ServiceNow such as Databricks and Snowflake

- Ongoing benefits of hybrid working, near and offshore capabilities on client services

Outcomes and actions

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

Risks to stakeholder relationship

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

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

- Loss of customers for our clients

Key metrics

Customer NPS; specific feedback on client engagements.

CAPITA BUSINESS SERVICES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 6 -
Section 172 statement (continued)

Suppliers and Partners

Why this relationship matters

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

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

Their key priorities and expectations

- Transparent and fair procurement processes

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

- Reliable and timely payment terms

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

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

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

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

How we engaged

- Strategic collaboration with hyperscalers: focused on co-creating solutions for Capita's clients, integrating advanced AI and cloud capabilities into our offerings

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

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

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

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

- Supplier performance monitoring

- Supplier charter commitments

- Partnering opportunities

- Joint development of AI powered customer service tools

Topics of engagement

- New technology and gen AI offerings suitable for both Capita and Capita-customer use

- Supplier payments

- Sourcing requirements and bid opportunities

- Supplier performance monitoring

- Supplier charter commitments

- Partnering opportunities

- Joint development of AI powered customer service tools

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

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

- Enhancing cyber security standards across partner ecosystems to safeguard stakeholders

CAPITA BUSINESS SERVICES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 7 -
Section 172 statement (continued)

Outcomes and actions

Our Supplier Charter, which is available on our website, remains central to Capita’s approach to supplier relationships and sets out the standards and behaviours expected of suppliers, including acting ethically, providing safe working conditions, treating workers with dignity and respect, and operating in an environmentally responsible manner. The Group seeks to work with suppliers and partners that share its values and support delivery of its purpose to create better outcomes.

As part of its responsible business commitments, Capita manages and monitors a range of supply chain-related metrics, including sustainability performance, spend with SMEs, VCSEs and diverse-owned businesses, and modern slavery risk.

During the year, procurement governance and risk management arrangements were strengthened through the introduction of enhanced supplier due diligence and a new supplier risk assessment framework, supported by a centralised supplier relationship management platform. These controls improve visibility across the supplier lifecycle and support the identification, monitoring and mitigation of risks relating to human rights, modern slavery, ethical conduct and regulatory compliance.

During 2025, 97% of Group suppliers were paid within 60 days.

Risks to stakeholder relationship

- Evolving regulatory and environmental requirements

- Maintaining shared commitments to transparency and sustainability

- Maintaining resilience in the supply chain and partner ecosystems

Key metrics

Percentage of supplier payments made within agreed terms; SME spend allocation; and supplier diversity profile.

Society

Why this relationship matters

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

Their key priorities and expectations

Social value; community engagement; diversity, equity and inclusion; climate change; data privacy and security, AI, business ethics; accreditations and benchmarking; and cost-of-living pressures.

How we engaged

- Membership of non-governmental organisations

- Charitable and community partnerships

- External accreditations and benchmarking

- Working with our partners, clients, suppliers, and the Cabinet Office

Topics of engagement

- Social value

- Workplace inequalities

- Diversity, equity & inclusion

- Data privacy and security

- AI and business ethics

- Climate change

- Community engagement

CAPITA BUSINESS SERVICES LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 8 -

Section172 statement (continued)

Outcomes and actions

Community engagement programme such as Social Shifters; Business in the Community’s Opening Doors campaign, a flagship initiative championing inclusive recruitment across UK workplaces. Listed on the Forbes Global list of top employers for women for the third consecutive year; our gender pay gap has improved by 11.10% since we began reporting. We achieved Onvero’s Gold Talent Inclusion and Diversity Evaluation (TIDE) Award, maintained a Disability Confident Employer (level 3) recognition across the Group and Armed Forces Covenant Gold Employer Recognition Award, received Carbon Disclosure Project (CDP) ranking of B, EcoVadis Committed badge and the Charities Trust’s Payroll Giving Platinum Quality Mark Award.

Risks to stakeholder relationship

- Lack of understanding of the issues important to them

- Insufficient communication or involvement in shaping and influencing strategies and plans

Key metrics

Community investment, workforce diversity and ethnicity data, including pay gaps, external indices performance such as EcoVadis.

On behalf of the board

.............................................
C J Gregory
Director
29 June 2026
CAPITA BUSINESS SERVICES LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
- 9 -

The Directors present their Directors' Report and f inancial statements for the year ended 31 December 2025.

Results and dividends

The results for the year are set out on page 16.

No interim or final dividend was paid or proposed during the year (2024: £nil).

Directors

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

M W Lansdown
C Ripoche
(Resigned 15 May 2026)
R Holroyd
Capita Corporate Director Limited
C J Gregory
A Smythe
(Appointed 11 February 2026)
Qualifying third party indemnity provisions

The Company has granted an indemnity to the directors of the Company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. This qualifying third party indemnity remains in force as at the date of approving the directors' report.

Political donations

The Company made no political donations and incurred no political expenditure during the year (2024: £nil).

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the C ompany continues and that the appropriate training is arranged. It is the policy of the C ompany that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The Company participates in the Group's policies and practices to keep employees informed on matters relevant to them as employees through regular meetings, newsletters, email notices and intranet communications. These communication initiatives enable employees to share information within and between business units and employees are encouraged, through an open-door policy, to discuss with management matters of interest to the employee and subjects affecting day-today operations of the Company. The Group's share incentive plan is designed to promote employee share ownership and to give employees the opportunity to participate in the future success of the Group.

Business relationships

Details regarding relationships with suppliers, clients and others, together with further cross references, are provided in the section 172 statement from pages 3 to 8.

Auditor

Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and KPMG LLP will therefore continue in office.

CAPITA BUSINESS SERVICES LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 10 -
Corporate governance

The Company forms part of the Capita plc group. Capita plc shares have a premium listing on the main market of the London stock exchange and Capita plc is subject to the requirements of the UK Corporate Governance Code 2024 (the 2024 Code) published by the Financial Reporting Council.

The Company did not apply a corporate governance code during the year because its governance arrangements form part of the wider Group’s governance arrangements and are integrated into the management of the Group as a whole. Further details of the Group’s compliance to the 2024 Code are provided on pages 96-103 of Capita plc’s 2025 Annual Report.

Group’s Executive Team ('ExT'), led by the Chief Executive Officer of Capita plc, oversees its governance arrangements. Information about ExT members is available on the Capita plc's website https://www.capita.com/about-us/our-leadership. Decisions made by the Capita plc board and its committees, or by the ExT and its committees, are cascaded through the Group where applicable and the management of each division, led by its Executive Officer, is responsible for their implementation among unregulated businesses in their division. Board of directors of regulated entities within the Group have authority to make decisions autonomously, with risk committee oversight at a Group level. Quarterly performance reviews are conducted by the ExT with divisional management. These enable a two-way conversation to take place about business strategy, developments, and performance. The Directors of the Company remain responsible for all decisions affecting the Company’s operation.

Environment

The Company recognises the importance of its environmental responsibilities, monitors its impact on the environment, and designs and implements policies to reduce any damage that might be caused by it’s activities. The Company operates in accordance with Group policies, which are described in the Group’s 2025 Annual Report that does not form part of this report. Initiatives designed to minimise the Company’s impact on the environment include safe disposal of waste, recycling and reducing energy consumption.

Statement of Directors' responsibilities

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 accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 reduced disclosure framework. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the C ompany and of the profit or loss of the C ompany 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;

- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

- assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

- use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the C ompany’s transactions and disclose with reasonable accuracy at any time the financial position of the C ompany and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Strategic report

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

CAPITA BUSINESS SERVICES LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 11 -
Statement of disclosure to auditor

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. Each director has taken all the steps he/ she might reasonably be expected to take as a director to make himself/ herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

On behalf of the board
..............................................
C J Gregory
Director
29 June 2026
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CAPITA BUSINESS SERVICES LTD
- 12 -
Opinion

We have audited the financial statements of Capita Business Services Ltd (the 'C ompany') for the year ended 31 December 2025 which comprise the income statement, the statement of comprehensive income, the balance sheet, the statement of changes in equity and related notes, including the accounting policies in note 1.

In our opinion the financial statements:

- give a true and fair view of the state of the ompany's affairs as at 31 December 2025 and of its profit for the year then ended;

- have been properly prepared in accordance with UK accounting standards, including FRS 101 ; 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 are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to other entities of public interest. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Going concern

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).

We used our knowledge of the Company, its industry, and the general economic environment to identify the inherent risks to its business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period.

The risks that we considered most likely to adversely affect the Company’s available financial resources over this period was the extent to which the Company is reliant on its ultimate parent company, Capita plc ('the Group') which is driven by the following factors:

- The Company’s participation in the Group’s notional cash pooling arrangements;

- The significant level of intercompany receivables from fellow Group companies;

- The level of administrative support services received from the Group;

- The Company receives revenue from other Group entities or key contracts that may be terminated in the event of default by the Group;

- The Company’s subsidiaries receive revenue from other Group entities or key contracts that may be terminated in the event of default by the Group; and

- The Company forms part of a group of subsidiary companies owned directly or indirectly by Capita plc, each of which guarantee the obligations under certain funding arrangements of Capita plc.

We also considered less predictable but realistic second order impacts, such as business disruption, which could result in a rapid reduction of available financial resources.

Given the level of financial resources, and the risks inherent in the cash flows, our evaluation of the directors’ going concern assessment was of particular significance in our audit.

We considered whether these risks could plausibly affect liquidity in the going concern period by assessing the directors’ sensitivities over the level of available financial resources indicated by the Company’s financial forecasts taking account of severe, but plausible adverse effects that could arise from these risks individually and collectively. Our procedures also included:

- Critically assessing assumptions in the base case and downside scenario relevant to liquidity, in particular in relation to the risks stated above by comparing to economic forecasts/ historical trends in severe economic situations and overlaying knowledge of the entity's plans based on approved budgets and our knowledge of the entity and the sector in which it operates.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPITA BUSINESS SERVICES LTD
- 13 -

- Assessing whether downside scenarios applied mutually consistent and severe assumptions in aggregate, using our assessment of the possible range of each key assumption and our knowledge of inter-dependencies.

- We also compared past budgets to actual results to assess the directors' track record of budgeting accurately.

We considered whether the going concern disclosure in note 1.1 to the financial statements gives a full and accurate description of the directors’ assessment of going concern, including the identified risks and dependencies.

Our conclusions based on this work:

- we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;

- we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period; and

- we found the going concern disclosure in note 1.1 to be acceptable.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.

Fraud and breaches of laws and regulations - ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

- Enquiring of directors, internal audit and inspection of policy documentation as to the Company’s high-level policies and procedures to prevent and detect fraud including the internal audit function, and the Company’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud,

- Reading Board and Committee meeting minutes,

- Considering remuneration incentive schemes and performance targets for management, Directors including the Capita Group’s share option and long-term incentive schemes for management remuneration;

- Using analytical procedures to identify any unusual or unexpected relationships.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.

As required by auditing standards and taking into account possible pressures to meet profit and revenue targets, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition. In particular:

- the risk that management may be in a position to make inappropriate accounting entries; and

- the risk of bias in accounting estimates such as contract modifications and terminations.

We also identified a fraud risk related to inappropriate capitalisation or recognition of contract fulfilment costs in response to meet profit targets.

We performed procedures including:

- Identifying journal entries and other adjustments to test based on risk criteria and comparing the identified entries to supporting documentation. These included those posted by senior finance management and those posted to unusual accounts.

- Selecting samples from additions to contract fulfilment assets during the year, which we agreed back to supporting calculations and source documentation to assess whether the capitalisation was appropriate.

- Reviewing management's contract profitability forecasts for contracts with significant contract fulfilment assets and challenging the key assumptions in order to assess whether any impairment should be recorded against the carrying value of the contract fulfilment assets.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPITA BUSINESS SERVICES LTD
- 14 -

Identifying and responding to risks of material misstatement related to compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience through discussion with the directors and others management (as required by auditing standards), and from inspection of the Company’s regulatory and legal correspondence and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and safety, data protection laws, anti-bribery, employment law, regulatory capital and liquidity and certain aspects of company legislation recognising the nature of the Company’s activities and its legal form. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

Strategic report and directors' report

The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial statements does not cover those reports and we do not express an audit opinion thereon.

Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:

- we have not identified material misstatements in the strategic report and the directors’ report;

- in our opinion the information given in those reports for the financial year is consistent with the financial statements; and

- in our opinion those reports have been prepared in accordance with the Companies Act 2006.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPITA BUSINESS SERVICES LTD
- 15 -
Matters on which we are required to report by exception

Under the Companies Act 2006 we are required 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.

We have nothing to report in these respects.

Directors' responsibilities

As explained more fully in their statement set out on page 10, the directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; 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; 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 they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities

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 our opinion in an auditor’s report. Reasonable assurance is a high level of assurance but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The purpose of our audit work and to whom we owe our responsibilities

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.

Patrick Sherrington (Senior Statutory Auditor)
For and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
29 June 2026
CAPITA BUSINESS SERVICES LTD
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2025
- 16 -
2025
2024
Notes
£m
£m
Revenue
3
1,443.8
1,341.4
Cost of sales
(1,151.4)
(1,100.1)
Gross profit
292.4
241.3
Administrative expenses
(193.9)
(173.2)
Operating profit
4
98.5
68.1
Investment income
5
-
0
135.9
Other income
6
19.1
241.2
Impairments
7
(42.1)
(133.9)
Net finance income
8
23.2
12.3
Profit before tax
98.7
323.6
Income tax charge
9
(28.5)
(38.2)
Profit for the year
70.2
285.4

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

The notes and information on pages 21 to 70 form an integral part of these financial statements.

CAPITA BUSINESS SERVICES LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
- 17 -
2025
2024
Notes
£m
£m
Profit for the year
70.2
285.4
Other comprehensive expense
Items that will not be reclassified subsequently to the income statement:
Actuarial loss on defined benefit pension schemes
26
(10.5)
(11.3)
Income tax effect
9
2.6
2.8
Other comprehensive expense for the year, net of tax
(7.9)
(8.5)
Total comprehensive income for the year
62.3
276.9

The notes and information on pages 21 to 70 form an integral part of these financial statements.

CAPITA BUSINESS SERVICES LTD
BALANCE SHEET
AS AT
31 DECEMBER 2025
31 December 2025
- 18 -
2025
2024
Notes
£m
£m
Non-current assets
Property, plant and equipment
10
13.4
17.0
Intangible assets
11
43.6
42.2
Right-of-use assets
10
121.9
131.6
Investments in subsidiaries
12
89.7
131.0
Contract fulfilment assets
14
175.4
218.3
Financial assets
15
91.8
91.5
Trade and other receivables
16
558.2
2.7
Deferred tax assets
9
41.0
31.1
Employee benefits
26
30.1
39.3
1,165.1
704.7
Current assets
Financial assets
15
4.8
4.2
Inventories
0.8
1.3
Trade and other receivables
16
591.5
1,008.4
Cash and cash equivalents
17
9.2
4.4
606.3
1,018.3
Total assets
1,771.4
1,723.0
Current liabilities
Trade and other payables
19
238.7
177.6
Deferred income
22
265.8
328.4
Lease liabilities
20
28.3
28.9
Financial liabilities
18
-
0
2.4
Provisions
21
12.3
17.3
Income tax payable
49.0
17.3
594.1
571.9
Non-current liabilities
Deferred income
22
6.1
21.5
Lease liabilities
20
237.2
253.0
Provisions
21
0.9
5.8
244.2
280.3
Total liabilities
838.3
852.2
Net assets
933.1
870.8
CAPITA BUSINESS SERVICES LTD
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2025
31 December 2025
2025
2024
Notes
£m
£m
- 19 -
Capital and reserves
Issued share capital
24
0.0
0.0
Share premium
25
60.0
60.0
Capital redemption reserve
0.7
0.7
Retained earnings
872.4
810.1
Total equity
933.1
870.8

The notes and information on pages 21 to 70 form an integral part of these financial statements.

These financial statements were approved by the board of directors and authorised for issue on 29 June 2026 and are signed on its behalf by:
..............................................
C J Gregory
Director
Company registration number 02299747 (England and Wales)
CAPITA BUSINESS SERVICES LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
- 20 -
Share capital
Share premium
Capital redemption reserve
Retained earnings
Total equity
£m
£m
£m
£m
£m
At 1 January 2024
0.0
60.0
0.7
533.2
593.9
Profit for the year
-
-
-
285.4
285.4
Other comprehensive expense for the year
-
-
-
(8.5)
(8.5)
Total comprehensive income
-
-
-
276.9
276.9
Transactions with owners:
Contribution in respect of share based payment charge
-
-
-
0.6
0.6
Settlement of share based payment charged by intercompany
-
-
-
(0.6)
(0.6)
At 31 December 2024
0.0
60.0
0.7
810.1
870.8
Profit for the year
-
-
-
70.2
70.2
Other comprehensive expense for the year
-
-
-
(7.9)
(7.9)
Total comprehensive income
-
-
-
62.3
62.3
Transactions with owners:
Contribution in respect of share based payment charge
-
-
-
0.5
0.5
Settlement of share based payment charged by intercompany
-
-
-
(0.5)
(0.5)
At 31 December 2025
0.0
60.0
0.7
872.4
933.1
Share capital

The balance classified as share capital is the nominal proceeds on issue of the Company's equity share capital, comprising 13,269 ordinary shares of £1.00 each.

Share premium

The amount paid to the Company by shareholders, in cash or other consideration, over and above the nominal value of the shares issued to them less issuance costs.

Capital redemption reserve

The Company can redeem shares by repaying the market value to the shareholder, whereupon the shares are cancelled. Redemption must be from distributable profits. The capital redemption reserve represents the nominal value of the shares redeemed.

Retained earnings

Net profits accumulated in the Company after dividends are paid.

The notes and information on pages 21 to 70 form an integral part of these financial statements.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
- 21 -
1
Accounting policies
1.1
Basis of preparation

Capita Business Services Ltd is a private company limited by shares incorporated in England and Wales.

The financial statements have been prepared under the historical cost basis except where stated otherwise and in accordance with the applicable accounting standards.

The financial statements are prepared in British pounds sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest million pounds ('£m'), except wherein stated otherwise.

In determining the appropriate basis of preparation for the annual report and financial statements for the year ended 31 December 2025, the Company’s Directors (‘the Directors’) are required to consider whether the Company can continue in operational existence for the foreseeable future. The Directors have concluded that it is appropriate to adopt the going concern basis, having undertaken a rigorous assessment as set out below.

Accounting standards require that ‘the foreseeable future’ for going concern assessment covers a period of at least twelve months from the date of approval of these financial statements. The Directors have considered the period from the date of approval of these financial statements to 30 June 2027 (‘the going concern period’) and which aligns to the period considered by the Directors of the ultimate parent company, Capita plc.

Directors' assessment

The financial forecasts used for the going concern assessment are derived from financial projections for 2026-2028 for the Company which have been subject to review and challenge by management and the Directors. The Directors have approved the projections. These cash flow forecasts demonstrate that, under both the base case and a severe but plausible downside scenario, the company remains cash-generative and is able to meet its liabilities as they fall due.

Inter-dependency with other companies in the group headed by Capita plc ('the Group')

The Director’s assessment of going concern has considered the extent to which the Company’s ability to remain a going concern is inter-dependent with that of the Group. The Company has dependency with the Group in respect of the following:

- provision of certain services, such as administrative support services and should the Group be unable to deliver these services, the Company would have difficulty in continuing to trade;

- participation in the Group’s notional cash pooling arrangements, of which £8.4m was advanced at 31 May 2026. In the event of the cash being required elsewhere in the Group, the Company may not be able to access its cash balance within the pooling arrangement;

- recovery of receivables of £1,006.5m from fellow Group companies as of 31 May 2026. If these receivables are not able to be recovered when forecast by the Company, then the Company may have difficulty in continuing to trade;

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

- revenue earned by its subsidiaries from other Group entities and key contracts that may be terminated in the event of a default by the Group; and

- the Company forms part of a group of subsidiary companies owned directly or indirectly by Capita plc each of which guarantee the obligations under certain funding arrangements of Capita plc and Capita Holdings Limited (refer to note 1.2).

Given the inter-dependency the Company has with the Group, the Directors have considered the financial position of the ultimate parent company as disclosed in its most recent consolidated financial statements, being for the year ended 31 December 2025.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 22 -

Basis of preparation (continued)

Ultimate parent company – Capita plc

The Capita plc Board (‘the Board’) concluded that it was appropriate to adopt the going concern basis, having undertaken a rigorous assessment of the financial forecasts, key uncertainties, sensitivities, and mitigations when preparing the Group’s consolidated financial statements at 31 December 2025. These consolidated financial statements were approved by the Board on 9 March 2026 and are available on the Group’s website (www.capita.com/investors). Below is a summary of the position at 9 March 2026:

Accounting standards require that ‘the foreseeable future’ for going concern assessment covers a period of at least twelve months from the date of approval of the consolidated financial statements. The Board has considered the period from the date of approval of the consolidated financial statements to 30 June 2027, which aligns with the year end and covenant test date for the Group.

The base case financial forecasts used in the Group going concern assessment are derived from the 2026-2028 business plan as approved by the Board in March 2026.

Under the base case scenario, the Group forecasts growth in revenue, profit and cash flow over the medium term. When combined with available committed facilities, this allows the Group to manage scheduled debt repayments (with no need for future refinancing of these repayments). The most material sensitivities to the base case are the risk of not delivering the planned revenue growth.

The base case projections used for going concern assessment purposes reflect business disposals completed up to the date of approval of the consolidated financial statements. The base case financial forecasts demonstrate liquidity headroom and compliance with all debt covenant measures throughout the going concern period to 30 June 2027.

In considering severe but plausible downside scenarios, the Board has taken account of the potential adverse financial impacts resulting from the following risks:

- revenue growth falling materially short of plan;

- unforeseen operational issues leading to contract losses and cash outflows;

- sustained interest rates at current levels;

- non-availability of the Group’s non-recourse trade receivables financing facility; and

- unexpected financial costs linked to unexpected one-off incidents.

The likelihood of simultaneous crystallisation of the above risks is considered by the Board to be low. Nevertheless, in the event that simultaneous crystallisation were to occur, the Group would need to take action to ensure there is sufficient liquidity. In its assessment of going concern, the Board has considered the mitigations, under the direct control of the Group, that could be implemented including, but not limited to, substantially reducing (or removing in full) bonus and incentive payments, reducing discretionary spend and reduction or delay in capital investment. Taking these considerations into account, the Group’s financial forecasts, in a severe but plausible downside scenario, demonstrate sufficient liquidity headroom and compliance with all debt covenant measures throughout the going concern period to 30 June 2027.

Adoption of going concern basis in the Group financial statements:

Reflecting the forecasts, coupled with the Board’s ability to implement appropriate mitigations should the severe but plausible downside materialise, the Group continued to adopt the going concern basis in preparing the consolidated financial statements. The Board has concluded that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to 30 June 2027.

The directors have also made enquiries with the directors of the ultimate parent undertaking to understand the performance of the Group, and to confirm that they are not aware of any events or circumstances since 9 March 2026 that would change their conclusion in regard to the going concern basis for the Group and ultimate parent undertaking.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 23 -

Basis of preparation (continued)

Conclusion

Although the Company has a reliance on the Group as detailed above, based on their enquiries with the Group’s Directors and the Company’s forecasts, even in a severe but plausible downside, the Directors are confident the Company will continue to have adequate financial resources to continue in operation and discharge its liabilities as they fall due over the period to 30 June 2027. Consequently, the financial statements have been prepared on the going concern basis.

1.2
Guarantor group

The Company forms part of a group of subsidiary companies owned directly or indirectly by Capita plc each of which guarantee the obligations under certain funding arrangements of Capita plc and Capita Holdings Limited. These funding arrangements are: Capita plc's principal bank credit facilities, and private placement loan notes issued by both Capita plc and Capita Holdings Limited. These arrangements are subject to ongoing compliance with covenants that include the Group’s maximum ratio of adjusted net debt to adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) and minimum interest cover. The covenant threshold tests are required to be carried out twice a year and the Group was in compliance with all debt covenants.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 24 -
1.3
Compliance with accounting standards

The Company has applied FRS101 – Reduced Disclosure Framework in the preparation of its financial statements.

The Company has prepared and presented these financial statements by applying the recognition, measurement and disclosure requirements of international accounting standards in conformity with the requirements of the Companies Act 2006.

The Company's ultimate parent company, Capita plc, includes the Company in its consolidated statements. The consolidated financial statements are prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and with UK-adopted International Financial Reporting Standards ('UK-IFRS') and the Disclosure and the Transparency Rules of the UK's Financial Conduct Authority. They are available to the public and may be obtained from Capita plc’s website on https://www.capita.com/investors.

In these financial statements, the Company has applied the disclosure exemptions available under FRS 101 in respect of the following disclosures:

- A cash flow statement and related notes;

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

- Disclosures in respect of transactions with wholly owned subsidiaries;

- Disclosures in respect of capital management;

- The effects of new but not yet effective IFRSs;

- Certain disclosures as required by IFRS 15 ;

- Disclosures in respect of the compensation of key management personnel; and

- Disclosures as required by IFRS 16 .

Since the consolidated financial statements of Capita plc include equivalent disclosures, the Company has also taken the disclosure exemptions under FRS 101 available in respect of the following disclosure:

- Certain disclosures required by IFRS 2 in respect of Group settled share based payments;

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

- Certain disclosures required by IFRS 3 in respect of business combinations undertaken by the Company, including a comparative period reconciliation of goodwill; and

- Certain disclosures required by IFRS 7 and certain disclosure exemptions as permitted by IFRS 13 Fair value measurement.

1.4
Change in accounting policies

The Company has adopted the new amendments to standards detailed below but they do not have a material effect on the Company's financial statements.

New amendments or interpretations Effective date

Lack of exchangeability – Amendments to IAS 21 1 January 2025

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 25 -
1.5
Revenue

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

The revenue and profits recognised in any period are based on the delivery of performance obligations and an assessment of when control is transferred to the customer.

Revenue is recognised either when the performance obligation in the contract has been performed (so ‘point-in-time’ recognition) or ‘over-time’ when control of the performance obligation is transferred to the customer.

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

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

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

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

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

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

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

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

After the total transaction price is determined, the Company allocates this to the identified performance obligations in proportion to their relative standalone selling prices and recognises revenue when (or while) those performance obligations are satisfied.

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

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 26 -
Revenue (continued)

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

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

When using the output method, the Company recognises revenue on the basis of direct measurements of the value to the customer of the goods and services transferred to date relative to the remaining goods and services under the contract. This is a faithful depiction of the transfer of services since the service delivered to the customer is unchanged. Where the output method is used, in particular for long-term service contracts where the series guidance is applied, the Company often uses a method of time elapsed which requires minimal estimation. Certain long-term contracts use output methods based upon estimations of: user numbers; service activity levels; or fees collected.

When transfer of control is most closely aligned to the Company's efforts in delivering the service, the input method is used to measure progress, and revenue is recognised in direct proportion to costs incurred. This is a faithful depiction of the transfer of services because costs (or other inputs) most accurately reflect the incremental benefits received by the customer from efforts to date.

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

Where a contract contains variable consideration the estimate is regularly reviewed, including at half year and full year reporting, to ensure the criteria that it is highly probable that the eventual consideration will not be significantly lower than the current estimate continues to be met.

Where the Company commits to provide exit assistance services in a contract, delivery of these services may be a separate performance obligation. Where the contract does not provide the standalone selling price for these services, the Company allocates revenue from the other performance obligations, and recognises this revenue using a method that faithfully depicts the Company’s performance in providing these services.

Contract modifications

The Company’s contracts are often amended for changes in contract specifications and requirements. Contract modifications exist when the amendment either creates new or changes existing, enforceable rights and obligations.

The effect of a contract modification on the transaction price and the Company’s measure of progress for the performance obligation to which it relates, is recognised as an adjustment to revenue in one of the following ways:

a) prospectively as an additional performance obligation (this is typically when new distinct goods or services are provided on an existing contact);

b) prospectively as a termination of the existing contract and creation of a new contract;

c) as part of the original contract using a cumulative catch up this is typically where the modification changes the services provided to date); or,

d) as a combination of (b) and (c).

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 27 -
Revenue (continued)

In respect of contracts for which the Company has decided there is a series of distinct goods and services that are substantially the same and have the same pattern of transfer where revenue is recognised over-time, the modification will always be treated under either (a) or (b); (d) may arise when a contract has a part-termination and a modification of the remaining performance obligations.

Judgement is applied in relation to the accounting for such modifications where the final terms or legal contracts have not been agreed prior to the period end because management needs to determine if a modification has been approved and if it either creates new, or changes existing, enforceable rights and obligations of the parties. Depending upon the outcome of such negotiations, the timing and amount of revenue recognised may be different in the relevant accounting periods. Modification and amendments to contracts are undertaken through an agreed formal process. For example, if a change in scope has been approved but the corresponding change in price is still being negotiated, management uses its judgement to estimate the change to the total transaction price. Importantly, any variable consideration is only recognised to the extent that it is highly probable that no revenue reversal will occur. For example, if pricing is subject to indexation based on an external metric (such as the Consumer Price Index ('CPI') or such as the Retail Price Index ('RPI')) then revenue related to the indexation will only be recognised after the relevant indexation is confirmed. Future indexation will not be recognised because it is not highly probable that a significant reversal of an indexation adjustment will not occur.

Contract fulfilment costs

Contract fulfilment costs are divided into: (i) costs that give rise to an asset; and (ii) costs that are expensed when incurred.

In determining the appropriate accounting treatment for such costs, the Company firstly considers any other applicable standards. If those other standards preclude capitalisation of a particular cost, then an asset is not recognised under IFRS 15 Revenue from Contracts with Customers.

If other standards are not applicable to contract fulfilment costs, the Company applies the following criteria which, if met, result in capitalisation of costs that: (i) directly relate to a contract or to a specifically identifiable anticipated contract; (ii) generate or enhance resources that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and (iii) are expected to be recovered.

The Company has determined that, where the relevant specific criteria are met, the costs for (i) process mapping and design; (ii) system development; and (iii) project management; are likely to qualify to be capitalised as contract fulfilment assets.

The incremental costs of obtaining a contract with a customer are recognised as a contract fulfilment asset if the Company expects to recover them. The Company incurs costs such as bid costs, legal fees to draft a contract and sales commissions when it enters into a new contract.

The Company has determined that the following costs may be capitalised as contract fulfilment assets: (i) legal fees to draft a contract after the Company has been selected as preferred supplier; and (ii) sales commissions directly related to winning a specific contract.

Costs incurred prior to selection as preferred supplier are not capitalised but expensed when incurred.

The Company also considers the nature of any Software as a Service (SaaS) utilised during delivery of the Company’s revenue generating contracts and whether associated costs incurred meet the criteria for capitalisation as contract fulfilment assets. In particular the Company assesses whether the work conducted includes any configuration or customisation of the suppliers software and then considers the relevant accounting treatment.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 28 -
Revenue (continued)

Utilisation

The utilisation charge is included within cost of sales. The Company utilises contract fulfilment assets over the expected contract period using a systematic basis that mirrors the pattern in which the Company satisfies its performance obligations to the customer.

Derecognition

A contract fulfilment asset is derecognised either when it is disposed of or when no further economic benefits are expected to flow from its use or disposal.

Impairment

At each balance sheet date, the Company determines whether or not the contract fulfilment assets are impaired by comparing the carrying amount of the asset with the remaining amount of consideration that the Company expects to receive less the costs that relate to providing services under the relevant contract. In determining the estimated amount of consideration, the Company uses the same principles as it does to determine the contract transaction price, except that any constraints used to reduce the transaction price are removed for the impairment test.

Principal versus agent

The Company has arrangements with some of its customers whereby it needs to determine if it acts as a principal or an agent because more than one party is involved in providing the goods and services to the customer. The Company is a principal if it controls a promised good or service before transferring that good or service to the customer. The Company is an agent if its role is to arrange for another entity to provide the goods or services. Factors considered in making this assessment are most notably; the discretion the Company has in establishing the price for the specified good or service; whether the Company has inventory risk; and whether or not the Company is primarily responsible for fulfilling the promise to deliver the service or good.

This assessment of control requires judgement in particular in relation to certain service contracts. An example is the provision of certain recruitment and learning services where the Company may be assessed to be agent or principal dependent upon the facts and circumstances of the arrangement and the nature of the services being delivered.

Where the Company is acting as a principal, revenue is recorded on a gross basis. Where the Company is acting as an agent, revenue is recorded on a net basis, recognising only the commission or fee earned as revenue.

Licenses

Software licences delivered by the Company can either be right to access (‘active’) or right to use (‘passive’) licences, which determines the timing of revenue recognition. The assessment of whether a licence is active, or passive involves judgement.

The key determinant of an active license is whether or not the Company is required to undertake continuing activities that significantly affect the licensed intellectual property (or the customer has a reasonable expectation that it will do so) and the customer is, therefore, exposed to positive (or negative) impacts resulting from those changes. Where the Company is responsible for any maintenance, continuing support, updates and upgrade, the sale of the initial software is not distinct. All other licences which have significant standalone functionality are treated as passive licences.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 29 -
Revenue (continued)

When software upgrades are sold as part of the software licence agreement (ie. software upgrades are promised to the customer), the Company applies judgement to assess whether the software upgrade is distinct from the licence (ie. a separate performance obligation). If the upgrades are considered fundamental to the ongoing use of the software by the customer, the upgrades are not considered distinct and not accounted for as a separate performance obligation.

For each contract that includes a separate licence performance obligation, the Company considers all the facts and circumstances in determining whether the licence revenue is recognised over-time (active) or at a point-in-time (passive) from the go-live date of the licence.

Deferred and accrued income

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

Where payments received are greater than the revenue recognised up to the reporting date, the Company recognises a deferred income contract liability for this difference. Where payments received are less than the revenue recognised up to the reporting date, the Company recognises an accrued contract income asset for this difference.

At each balance sheet date the Company assesses whether accrued income may be impaired by applying the simplified approach permitted by IFRS 9 (as with trade receivables). Where applicable, accrued income is reduced by appropriate allowances for expected credit losses calculated using this approach.

Financing component

If the timing of payments agreed with the customer provides the Company or the customer with a significant benefit of financing the transfer of good or services, the amount of consideration is adjusted for the effects of the time value of money. The Company does not make an adjustment for the time value of money in the following circumstances:

(i) when the Company expects, at contract inception, that the period between the entity transferring the good or service and the customer paying for it will be one year or less; or

(ii) when the Company receives consideration upfront as part of a transformation phase, this receipt is for reasons other than for financing and the overall consideration that the customer pays is no different as a result of paying this consideration upfront.

There were no contracts with significant financing components in 2025 (2024: none).

Contract types

The Company disaggregates revenue from contracts with customers by contract type, because management believe this best depicts how the nature, amount, timing, and uncertainty of the Company’s revenue and cash flows are affected by economic factors. Categories are: long-term contractual – greater than two years; short-term contractual – less than two years; and transactional. The years being measured from the service commencement date.

Long-term contractual - greater than two years

The Company provides a range of services under contracts with a duration of more than two years. The nature of contracts or performance obligations within this revenue type includes:

(i) long-term outsourced service arrangements in the public and private sectors; and

(ii) active software license arrangements.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 30 -

Revenue (continued)

The majority of long-term contractual contracts form part of a series of distinct goods and services because they are substantially the same service; and have the same pattern of transfer since the series constitutes services provided in distinct time increments (eg. daily, monthly, quarterly or annually services) and therefore treats the series as one performance obligation.

Short-term contractual - less than two years

The nature of contracts or performance obligations within this revenue type includes:

(i) short-term outsourced service arrangements in the public and private sectors; and

(ii) software maintenance contracts.

The Company has assessed that maintenance and support (ie. on-call support, remote support) for software licences is a performance obligation that can be considered capable of being distinct and separately identifiable in a contract if the customer has a passive licence. These recurring services are substantially the same because the nature of the promise is for the Company to ‘stand ready’ to perform maintenance and support when required by the customer.

Each day of ‘standing ready’ is distinct from each subsequent day and is transferred in the same pattern to the customer.

Transactional (point-in-time) contracts

The Company delivers a range of goods or services that are transactional services for which revenue is recognised at the point-in-time when control of the goods or services has transferred to the customer. This may be at the point of physical delivery of goods or services and acceptance by the customer or when the customer obtains control of an asset or service in a contract with customer-specified acceptance criteria.

The nature of contracts or performance obligations within this revenue type includes:

(i) provision of computing hardware goods;

(ii) passive software license agreements;

(iii) commission received as agent from the sale of third-party software; and

(iv) fees received in relation to delivery of professional services.

Master service arrangements (MSA) or Frameworks

MSA or individual call-off agreements are classified as short-term contractual if they include a notice period with committed volumes, otherwise they are classified as transactional (point-in-time) contracts.

1.6
Goodwill

Following initial recognition, goodwill is stated at cost less any accumulated impairment losses. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

At the acquisition date, any goodwill acquired is allocated to the cash-generating units ('CGU') which are expected to benefit from the combination’s synergies. Impairment is determined by assessing the recoverable amount of the CGU to which the goodwill relates. Where the recoverable amount of the CGU is less than the carrying amount, an impairment loss is recognised. Where goodwill forms part of a CGU and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in these circumstances is measured on the basis of the relative values of the operation disposed of and the portion of the CGU retained.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 31 -
1.7
Intangible assets other than goodwill

Intangible assets are valued at cost less accumulated amortisation and impairment. The amortisation method used reflects the expected pattern of consumption of future economic benefits and is generally amortised on a straight-line basis over asset's estimated useful life, which is typically 1.5 to 20 years. In the case of capitalised software development costs, research expenditure is written-off to the income statement in the period in which it is incurred.

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

Intangible assets are derecognised upon disposal, or when no future economic benefits are expected to arise from the continued use of the asset (retired). Any gain or loss arising on derecognition of the asset, calculated as the difference between the net disposal proceeds and the carrying value of the asset, is included in the income statement when the asset is derecognised.

1.8
Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is provided at rates calculated to write-off the cost less estimated residual value of each asset over its expected useful life, as follows:

Freehold buildings and long leasehold property
up to 50 years
Leasehold improvements
period of the lease
Furniture, fittings and equipment
3 - 10 years
Computer equipment
3 - 10 years

An item of property, plant and equipment is derecognised on disposal, or when no future economic benefits are expected to arise from the continued use of the asset (retired). Any gain or loss arising on derecognition of the asset, calculated as the difference between the net disposal proceeds and the carrying value of the asset, is included in the income statement when the asset is derecognised.

1.9
Investments

The Company has investments in subsidiaries which are shown at cost, less provisions for impairment. Investments in subsidiaries are reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

The Company determines whether investments in subsidiaries are impaired based on impairment indicators. If an indicator is identified, an impairment test is performed. This involves estimation of the enterprise value of the investee which is calculated based on the discounted present value of estimated future cash flows, including the recoverable value of any subsidiaries held by the direct investment. The enterprise value of each investment is also adjusted for cash and other debt like items, including intercompany balances. The Company also assesses whether there are indicators to reverse previously recognised impairment losses. Reversals of impairment are only recognised where there has been a change in the estimates used to determine the investment’s recoverable amount since the last impairment loss was recognised.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 32 -
1.10
Impairment of tangible and intangible assets

At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Company makes a formal estimate of the asset's recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. The recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use is determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the asset.

1.11
Inventories

Inventories are stated at the lower of cost and net realisable value.

1.12
Financial instruments

Trade and other receivables

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

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

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised (ie removed from the Company’s balance sheet) when (i) the rights to receive the cash flows from the asset have expired; or, (ii) the Company has transferred its right to receive cash flows from the asset.

Non-recourse trade receivable financing

Trade receivables that are sold without recourse are derecognised at the point of sale when the risks and rewards of the receivables have been fully transferred.

Accrued income

Accrued income is recognised when the revenue recognised on a customer contract exceeds the amount which the Company has the right to receive payment for as at the balance sheet date.

Trade and other payables

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

Cash and cash equivalents

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

Impairment

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

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 33 -

Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at their fair value less any directly attributable transaction costs. After initial recognition, loans and borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method.

Gains and losses are recognised in the income statement when the liabilities are derecognised, as well as through the amortisation process.

1.13
Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available within the Group against which the deductible temporary differences, the carry-forward of unused tax assets and unused tax losses of the Company can be utilised except where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised, reductions are reversed when the probability of future taxable profits improves.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

1.14
Provisions

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

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

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

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

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 34 -
1.15
Pensions

Defined contribution pension schemes

The Company participates in a number of defined contribution pension schemes and for these schemes the Company has no further payment obligations after the contributions have been paid. The contributions are recognised as an employee benefit expense in the income statement when the related service is provided and as they fall due.

Defined benefit pension schemes

The Company also operates a defined benefit pension scheme and participates in other defined benefit pension schemes, all of which require contributions to be made to separate trustee-administered funds. Where the Company participates in funded and unfunded public sector defined benefit pension schemes there are contractual protections in place allowing actuarial and investment risk to be passed on to the end customer through recoveries for contributions paid (as explained further in note 26). The costs of these schemes are reported on a defined contribution basis recognising a cost equal to the contributions payable during the period. No amounts are recognised in the Company's balance sheet.

For the defined benefit pension scheme that the Company operates ('HPS'), the cost of providing benefits under the scheme is determined separately using the projected unit credit method, which attributes entitlement to benefits to the current period (to determine current service cost) and to the current and prior periods (to determine the present value of the defined benefit obligation) and is based on actuarial advice. Past service costs are recognised immediately in the income statement.

When a settlement (eliminating all obligations for benefits already accrued) or a curtailment (reducing future obligations as a result of a material reduction in the scheme membership or a reduction in future entitlement) occurs, the obligation and related plan assets are re-measured using current actuarial assumptions and the resultant gain or loss is recognised in the income statement during the period in which the settlement or curtailment occurs.

Re-measurements of the net defined benefit asset/liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income and will not be reclassified to the income statement. The Company generally determines the net interest expense/income on the net defined benefit asset/liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the period to the then net defined benefit asset/liability, taking into account any changes in the net defined benefit asset/liability during the period as a result of contributions and benefit payments. However, due consideration is made to events which require the net interest expense/income on the net defined benefit asset / liability to be re-measured during the period.

Current and past service costs are charged to operating profit while the net interest cost is included within net finance costs. The net defined benefit asset/ liability in the balance sheet comprises the total present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled. The policy to determine fair value of plan assets is described in note 26. Please refer to note 26 for the Company's assessment of the impact of IFRIC 14 in relation to either recognising a surplus or allowing for the impact of any funding commitments made.

The defined benefit pension scheme numbers in note 26 for HPS relate to the assets/liabilities of the entire (Capita plc group) scheme and not solely to the assets/liabilities connected with the employees of the Company.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 35 -
1.16
Share based payments

The fair value of the equity instrument granted is measured at grant date and is recognised as an expense over the vesting period, which ends on the date on which the relevant employees become fully entitled to the award. Fair value is determined using an option pricing model, only taking into account vesting conditions linked to the price of the shares (market conditions).

No expense is recognised for awards that do not ultimately vest as a result of not meeting performance or service conditions. Where all service and performance vesting conditions are met, the awards are treated as vesting, irrespective of whether or not the market condition is satisfied, since market conditions have been reflected in the fair value of the equity instruments.

At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best estimate of the achievement or otherwise of non-market conditions, the number of equity instruments that will ultimately vest or, in the case of an instrument subject to a market condition, be treated as vesting as described above. The movement in cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding adjustment to equity.

Where the terms of an award are modified or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognised over the original vesting period adjusted for the incremental fair value of any modification ie. the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if this difference is negative.

Where an award is cancelled, it is treated as if it had vested on the date of cancellation, and any cost not yet recognised in the income statement for the award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is deducted from equity, with any excess over the fair value being treated as an expense in the income statement.

1.17
Leases

The Company leases various assets, comprising land and buildings, equipment and motor vehicles.

The determination whether an arrangement is, or contains, a lease is based on whether the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. At the inception of the lease, the Company recognises a right-of-use asset at cost, which comprises the present value of minimum lease payments determined at the inception of the lease. Right-of-use assets are depreciated using the straight-line method over the shorter of estimated life or the lease term.

Depreciation is included within administrative expenses in the income statement. Amendment to lease terms resulting in a change in payments or the length of the lease results in an adjustment to the right-of-use asset and corresponding lease liability. Right-of-use assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be fully recoverable. Right-of-use assets exclude leases with low values and terms of twelve months or less. These leases are expensed to the income statement when incurred.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 36 -

Leases (continued)

The Company as a lessee - Right-of-use assets and lease liabilities

The Company recognises lease liabilities where a lease contract exists and right-of-use assets representing the right to use the underlying leased assets. At lease commencement date, the Company recognises lease liabilities measured at the present value of the lease payments to be made over the lease term.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, over a similar term and with a similar security, the funds necessary to acquire an asset of a similar value to the right-of-use asset in a similar economic environment. Incremental borrowing rates are determined monthly and depend on the term, currency and start date of the lease. The incremental borrowing rate is determined based on a series of inputs including: the risk-free rate based on swap market data; a credit risk adjustment; and an entity-specific adjustment. The lease liability is subsequently remeasured (with a corresponding adjustment to the related right-of-use asset) when there is a change in future lease payments due to a renegotiation or market rent review, a change of an index or rate or a reassessment of the lease term.

Lease payments are apportioned between a finance charge and a reduction of the lease liability based on the constant interest rate applied to the remaining balance of the liability. Interest expense is included within net finance costs in the income statement. Lease payments comprise fixed payments, including in-substance fixed payments such as service charges and variable lease payments that depend on an index or a rate, initially measured using the minimum index or rate at inception date. The payments also include any lease incentives and any penalty payments for terminating the lease, if it is anticipated that the Company will exercise that option.

The lease term determined comprises the non-cancellable period of the lease contract. Periods covered by an option to extend the lease are included if the Company has reasonable certainty that the option will be exercised, and periods covered by an option to terminate are included if it is reasonably certain that this will not be exercised.

The Company has elected to apply the practical expedient in IFRS 16 paragraph 15 not to separate non-lease components such as service charges from lease rental charges.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 37 -

Leases (continued)

The Company as a lessor

When the Company acts as a lessor, it determines at the lease commencement whether the lease is a finance lease or an operating lease.

To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee all of the risks and rewards of ownership in relation to the underlying asset. If this is the case, then the lease is a finance lease. If not, then it is an operating lease.

The Company acts as an intermediate lessor of property assets and equipment. When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses whether the sub-lease is a finance or operating lease in the context of the right-of-use asset arising from the head lease.

In instances where the Company is the intermediate lessor and the sub-lease is classified as a finance lease, the Company recognises a net investment in sub-leases for amounts recoverable from the sub-lessees while derecognising the respective portion of the right-of-use asset. The lease liability is retained in the balance sheet. The net investment in sub-leases is classified as current or non-current finance assets in the balance sheet according to whether or not the amounts will be recovered within twelve months of the balance sheet date.

Finance income recognised in respect of net investment in sub-leases is presented within net finance costs in the income statement. The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term. The Company accounts for finance lease receivables, using incremental borrowing rate where the interest rate implicit in sub-lease is not easily determinable.

1.18
Foreign exchange

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

1.19
Group accounts

The financial statements present information about the Company as an individual company and not about its Group. The Company has not prepared Group financial statements because it is fully exempt from the requirement to do so by section 400 of the Companies Act 2006 since it is a subsidiary company of Capita plc, a company incorporated in England and Wales, and is included in the consolidated financial statements of that company.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 38 -
1.20
Guarantee

Where the Company enters into financial guarantee contracts, the Company recognises the financial guarantee as an asset or liability at fair value. The fair value is the present value of the quantified benefit of the financial guarantee contract over the term of the financial guarantee contract plus or minus transaction costs directly attributable to the issue of the financial guarantee contract. The amount initially recognised is amortised to profit and loss in line with the underlying asset or liability, resulting in the fair value of the financial guarantee contract being zero at the point the underlying exposure is zero. In the event of a renewal or extension of the financial guarantee contract, the fair value at the point of renewal or extension is determined as at initial recognition and the resulting asset or liability is amortised to the profit and loss in line with the renewed or extended underlying asset or liability. Where the Company enters into financial guarantee contract in respect of a subsidiary, the Company recognises a corresponding increase or decrease in its investment in the subsidiary.

1.21
Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on whether they are current or non-current.

An asset is current when it is:

- Expected to be realised or intended to be sold or consumed in the normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realised within twelve months after the balance sheet date; or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the balance sheet date.

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in the normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the balance sheet date; or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the balance sheet date.

The Company classifies all other liabilities as non-current.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 39 -
2
Significant accounting judgements, estimates and assumptions

The preparation of financial statements in accordance with generally accepted accounting principles requires the directors to make judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the financial statements and the reported income and expense during the presented periods. Although these judgements and assumptions are based on the directors’ best knowledge of the amount, events or actions, actual results may differ.

The key judgements and sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows :

- Contract accounting:

  - Due to the size and complexity of some of the Company’s contracts, there are significant judgements to be applied, specifically in assessing: (i) the recoverability of contract fulfilment assets; and (ii) the completeness of the customer and onerous contract provisions. These judgements are dependent on assessing the contract’s future profitability. It is possible that outcomes within the next financial year may be different from management’s assumptions and could require a material adjustment to the carrying amounts of contract assets and onerous contract provisions. It should be noted that while management must make judgements in relation to applying the revenue recognition policy and recognition of related balance sheet items (trade receivables; deferred income; and accrued income) these are not considered significant judgements.

  - Significant judgement is also applied when estimating variable consideration. This judgement requires an assessment of the amount of variable consideration to be recognised such that it is highly probable that no revenue reversal will occur. It is possible that outcomes within the next financial year may be different from management’s assumption, resulting in additional, or reduced, revenues.

  - Significant judgement is exercised by management as to when to recognise revenue from variations or scope changes on long-term contracts. There is a risk that revenue may be recognised even though it is not probable that consideration will be collected, which could be due to uncertainties over contractual terms and ongoing negotiations with clients. Judgement is also required when customers request scope changes to determine if there is a contract modification or a contract termination followed by a new contract. Contract terminations can lead to the immediate recognition of any deferred income being held for recognition in future periods.

- Capitalisation of contract fulfilment assets: Judgement is applied by the Company when determining what costs qualify to be capitalised in particular when considering whether these costs are incremental and when considering if costs generate or enhance resources to be used to satisfy future performance obligations and whether costs are expected to be recoverable.

- Impairment of investment in subsidiaries: The Company determines whether investments in subsidiaries are impaired based on impairment indicators. If an indicator is identified, an impairment test is performed. This involves estimation of the enterprise value of the investee which is determined based on the greater of discounted future cash flows at a suitable discount rate or through the recoverable value of the investments held by the investee company.

- Deferred tax asset recognition: In determining the recognition of deferred tax (refer to note 9), management assesses the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax assets are recognised to the extent that taxable temporary differences exist, and it is considered probable that future taxable profits will be available against which the assets can be utilised before their expiry. The availability of future profits must be assessed against forecasts and other supporting evidence. This determination of future forecasts is based on management’s judgement. It requires judgement regarding whether future profit forecasts are considered ‘more likely than not’ as supporting evidence for deferred tax asset recognition.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
2
Significant accounting judgements, estimates and assumptions
(Continued)
- 40 -

- Measurement of defined benefit pension obligations: The accounting cost of these benefits and the present value of pension liabilities involve judgements about uncertain events including such factors as the life expectancy of members, the salary progression of current employees, price inflation and the discount rate used to calculate the net present value of the future pension payments. The Company uses estimates for all these factors in determining the pension costs and liabilities incorporated in the financial statements. The assumptions reflect historical experience and judgement regarding future expectations.

The discount rate is derived from the yields available on high quality corporate bonds of appropriate term and currency as at the balance sheet date. Over the year these yields have marginally increased, resulting in the discount rate at 31 December 2025 of 5.55% pa (31 December 2024: 5.5% pa).

The Company continued to set Retail Price Inflation (RPI) in accordance with the market break-even expectations less an inflation risk premium (IRP), which has remained at 0.30% pa. For Consumer Price Inflation (CPI), the Company reduced the assumed difference between RPI and CPI to an average of 0.50% per annum (2024: 0.55% per annum).

The longer-term implications of the Covid-19 pandemic on future life expectancy remain uncertain. In June 2025, the Continuous Mortality Investigation (CMI) published a new model (CMI 2024) that includes population experience up to 2024. The CMI 2024 model introduced significant changes to mortality projections, aiming for a more data-driven approach that reflects recent mortality trends and the impact of the Covid-19 pandemic. The proposed changes are expected to lead to, overall, slightly longer assumed life expectancies.

The Company remains aware of the 2023 high court case (and subsequent appeal in 2024) that considered the validity of deeds where no Section 37 certificate (confirming that the minimum level of benefits had not been breached) was attached to the deed. The UK Government announced in 2025 that they will introduce legislation to enable schemes to retrospectively obtain the necessary actuarial confirmations required where these are not currently available. It is expected that this will resolve the issue in the majority of cases.

3
Revenue

The total revenue of the C ompany for the year has been derived from its principal activity largely undertaken in the United Kingdom.

4
Operating profit
Notes
2025
2024
Operating profit for the year is stated after charging/(crediting)
£m
£m
(Income)/expense from foreign exchange differences
(0.2)
0.1
Depreciation of property, plant and equipment
10
4.6
6.2
Depreciation of right-of-use assets
10
22.5
26.1
(Profit)/loss on disposal of property, plant and equipment
(0.1)
0.1
Amortisation of intangible assets
11
4.9
3.8
Contract fulfilment assets - impairment, derecognition and utilisation
14
79.8
61.4
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
4
Operating profit
(Continued)
- 41 -

Audit fees are borne by the ultimate parent company, Capita plc. The audit fee for the current period was £0.2m (2024: £0.2m). The Company has taken advantage of the exemption provided by regulations 6(2)(b) of The Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008 not to provide information in respect of fees for other (non-audit) services because this information is required to be given in the consolidated financial statements of the ultimate parent company, which it is required to prepare in accordance with the Companies Act 2006.

5
Investment income
2025
2024
£m
£m
Dividend income from shares in subsidiary companies
-
0
135.9
-
0
135.9

The Company received dividends from Capita Justice & Secure Services Holdings Limited (£73.4m), Capita Secure Information Solutions Limited (£58.0m), Capita One Limited (£4.2m) and other subsidiaries (£0.3m) during the year ended 31 December 2024.

6
Other income
2025
2024
£m
£m
Rental income
19.1
10.9
Net gain on business disposal
-
230.3
19.1
241.2

The gain on disposal recognised in 2024 pertains to the sale of the Company's investments in Capita One Limited and Fera Science Limited.

7
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised

2025
2024
£m
£m
Impairment of intangible assets (refer to note 11)
0.5
0.2
Impairment of property, plant and equipment (refer to note 10)
0.3
1.5
Impairment of investments in subsidiaries (refer to note 12)
41.3
132.2
42.1
133.9
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 42 -
8
Net finance income
2025
2024
£m
£m
Interest income
Interest receivable from Group companies
35.1
26.5
Interest income on finance lease assets
5.4
5.6
Net interest income on the net defined pension schemes
2.2
2.1
42.7
34.2
Interest expense
Interest expense on bank overdrafts and loans
(0.6)
(1.6)
Interest expense on lease liabilities
(16.6)
(17.8)
Interest expense on non-recourse trade receivables facility
(2.3)
(2.5)
(19.5)
(21.9)
Total net finance income
23.2
12.3
9
Income tax
The major components of income tax charge are:
2025
2024
£m
£m
Current tax
UK corporation tax
36.0
20.2
Adjustments in respect of prior periods
(0.2)
2.3
35.8
22.5
Deferred tax
Origination and reversal of temporary differences
(7.3)
15.7
Total tax charge
28.5
38.2
2025
2024
Statement of comprehensive income
£m
£m
Tax movements in relation to actuarial loss on defined benefit plans
Current income tax
Current income tax credit
-
0
(6.8)
Deferred income tax
Origination and reversal of temporary differences
(2.6)
4.0
Total tax credit reported in other comprehensive income statement
(2.6)
(2.8)
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
9
Income tax
(Continued)
- 43 -

The charge for the year can be reconciled to the profit per the income statement as follows:

2025
2024
£m
£m
Profit before taxation
98.7
323.6
Expected tax charge based on the weighted average Corporation Tax rate of 25.00% (2024: 25.00%)
24.7
80.9
Expenses not deductible for tax purpose
10.9
40.8
Non-taxable income
(0.1)
(98.8)
Change in unrecognised deferred tax assets
(6.8)
13.0
Adjustment in respect of current income tax of prior periods
(0.2)
2.3
Total adjustments
3.8
(42.7)
Total tax charge reported in the income statement
28.5
38.2
Balance sheet
Income statement
2025
2024
2025
2024
£m
£m
£m
£m
Deferred tax assets
Decelerated capital allowances
39.6
34.8
(4.8)
6.9
Tax losses
3.8
-
0
(3.8)
4.0
Pension schemes' asset
(6.7)
(8.7)
0.6
6.2
Contract fulfilment assets
-
0
-
0
-
0
(0.1)
Other timing differences
4.3
5.0
0.7
(1.3)
Deferred tax assets
41.0
31.1
Deferred tax (credit)/charge to income statement
(7.3)
15.7
Actuarial differences recognised as other comprehensive income
(2.6)
4.0
Total deferred tax movement in the period
(9.9)
19.7

In accordance with the stated accounting policy for taxation in note 1.13 to the financial statements, the utilisation and recognition of a deferred tax asset is dependent on the existence of sufficient future taxable profits. As at 31 December 2025, based on forecast profits, the Company has concluded in line with the stated policy that no deferred tax asset should be recognised in respect of gross fixed asset timing differences of £103.4m (2024: £116.9m), trading losses of £141.9m (2024: £158.5m), capital losses of £6.9m (2024: £6.9m) and other short term timing differences of £2.8m (2024: £nil).

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 44 -
10
Property, plant and equipment
Freehold buildings and long leasehold property
Leasehold improvements
Furniture, fittings and equipment
Computer equipment
Total
£m
£m
£m
£m
£m
Cost
At 1 January 2025
9.2
20.8
2.5
9.3
41.8
Additions
-
0
0.9
-
0
0.4
1.3
Disposals
-
0
(0.2)
-
0
(0.4)
(0.6)
Intragroup transfer
-
0
-
0
-
0
0.4
0.4
Asset retirement
-
0
(4.0)
(2.4)
(1.7)
(8.1)
At 31 December 2025
9.2
17.5
0.1
8.0
34.8
Accumulated depreciation and impairment
At 1 January 2025
6.6
10.0
2.3
5.9
24.8
Charge for the year
0.3
2.8
-
0
1.5
4.6
Impairment
-
0
0.1
0.2
-
0
0.3
Disposals
-
0
(0.2)
-
0
(0.4)
(0.6)
Intragroup transfer
-
0
-
0
-
0
0.4
0.4
Asset retirement
-
0
(4.0)
(2.4)
(1.7)
(8.1)
At 31 December 2025
6.9
8.7
0.1
5.7
21.4
Net book value
At 31 December 2025
2.3
8.8
-
0
2.3
13.4
At 31 December 2024
2.6
10.8
0.2
3.4
17.0
Right-of-use assets
Land and buildings
Equipment
Motor vehicles
Total
£m
£m
£m
£m
Net book value at 1 January 2025
123.0
1.7
6.9
131.6
Additions
1.0
0.2
4.7
5.9
Depreciation charge
(18.6)
(0.7)
(3.2)
(22.5)
Impairment
(0.1)
-
0
-
0
(0.1)
Other movements
7.4
(0.2)
(0.2)
7.0
Net book value at 31 December 2025
112.7
1.0
8.2
121.9

Other movements include amendments to existing leases and terminations.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 45 -
11
Intangible assets
Goodwill
Software and licenses
Total
£m
£m
£m
Cost
At 1 January 2025
28.8
29.3
58.1
Additions
-
0
6.8
6.8
Asset retirement
-
0
(2.8)
(2.8)
At 31 December 2025
28.8
33.3
62.1
Amortisation and impairment
At 1 January 2025
2.6
13.3
15.9
Charge for the year
-
0
4.9
4.9
Impairment
-
0
0.5
0.5
Asset retirement
-
0
(2.8)
(2.8)
At 31 December 2025
2.6
15.9
18.5
Net book value
At 31 December 2025
26.2
17.4
43.6
At 31 December 2024
26.2
16.0
42.2
12
Investments
Subsidiaries
£m
Cost
At 1 January 2025 & 31 December 2025
355.1
Impairment
At 1 January 2025
224.1
Impairment charges ◙
41.3
At 31 December 2025
265.4
Net book value
At 31 December 2025
89.7
At 31 December 2024
131.0
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
12
Investments
(Continued)
- 46 -

The Company considered whether there was an indicator of impairment in investments in subsidiaries as at 31 December 2025. At that date the Company’s ultimate parent company, Capita plc, identified an indicator of impairment existed due to the market capitalisation of the Group being below the carrying value of Capita plc’s net assets. As a key trading and holding company for the Group, this indicator of impairment is also considered to be relevant for the Company, and so an impairment test was carried out for the Company, comparing the carrying value of each subsidiary investment held by the Company with its recoverable amount. The enterprise value of each investment is calculated based on the present value of estimated future cash flows discounted at the current market rate of return. For non-trading subsidiaries this is based on the net asset value of the entity as at 31 December 2025, which is considered to not be materially different to the fair value derived by other means. For all other entities, recoverable amount is estimated on a discounted cash flow basis. Recoverable amounts will also factor in the recoverable amount of an entity’s direct and indirect subsidiaries.

For discounted cash flow calculations, the cash flow projections used for the impairment test are derived from the 2026-2028 business plan approved by the Board of Directors. Key assumptions in the business plan include the delivery of planned revenue growth. The enterprise value is then calculated based on the present value of estimated future cash flows discounted at the current market rate of return. The long-term growth rate is based on economic growth forecasts by recognised bodies and this has been applied to the forecast cash flows for the terminal period. The 2025 long-term growth rate is 1.5% (2024: 1.6%). The average pre-tax discount rate used for the impairment test is 10.2% (2024: 10.5%). Management estimates discount rates using nominal post-tax rates of comparator companies. The discount rates reflect the latest market assumptions for the risk-free rate, the equity risk premium and the cost of debt, which are all based on publicly available external sources.

◙ As a result of the impairment test, the Company impaired its investment in Capita Property and Infrastructure Limited by £42.5m and Capita Secure Information Solutions Limited by £0.4m due to a reduction in recoverable value of these investments. The Company also reversed the impairment charge of £1.6m against its investment in Tascor Services Limited due to an improvement in the recoverable value of this investment.

On 26 March 2026, the Group agreed to sell its private sector contact centre business to Inspirit Capital. The Company’s direct investment in Capita Business Support Services Ireland Limited forms part of the sale perimeter and the Company will receive potential contingent consideration payable to the Company of up to £7.5m expected to be paid in 2027 and 2028 which is based on future financial performance of the disposed investment.

For these investments, recoverable value has been determined on a fair value less cost of disposal basis. As per management, expected net proceeds upon disposal provide best estimate of recoverable value for these investments. However, potential contingent consideration depends on the future financial performance of the disposed investments and remain uncertain. Hence the estimated sale proceeds net of expected cost of disposal is assessed to be nil. Accordingly, the investment in Capita Business Support Services Ireland Limited was impaired by £1 as at 31 December 2025 in advance of its planned disposal.

Sensitivity analysis

The impairment testing as described is reliant on the accuracy of management’s forecasts and the assumptions that underlie them; and on the selection of the discount and growth rates to be applied. To gauge the sensitivity of the result to a change in any one, or combination of the assumptions that underlie the model, a number of scenarios were developed to identify the range of reasonably possible alternatives and measure which investments are the most susceptible to an impairment should the assumptions used be varied. This sensitivity analysis is only applicable to those investments which have not already been fully impaired.

The sensitivity scenarios applied estimate the additional impairment required (with all other variables being equal) by: an increase in discount rate of 1%, or a decrease of 1% in the long-term growth rate (for the terminal period) for each of the investments; or by the severe but plausible downsides applied to the base-case projections for assessing going concern and viability, without mitigations; and from all scenarios together. The below table discloses the investment where an impairment is triggered in any of the sensitivity scenarios.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
12
Investments
(Continued)
- 47 -

Subsidiary | 1% increase in discount rate | 1% decrease in Long term growth rate | Severe but plausible downside | Combination sensitivity
| £m | £m | £m | £m
Electra-Net (UK) Limited | 0.9 | 0.8 | 1.3 | 2.8

As at 31 December 2025, the estimated recoverable amount of the Company’s investment in Electra-Net (UK) Limited exceeded its carrying value under sensitivity scenarios shown in the table above but economic uncertainties continue to lead to increased judgement being applied, particularly in forecasting future financial performance. The impairment testing as described is reliant on the accuracy of management’s forecasts and if the plan fails to deliver the anticipated efficiencies and growth in the Company’s investment in Electra-Net (UK) Limited, then this could give rise to an impairment of investment in future periods.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 48 -
13
List of Subsidiaries

Details of the company's subsidiaries at 31 December 2025 are:

Name of company
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
Capita HCH Limited
1
Active
Ordinary
100.00
-
Capita Justice & Secure Services Holdings Limited
6
In liquidation
Ordinary
100.00
-
Fire Service College Limited
1
Active
Ordinary
100.00
-
WN Updata Communications Ltd (formerly known as "Daisy Updata Communications Limited")
2
Active
Ordinary
50.00
-
Electra-Net (UK) Limited
1
Active
Ordinary
100.00
-
RE (Regional Enterprise) Limited
1
Active
Ordinary
100.00
-
Urban Vision Partnership Limited
1
Active
Ordinary
50.10
-
Smart DCC Limited
1
Active
Ordinary
100.00
-
Tascor Services Limited
1
Active
Ordinary
100.00
-
Entrust Support Services Limited
3
Active
Ordinary
51.00
-
Capita Business Support Services
Ireland Limited
4
Active
Ordinary
100.00
-
Capita Corporate Director Limited
1
Dormant
Ordinary
100.00
-
Capita GMPS Trustees Limited
1
Dormant
Ordinary
100.00
-
Capita Group Secretary Limited
1
Dormant
Ordinary
100.00
-
CPLAS Trustees Limited
1
Dormant
Ordinary
100.00
-
Grosvenor Career Services Limited
1
Dormant
Ordinary
100.00
-
Capita Secure Information Solutions Limited
1
Active
Ordinary
100.00
-
Capita Property and Infrastructure Limited
1
Active
Ordinary
100.00
-
Capita Managed IT Solutions Limited
5
Active
Ordinary
100.00
-
Retain International Limited
1
Active
Ordinary
-
100.00
Capita Property and Infrastructure International Holdings Limited
1
Dormant
Ordinary
-
100.00
Capita Property and Infrastructure International Limited
1
Dormant
Ordinary
-
100.00
Woolf Limited
1
Active
Ordinary
-
100.00
Symonds Travers Morgan (Malaysia) SDN. BHD- Philippine Branch
7
Dormant
Ordinary
-
100.00
Capita Property and Infrastructure Consultants LLC
8
In liquidation
Ordinary
-
49.00
Capita Property and Infrastructure (Structures) Limited
1
Dormant
Ordinary
-
100.00
Capita Symonds Limited (Libya Branch)
9
Dormant
Ordinary
-
100.00
Capita Symonds Saudi Arabia Limited
10
Dormant
Ordinary
-
50.00
Retain International (Holdings) Limited
1
Active
Ordinary
-
100.00
Capita Norman + Dawbarn Limited
11
In liquidation
Ordinary
-
97.30
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
13
List of Subsidiaries
(Continued)
- 49 -

Registered office addresses:

1
First Floor, 2 Kingdom Street, Paddington, London, England, W2 6BD
2
Wavenet Group, Second Floor One Central Boulevard Central Boulevard, Blythe Valley Park, Shirley, Solihull, England, B90 8BG
3
The Riverway Centre, Riverway, Stafford, ST16 3TH
4
Unit B, West Cork Business & Technology Park, Clonakilty, Co. Cork, P85 YH98, Ireland
5
Hillview House, 61 Church Road, Newtownabbey, Co Antrim, BT36 7LQ, Northern Ireland
6
1 More London Place, London, SE1 2AF
7
Suite 712 PS Bank Tower, Sen.Gil Puyat Avenue, Metro Manila, Makati City 1203, Philippines
8
1004 Bin Hamoodah Building, Khalifa St., PO Box 113 740, Abu Dhabi, United Arab Emirates
9
Sough Thalat Buildings 5, Apartment 2, Tripoli, Libya
10
King Abdul Aziz Street, PO Box 7052, Dammam, Saudi Arabia
11
10th Floor, UBA House, No 57, Marina Street, Lagos Island, Lagos
14
Contract fulfilment assets
£m
At 1 January 2024
226.6
Additions
57.9
Intragroup transfer
(4.8)
Utilised during the year
(59.6)
Derecognition
(1.7)
Impairment
(0.1)
At 31 December 2024
218.3
Additions
36.9
Utilised during the year
(68.7)
Derecognition
(11.1)
At 31 December 2025
175.4

In preparing these financial statements, the Company undertook a review to identify indicators of impairment of contract fulfilment assets. The Company determined whether or not the contract fulfilment assets were impaired by comparing the carrying amount of the assets to the remaining amount of consideration that the Company expects to receive less the costs that relate to providing services under the relevant contract. In determining the estimated amount of consideration, the Company used the same principles as it does to determine the contract transaction price, except that any constraints used to reduce the transaction price were removed for the impairment test.

In accordance with the accounting policy set out in note 1.5, if a contract or specific performance obligation exhibited marginal profitability or other indicators of impairment, judgement was applied to ascertain whether or not the future economic benefits from the contract were sufficient to recover its related fulfilment assets. In performing this impairment assessment, management is required to make an assessment of the costs to complete the contract. The ability to accurately forecast such costs involves estimates around cost savings to be achieved over time, anticipated profitability of the contract, as well as future performance against any contract-specific key performance indicators that could trigger variable consideration, or service credits.

Following this review, management has taken the decision to impair costs capitalised as contract fulfilment assets of £nil (2024: £0.1m).

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 50 -
15
Financial assets
Non-current
2025
2024
£m
£m
Finance lease receivable
91.8
91.5
91.8
91.5
Current
2025
2024
£m
£m
Finance lease receivable
4.8
4.2
4.8
4.2
2025
2024
£m
£m
Maturity analysis - contractual undiscounted cash flows
Less than one year
10.1
9.5
One to two years
10.2
10.0
More than two years
124.9
130.4
Total undiscounted lease payments receivable
145.2
149.9
Unearned finance income
(48.6)
(54.2)
Net investment
96.6
95.7

The Company sublets leased property it no longer utilises for its own operations. Two sub-leases include an option for the lessee to terminate the lease earlier than the Company’s lease with its landlord. For both of these sub-leases, management assessed it was reasonably certain that the break clause will not be exercised and, accordingly, determined that the sub-lease is a finance lease. This resulted in the recognition of a finance lease receivable. This judgement was based on a number of factors as prescribed within IFRS 16 such as incentive to lessee, importance of the location to the lessee’s operations, shorter non-cancellable period of the lease, and the lessee’s modifications to, and customisation of, the property. At 31 December 2025, the combined lease receivable related to these properties was £95.2m and is included in the balance above.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 51 -
16
Trade and other receivables
Current
2025
2024
£m
£m
Trade receivables
35.9
38.9
Contract fulfilment assets
2.4
3.5
Amounts due from Group companies
423.6
865.9
Other receivables
16.6
0.2
Accrued income
93.5
80.4
Prepayments
19.5
19.5
591.5
1,008.4
Non-current
2025
2024
£m
£m
Amount due from Group companies
556.5
-
0
Prepayments
1.7
2.7
558.2
2.7

Amounts due from Group companies are repayable on demand. These are not chargeable to interest except for the amounts due from Capita plc, on which interest is charged as per the prevailing Bank of England rate.

The Group undertook a review of the funding structure of its key subsidiaries during the second half of the year. Following this review, £556.5m of the Company’s receivables due from other Group companies were reclassified from current to non‑current. These balances remain repayable on demand, together with any accrued interest; however, based on the conclusions of the review undertaken, there is no longer the expectation that the Company will realise these amounts within twelve months of the balance sheet date.

Non-recourse trade receivable financing facility

The value of the invoices sold under a non-recourse trade receivable financing facility was £16.0m at 31 December 2025 (2024: £12.5m).

The cost of selling such invoices totalled £2.3m (2024: £2.5m) and was included in net finance costs (see note 8) in the income statement.

17
Cash and cash equivalents
2025
2024
£m
£m
Cash at bank and in hand
9.2
4.4
9.2
4.4
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 52 -
18
Financial liabilities
Current
2025
2024
£m
£m
Bank overdrafts
-
0
2.4
-
0
2.4
19
Trade and other payables
Current
2025
2024
£m
£m
Trade payables
68.6
43.2
Amount due to Group companies
17.8
7.9
Accruals
77.7
76.3
Other taxes and social security
43.3
36.1
Other payables
31.3
14.1
238.7
177.6

Amounts due to Group companies are repayable on demand.

20
Lease liabilities

Lease liabilities are classified based on the amounts that are expected to be settled within the next twelve months and after more than twelve months from the reporting date, as follows:

2025
2024
£m
£m
Current liabilities
28.3
28.9
Non-current liabilities
237.2
253.0
265.5
281.9
2025
2024
Amounts recognised in the income statement include the following:
£m
£m
Interest on lease liabilities
16.6
17.8

The total cash outflow for leases was £46.8m (2024: £54.0m) consisting of interest paid of £16.6m (2024: £17.8m) and capital element of £30.2m (2024: £36.2m).

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
20
Lease liabilities
(Continued)
- 53 -
2025
2024
Maturity analysis - contractual undiscounted cash flows
£m
£m
Less than one year
43.2
45.2
One to two years
38.4
38.5
More than two years
290.3
319.7
Total undiscounted liabilities at 31 December
371.9
403.4
21
Provisions
2025
2024
£m
£m
Current
12.3
17.3
Non-current
0.9
5.8
13.2
23.1
Property provision
Claims & litigation provison
Business exit provision
Customer contract provision
Cost reduction provision
Other provisions
Total
£m
£m
£m
£m
£m
£m
£m
At 1 January 2025
3.5
1.4
3.9
8.5
5.4
0.4
23.1
Provisions in the year
2.1
1.0
0.1
2.3
7.4
0.2
13.1
Releases in the year
(0.2)
(0.2)
(0.2)
(4.4)
(0.3)
(0.1)
(5.4)
Utilisation
(2.0)
(0.5)
(1.8)
(4.4)
(8.9)
-
(17.6)
At 31 December 2025
3.4
1.7
2.0
2.0
3.6
0.5
13.2
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
21
Provisions
(Continued)
- 54 -

The property provision primarily covers obligations to make dilapidation payments on the Company’s leased properties. The Company’s assessment is that the likelihood of a cash outflow at lease commencement is remote. Usually, the event which changes the assessment of the likelihood of a cash outflow to being probable, and which therefore triggers the provision, occurs as the Company nears the end of a lease and the condition of the property and the likelihood of dilapidations being payable can be assessed. Typically, an outflow would occur within one to three years of the provision being made. The provision is based on the best estimate of the cost of performing required works or the expected settlement with the landlord. The provision also includes unavoidable running costs of leasehold property where the space is vacant or currently not planned to be used for ongoing operations but excludes the impact of the cost reduction programme (where such costs are included in the cost reduction provision). The expectation is that this expenditure will be incurred over the remaining periods of the leases which vary up to two years.

The Company is exposed to claims and litigation proceedings arising in the ordinary course of business. These matters are reassessed regularly and where obligations are probable and estimable, provisions are made based on the Company’s best estimate of the expenditure to be incurred. Due to the nature of these claims, the Company cannot give an estimate of the period over which this provision will unwind.

The business exit provision relates to the cost of exiting businesses through disposal and the costs of separating the businesses being disposed. These are likely to unwind over a period of one to four years.

The customer contract provision includes onerous contract provisions in respect of customer contracts where the costs of fulfilling a contract (both incremental and costs directly related to contract activities) exceeds the economic benefits expected to be received under them, claims/obligations associated with missed milestones in contractual obligations, and other potential exposures related to contracts with customers. These provisions are forecasted to unwind over periods up to two years.

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

Other provisions relates to provisions in respect of other potential exposures arising as a result of the nature of some of the operations that the Company provides. These are likely to unwind over periods of up to five years.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 55 -
22
Deferred income
2025
2024
£m
£m
Current
Deferred income
265.8
328.4
265.8
328.4
Non-current
Deferred income
6.1
21.5
6.1
21.5

The deferred income balances solely relate to revenue from contracts with customers. Movements in the deferred income balances were driven by transactions entered into by the Company in the normal course of business during the year. Revenue recognised in the reporting period that was included in the deferred income balance at the beginning of the period was £324.1m (2024: £356.3m).

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 56 -
23
Share based payments

The Company participates in various share option schemes operated by Capita plc, the ultimate parent company. Full details of these schemes are contained in Capita plc's Annual Report. Details of the schemes are as follows:

Deferred annual bonus plan

This scheme is applicable to executive directors. Under this scheme, awards are made annually consisting of only deferred shares, which are linked to the payout under the annual bonus scheme (details of which are contained in the directors’ remuneration report on pages 119 to 137 of Capita plc's Annual Report).

The value of deferred shares is determined by the pay-out under the annual bonus scheme: half of the annual bonus is paid in cash and the remainder is deferred into shares under the deferred annual bonus plan or the Capita executive plan. Directors have the option to defer up to 100% of their annual bonus into deferred shares or net bonus into a restricted share award. The deferred/restricted shares are held for a period of three years from the date of award, during which they are not forfeitable, except in the case of dismissal for gross misconduct.

The weighted average share price of options at the date of exercise in 2025 was £1.88 (2024: £0.12). The weighted average share price during the year was £2.41 (2024: £0.17).

The total cash value of the deferred shares awarded during the year was £0.3m (2024: £nil).

Capita Executive Plan 2021

The Capita Executive Plan was approved by shareholders at the 2021 Capita plc AGM. Under this plan, restricted share awards (RSAs) are granted to executives.

With the exception of the executive directors, RSAs granted in 2023 and 2024 are split into three equal tranches that vest on the first, second and third anniversary of the grant date. The 2023 and 2024 awards are not subject to specific performance conditions, however there is a general underpin regarding Remuneration Committee satisfaction with underlying financial and operational performance of Capita over the performance period. The 2025 award is subject to the above general underpin, and an additional, preceding underpin: Capita’s share price (adjusted for the value of dividends as appropriate) must be 280p or above as at 31 December 2027. The Remuneration Committee may apply discretion to vesting levels if this underpin is not met.

Details of the Capita Executive Plan RSAs made to executive directors and the associated underpins are set out in the directors’ remuneration report, on pages 132 and 133 of Capita plc's 2025 annual report.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 57 -
24
Share capital
2025
2024
2025
2024
Number
Number
£
£
Allotted, called up and fully paid
Ordinary shares of £1 each
At 1 January and 31 December
13,269
13,269
13,269
13,269
25
Share premium
2025
2024
£m
£m
Ordinary shares of £1 each
At 1 January and At 31 December
60.0
60.0
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 58 -
26
Retirement benefit schemes

The Company operates both defined benefit and defined contribution pension schemes. The pension charge for the defined contribution pension schemes for the year is £24.5m (2024: £24.2m). The pension charge excludes pension contributions paid by the Company on behalf of employees via a salary sacrifice arrangement.

The Company participates in funded and unfunded public sector defined benefit pension schemes, however contractual protections are in place allowing actuarial and investment risk to be passed on to the end customer through recoveries for contributions paid. The nature of these arrangements vary from contract to contract but typically allow for the majority of contributions payable to the schemes in excess of an initial rate agreed at the inception to be recovered from the end customer, as well as exit payments (for funded schemes) payable to the schemes at the cessation of the contract, such that the Company's net exposure to actuarial and investment risk is immaterial.

Approximately £6m of employer contributions were paid to these schemes during 2025 (2024: £6m) which is included in the above defined contribution scheme pension charge.

Retirement obligations are disclosed in relation to one (2024: one) defined benefit pension scheme. This is the HPS for which the Company is the Principal Employer.

Company's main defined benefit pension (HPS)

HPS closed to future accrual for most members in 2017. Currently around 100 members (across all Capita companies) are continuing to accrue benefits out of a total membership of around 16,500 members.

Responsibility for the operation and governance of the HPS lies with a corporate trustee which is independent of the Company. The HPS Trustee is required by law to act in the interest of the HPS's beneficiaries in accordance with the rules of the HPS and relevant legislation (which includes the Pension Schemes Act 1993, the Pensions Act 1995 and the Pensions Act 2004). The nature of the relationship between the Company and the HPS Trustee is also governed by the rules of the HPS and relevant legislation. The HPS Trustee is chaired by an independent trustee.

The assets of the HPS are held in a separate fund (administered by the HPS Trustee) to pay long-term pension liabilities to the beneficiaries. The HPS Trustee invests the assets in accordance with its Statement of Investment Principles, which is regularly reviewed. The HPS Trustee maintains oversight of the investment strategy; however, the trustee has delegated investment decisions to a fiduciary manager.

A full actuarial valuation of the HPS is carried out every three years by an independent actuary for the HPS Trustee, with the last full valuation carried out at 31 March 2023. The purpose of that valuation is to design a funding plan to ensure that the pension scheme has sufficient assets available to meet future benefit payments, based on assumptions agreed between the HPS Trustee and the Company. The 31 March 2023 valuation showed a funding surplus of £51.4m (31 March 2020: funding deficit of £182.2m). This equates to a funding level of 105% (31 March 2020: 89%).

Given the funding position of the HPS, the Company and the HPS Trustee agreed that no further deficit recovery contributions from the Company are required other than those already committed 1 as part of the 31 March 2020 actuarial valuation. The Company paid all the outstanding deficit contributions in 2024. There are no further agreed deficit contributions to be paid at this time.

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

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
26
Retirement benefit schemes
(Continued)
- 59 -

Finally, the Company agreed an average employer contribution rate of 23.6% towards the expected cost of benefits accruing.

The next full actuarial valuation is due to be carried out with an effective date of 31 March 2026 and as part of that valuation the contribution requirements will be reviewed, and if necessary, amended. For the purpose of these financial statements, an independent qualified actuary projected the results of the 31 March 2023 actuarial valuation to 31 December 2025 taking into consideration the relevant accounting requirements.

Approximate funding updates are produced at each scheme anniversary when a full actuarial valuation is not being undertaken. The most recent funding update as at 31 March 2025 showed a funding surplus of £77.1m (equating to a funding level of 108%).

The valuation of liabilities for funding purposes (the actuarial valuation) differs to the valuation for accounting purposes (which is shown in these financial statements) mainly due to different assumptions being used and different market conditions at the different valuation dates. The assumptions used for funding purposes are agreed between the HPS Trustee and the Company and allow for an appropriate amount of prudence, with the discount rate being based on the actual assets of the HPS. While for accounting purposes the assumptions are determined on a best estimate basis in accordance with IAS 19 Employee Benefits, with the discount rate being based on the yields available on high quality corporate bonds of appropriate currency and term. The Company estimates that at 31 December 2025 the net assets of the HPS were around £50m higher on a funding basis (ie the funding assumption principles adopted for the full actuarial valuation at 31 March 2023) than on an accounting basis.

The Company expects to contribute approximately £6m to the HPS during 2026. This includes the ongoing cost of benefit accrual and contributions towards running the pension scheme.

Risks associated with HPS

The HPS exposes the Company to various risks, with the key risks set out below:

- Investment risk: the scheme invests in a wide range of assets with a view to provide long-term investment returns at particular levels. There is a risk that investment returns are lower than expected which, in isolation, could result in a worsening of the funding position of the scheme.

- Interest rate risk: the discount rate is derived from the yields available on good quality corporate bonds of suitable duration. If these yields decrease, then in isolation, this would increase the value placed on the defined benefit obligation and result in a worsening of the funding position of the scheme.

- Inflation risk: the liabilities of the scheme are linked to future levels of inflation. If future inflation is higher than expected then this would result in the cost of providing the benefits increasing and thereby worsening the funding position of the scheme.

- Longevity risk: if members live longer than expected, then pensions will be paid for a longer time which will increase the value placed on the liabilities and therefore worsen the funding position of the scheme.

- Environmental, Social and Governance (ESG) risk: ESG risk relates to these issues having a detrimental impact on financial returns. The fiduciary manager has policies in place to reduce this risk, although there is a higher risk in older externally held assets.

To manage these risks, the Company and the HPS Trustee carry out regular assessments of these risks. The following actions have been taken:

- The HPS Trustee has entered into two bulk annuity contracts with an insurer in respect of a small number of high individual liability pensioner members (one in 2015 and the second in late 2017) with total value included in the assets at 31 December 2025 of £40.1m (2024: £41.8m).

- The HPS Trustee has entered into a Liability Driven Investment programme. The level of risk that is managed by this is set by various market-related and funding trigger points.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
26
Retirement benefit schemes
(Continued)
- 60 -

Together, these actions have led to the HPS Trustee hedging (interest rate and inflation) a high proportion of the HPS's liabilities. At 31 December 2025 HPS's liabilities measured on the HPS Trustee's long-term funding basis were broadly fully hedged.

The objective of the hedging is to match the value of the assets to the movement in liabilities (on a funding basis) arising from changes in market expectations of future inflation rates and future gilt yields. This is to help protect and reduce volatility in funding valuations which are used to determine the cash contribution requirements to the scheme. Since the accounting disclosures use the yields available on corporate bonds to determine the accounting liabilities, the hedging may not have the same impact against changes as they do on a funding valuation. Credit spreads (the difference between the yields available on long-dated corporate bonds and long-dated government bonds) remained broadly the same during the year meaning that the hedge had a broadly similar impact on the funding position of the scheme and the accounting disclosures at the year-end.

To illustrate how sensitive the value of the defined benefit obligation is to different market conditions, the below table shows what the resulting defined benefit obligation would be if the assumptions were changed as shown (assuming all other assumptions remain constant):

Change in assumptions compared with 31 December 2025 actuarial assumptions | £m
Base defined benefit obligation | 994.5
0.5% pa decrease in discount rate | 1,059.9
0.5% pa increase in salary inflation | 995.2
0.5% pa increase in inflation (and related assumptions, eg, salary and pension increases) | 1,026.4
1 year increase in life expectancy | 1,024.4

Assets and liabilities

Under IAS I9, plan assets must be valued at fair value at the balance sheet date. The plan assets are made up of quoted and unquoted investments, and asset valuations have been sourced from the scheme's investment managers and custodians, based on their pricing sources and methodologies. Unquoted investments require more judgement because their values are not directly observable. The assumptions used in valuing unquoted investments are affected by current market conditions which could result in changes in fair value after the measurement date.

For the main asset categories:

- Equities listed on recognised stock exchanges are valued at closing bid prices.

- Bonds are measured using a combination of broker quotes and pricing models making assumptions for credit and market risks and market yield curves.

- Properties are valued on the basis of an open market value or are valued using models based on discounted cash flow techniques.

- Assets in investment funds are valued at fair value which is typically the Net Asset Value provided by the investment manager.

- Certain unlisted investments are valued using a model-based valuation such as discounted cash flow.

- The value of bulk annuity contracts were assessed by discounting the projected cash flows payable under the contracts (projected by an actuary, consistent with the terms of the contract) and is equal to the corresponding liability calculated by reference to the IAS19 assumptions.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
26
Retirement benefit schemes
(Continued)
- 61 -

The assets and liabilities of the HPS (excluding additional voluntary contributions) at 31 December are:

Quoted
Unquoted*
Total
Quoted
Unquoted*
Total
2025
2025
2025
2024
2024
2024
£m
£m
£m
£m
£m
£m
Scheme assets at fair value
Equities:
- UK
-
1.0
1.0
-
0.7
0.7
- Overseas
-
45.0
45.0
-
44.3
44.3
-
46.0
46.0
-
45.0
45.0
Debt securities
- UK Government
488.9
4.6
493.5
417.9
7.2
425.1
- UK Corporate
-
41.5
41.5
-
36.2
36.2
- Overseas Government
6.9
9.9
16.8
6.9
13.6
20.5
- Overseas Corporate
-
192.6
192.6
-
213.0
213.0
- Emerging markets
-
2.0
2.0
-
2.6
2.6
- Private Debt
-
49.5
49.5
-
79.1
79.1
495.8
300.1
795.9
424.8
351.7
776.5
Property
-
35.4
35.4
-
33.4
33.4
Hedge funds
-
0.3
0.3
-
0.4
0.4
Insurance contracts
-
40.1
40.1
-
41.8
41.8
Cash and cash equivalents
89.8
18.0
107.8
110.3
24.3
134.6
Other
(1.0)
0.1
(0.9)
-
2.7
2.7
88.8
93.9
182.7
110.3
102.6
212.9
Total
584.6
440.0
1,024.6
535.1
499.3
1,034.4
Present value of scheme liabilities
-
-
(994.5)
-
-
(995.1)
Net assets
30.1
39.3

*Some investments are in funds which are in themselves not traded in active markets.

The HPS Trustee invests in Liability Driven Investments (LDls) as part of a risk hedging strategy. The aim of the strategy is to match the value of the assets to the movement in liabilities (on a funding basis) arising from changes in market expectations of future inflation rates and future gilt yields. To achieve this, LDls invest in a variety of instruments including gilts, synthetic gilts (combination of repurchase agreement, reverse repurchase agreements and total return swaps) and cash. In the table above, the LDI at 31 December 2025 (approximately £539.6m) has been mapped as 90.6% Quoted UK Government Bonds, 1.3% Quoted Overseas Government Bonds, 8.3% Quoted Cash and (0.2)% Quoted Other.

These amounts do not include any directly owned financial instruments issued by the Company.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
26
Retirement benefit schemes
(Continued)
- 62 -

Within the Private Debt allocation at 31 December 2025, approximately £38.0m relates to adjusted lagged valuations. In arriving at this figure, allowance has been made for broad market movements and distributions between 30 September 2025 (the most recent valuation of these assets) and 31 December 2025.

In accordance with the HPS Trustee's focus on financially material considerations, it is acknowledged that Environment, Social and Governance (ESG) factors can impact security prices. The HPS Trustee has discussed their views on ESG factors, and considered the Company's perspective, and developed responsible investment beliefs. These can be found in the HPS's Statement of Investment Principles (which can be found at https://www.horizonpensionscheme.com/library).

IFRIC 14

The Company has considered the impact of IFRIC14 IAS19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction on the HPS (in relation to either recognising a surplus or allowing for the impact of any funding commitments made) and has concluded, based on the interpretation of the rules for the HPS, that IFRIC 14 would not limit the surplus or increase the deficit shown at the balance sheet date because the Company has an unconditional right to a refund assuming the gradual settlement of the scheme liabilities over time until all members have left the scheme.

The following tables show a reconciliation from the opening balances to the closing balances for the HPS.

Defined benefit obligations
Fair value of plan assets
Net defined benefit (liability)/asset
2025
2024
2025
2024
2025
2024
£m
£m
£m
£m
£m
£m
At 1 January
(995.1)
(1,125.0)
1,034.4
1,154.4
39.3
29.4
Recognised in the income statement:
Current service cost
(0.9)
(1.3)
-
-
(0.9)
(1.3)
Administration costs
(4.7)
(5.5)
-
-
(4.7)
(5.5)
Termination benefits
(0.2)
(0.1)
-
-
(0.2)
(0.1)
Interest cost/(income)
(53.5)
(50.2)
55.7
52.3
2.2
2.1
Sub-total
(59.3)
(57.1)
55.7
52.3
(3.6)
(4.8)
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
26
Retirement benefit schemes
(Continued)
- 63 -
Defined benefit obligations
Fair value of plan assets
Net defined benefit (liability)/asset
2025
2024
2025
2024
2025
2024
£m
£m
£m
£m
£m
£m
Recognised in other comprehensive income:
Remeasurements loss/(gain):
Actuarial loss/(gain) arising from:
-demographic assumptions
(5.0)
1.9
-
-
(5.0)
1.9
-financial assumptions
18.4
139.7
-
-
18.4
139.7
-experience adjustments
(4.4)
(3.0)
-
-
(4.4)
(3.0)
Return on plan assets excluding interest
-
-
(19.5)
(149.9)
(19.5)
(149.9)
Sub-total
9.0
138.6
(19.5)
(149.9)
(10.5)
(11.3)
Employer contributions
-
-
4.9
26.0
4.9
26.0
Employee contributions
(0.1)
(0.2)
0.1
0.2
-
-
Benefits paid
51.0
48.6
(51.0)
(48.6)
-
-
At 31 December
(994.5)
(995.1)
1,024.6
1,034.4
30.1
39.3

The main reason for the movement in the net defined benefit pension position is a slight improvement in assumed life expectancy and actual inflation being slightly higher than assumed over the year. The change in market conditions (which impacted both the assets and liabilities over the year), broadly cancelled each other out and did not have a material impact on the net position.

The defined benefit obligation comprises £994.5m (2024: £995.1m) that is wholly or partly funded.

Of the total pension cost of £3.6m (2024: £4.8m); £5.8m (2024: £6.9m) was included in cost of sales and administrative expenses, and the balance of £2.2m net interest income (2024: £2.1m) was included in finance income.

No events occurred in the HPS requiring the income statement to be remeasured during the year.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
26
Retirement benefit schemes
(Continued)
- 64 -
Information about the defined benefit obligation for HPS
Proportion of overall liability %
Duration
(years)
Proportion of overall liability %
Duration
(years)
2025
2025
2024
2024
Active members
5.0
14.8
4.8
15.5
Deferred members
54.2
15.8
53.5
16.5
Pensioners
40.8
9.6
41.7
9.9
Total
100.0
13.2
100.0
13.7

Duration is a weighted average of when benefits are expected to be paid from a pension scheme. It is sensitive to the interest rate used to calculate it. The increase in yields has acted to reduce the duration of the HPS (because less weight is placed on the pension cash flows stretching far out into the future).

HPS
2025
2024
Main assumptions:
%
%
Rate of price inflation (RPI/ CPI)
2.90/2.40
3.10/2.55
Rate of salary increase
2.90
3.10
Rate of increase of pensions in payment*:
- RPI inflation capped at 5% per annum
2.80
2.95
- RPI inflation capped at 2.5% per annum
1.95
2.00
- CPI inflation capped at 5% per annum
2.40
2.55
Discount rate
5.55
5.50
Expected take up maximum available tax free
cash
85.0
85.0

The average future life expectancy from age 65 (in years) for mortality tables used to determine scheme liabilities at 31 December 2025 and 31 December 2024 are as follows:

Member currently aged 65 (current life expectancy)
Male
Female
2025
2024
2025
2024
HPS**
22.2
21.9
24.0
24.0
Member currently aged 45 (life expectancy at 65)
Male
Female
2025
2024
2025
2024
HPS**
22.8
22.6
25.3
25.3

* There are other levels of pension increases which apply to particular periods of membership.

** The assumptions used for the HPS are tailored for each member. The assumptions adopted make allowance for an increase in the longevity in the future (CMI 2024 model) with a long-term rate of improvement of 1.25% p.a., an 'A' parameter of 0.25% for both males and females and a non-core adjustment to strip out ‘overlay’ (to avoid double counting adjustment for excess deaths from Covid-19 which are already factored into the base tables). The rate for members currently aged 65 is derived from the pensioner membership and the rate for members reaching age 65 in 20 years' time is derived from non-pensioner membership.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 65 -
27
Employees

The average monthly number of employees (including directors) during the year w as:

2025
2024
Number
Number
Operations
9,947
10,385
Sales and administration
403
372
Total
10,350
10,757

Their aggregate remuneration comprised:

2025
2024
£m
£m
Wages and salaries
463.4
458.6
Social security costs
57.7
48.5
Pension costs
24.5
24.2
Share based payments
0.5
0.6
546.1
531.9

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

28
Directors' remuneration
2025
2024
£m
£m
Remuneration for qualifying services
1.0
0.9
Company pension contributions to defined contribution schemes
-
0.1
1.0
1.0

Three Directors are paid by the Company (2024: five). For qualifying services provided by these Directors on the Company's affairs, Directors’ remuneration has been allocated to the Company during the period of their directorship. The other Directors have not provided qualifying services to the Company and are paid by the other Companies within the Capita Group. The Company has estimated that allocation of the qualifying services that these Group based Directors provided to the Company is inconsequential. The Directors of the Company were also reimbursed for the expenses incurred by them whilst performing business responsibilities.

The number of D irectors for whom retirement benefits are accruing under defined contribution schemes amounted to three (2024: five).

The number of D irectors who exercised share options during the year was four (2024: three).

The number of D irectors who are entitled to receive shares under long term incentive schemes during the year was five (2024: three).

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
28
Directors' remuneration
(Continued)
- 66 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2025
2024
£m
£m
Remuneration for qualifying services
0.5
0.4
0.5
0.4

In addition to the above, the Directors of the Company were reimbursed for the expenses incurred by them whilst performing business responsibilities.

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 67 -
29
Related party disclosures
The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:
Nature of Transaction
Year
Enterprises over which Company exercises significant influence
£m
Purchase of goods/services
Entrust Support Services Limited
2025
4.8
2024
6.2
Total
2025
4.8
2024
6.2
Sale of goods/services
Entrust Support Services Limited
2025
5.2
2024
6.6
Fera Science Limited*
2025
-
2024
0.1
Total
2025
5.2
2024
6.7
* No longer a related party with effect from 17 January 2024, the date of disposal of the Company's investment in Fera Science Limited.
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
29
Related party disclosures
(Continued)
- 68 -
Nature of Transaction
Year
Enterprises over which Company exercises significant influence
£m
Closing balance of related parties
Trade receivables
Entrust Support Services Limited
2025
3.7
2024
2.7
Total
2025
3.7
2024
2.7
CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 69 -
30
Contingent liabilities

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

At 31 December 2025, the Company has provided through the normal course of its business, performance bonds and bank guarantees of £10.5m (2024: £12.4m).

At 31 December 2025, the Group's revolving credit facility (RCF) commitment was £250.0m (31 December 2024: £250.0m). The RCF expires on 31 December 2027 and was not drawn upon at 31 December 2025 (31 December 2024: undrawn).

At 31 December 2025, the total exposure under guarantees provided in connection with US private placement notes, undertaken for the benefit of Capita plc and other Group companies was £266.4m (2024: £269.3m).

The Company also forms part of a cross-guarantee in respect of the overdrafts of its fellow group companies under a notional cash-pool bank arrangement.

The Company is a party to legal actions and claims which arise in the normal course of business. The Company throughout the year needs to apply judgement in determining the merit of litigation against it and the chances of a claim being successfully made. It needs to determine the likelihood of an outflow of economic benefits occurring and whether there is a need to disclose a contingent liability or whether a provision might be required due to the probability assessment.

At any time, there are a number of claims or notifications that need to be assessed across the Company. The disparate nature of the Company heightens the risk that not all potential claims are known at any point in time.

31
Capital commitments

At 31 December 2025, the Company had amounts contracted for but not provided in the financial statements for the acquisition of property, plant and equipment amounting to £0.2m, relating to building improvement on a leased property (2024: £1.3 m).

32
Controlling party

The Company's immediate parent company is Capita Holdings Limited, a company incorporated in England and Wales.

The Company's ultimate parent company is Capita plc, a company incorporated in England and Wales. The annual report and consolidated financial statements of Capita plc are available from its registered office at First Floor, 2 Kingdom Street, Paddington, London, England, W2 6BD and on its website www.capita.com/investors

CAPITA BUSINESS SERVICES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 70 -
33
Post balance sheet date events

In November 2025, Ofgem, in line with the usual annual price control process, confirmed they were consulting on a proposal to disallow c.£31m of costs incurred by the Smart Data Communications Company (Smart DCC) for the regulatory year 2024/2025. Since November, Smart DCC has engaged constructively with Ofgem to seek a reduction to the level of disallowed cost in the final price determination. On 11 March 2026, Ofgem has concluded that it will disallow c.£11m cost incurred by Smart DCC for the regulatory year 2024/2025 which is a reduction of c.£20m from the proposed amount. These financial statements reflect the final price determination for regulatory year 2024/2025 and an estimate of what the price determination will be for regulatory year 2025/2026.

On 1 February 2026, the Company acquired a portion of the business and assets from another Group subsidiary, Capita Customer Management Limited. Consideration of £0.1m equal to their net book value to be settled through intercompany loans.

On 26 March 2026, the Group agreed to sell its private sector contact centre business to Inspirit Capital for £1 with £6.5m cash retained in the business upon completion for normal working capital purposes. In addition, there is potential contingent consideration payable to the Group up to a cap of £61.5m, expected to be paid in 2027 and 2028; with £50.0m based on future financial performance of the disposed business and £11.5m based on cash availability. The sale is expected to be completed in June 2026, subject to regulatory approvals.

The Company’s direct investment in Capita Business Support Services Ireland Limited forms part of the sale perimeter, and the Company will receive potential contingent consideration payable to the Company of up to £7.5m expected to be paid in 2027 and 2028 which is based on future financial performance of the disposed investment.

In February 2026, Capita plc entered into a £75m additional committed financing facility, with a subset of the existing lenders and terms consistent with the existing RCF.

In June 2026, Capita plc refinanced its revolving credit facility, securing a £325m facility with a maturity date of June 2029, including two one-year extension options. Upon entering the revolving credit facility, the subsequent £75m additional committed financing facility was cancelled.

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