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

Western Mortgage Services Limited ('the Company') is a wholly owned subsidiary (indirectly held) of Capita plc. Capita plc, along with all its subsidiaries' is hereafter referred as 'the Group'. The Company operates within the Regulated Services and Contact Centre operating segments of the Group.

The principal activity of the Company is the provision of debt management and recovery services, software and consultancy services to clients within the regulated financial services sector, and outsourced business support services to clients.

The sale of Company's mortgage servicing business was completed on 13 October 2025. The business was classified as held-for-sale at 31 December 2024 and the resulting loss on disposal has been recognised in the income statement for the current year (refer to note 6).

During the year, the Company transferred trade and assets related to the motor finance business to Capita Customer Management Limited (refer to note 19).

As shown in the Company's income statement on page 14, revenue has increased from £35,243k in 2024 to £41,502k in 2025 and the Company's operating loss has improved from £14,923k in 2024 to an operating profit of £5,492k in 2025, mainly on account of favourable impact of various contract exits and impairment of intangible assets recognised in the prior year.

The balance sheet on pages 15 to 16 of the financial statements shows the financial position at the year end. Net assets have increased from £70,795k in 2024 to £75,724k in 2025 on account of the profit earned during the year.

Details of the amounts owed by/to its parent company and fellow subsidiary companies are shown in notes 10 and 12 to the financial statements.

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

The Directors are ultimately responsible for the risk management regime, as well as ensuring that the governance and culture of the Company starts at the Board. This includes the segregation of duties in the Company and the prevention of conflicts of interest. It is satisfied that the risk systems are adequate for the Company's profile and strategy.

Systems and procedures are in place to identify, assess and mitigate major business risks that could impact the Company. Monitoring exposure to risk and uncertainty is an integral part of the Company’s structured management processes and is focused through a Risk and Compliance Committee. The Risk and Compliance Committee meets at least two times per year and receives formal reports from a range of functions within the business.

The Company is not risk averse but seeks to actively manage material risk to the business. Operational risk is the main category of risk faced by the Company. Whilst accepting that data security and fraud risks are inherent within business operations, the Company has a zero tolerance for fraudulent or corrupt behaviour, with controls designed accordingly.

Whilst risk appetite is strategic and linked to business objectives, risk tolerance is operational and expressed in such a way that it can be linked to the same risk measures implemented by operational teams throughout the Company. The Company's Risk and Compliance team, who are independent of the business, provide ongoing challenge for the risk management process, as well as ensuring consistency with other parts of the Group.

The Company is not reliant on any single external commercial relationship and therefore we do not believe the exposure to concentration risk to be material.

The Company has developed a liquidity management framework to formalise the monitoring and control processes in place to ensure it has sufficient liquid resources to meet its liabilities as they come due. This risk is therefore considered to be minimal.

The assets include bank deposits held with Barclays Bank plc as part of a cash pooling arrangement with other subsidiaries of the Group. The credit and liquidity risk associated with these deposits are reviewed on an ongoing basis and are considered by management to be low.

Other risks

The Company is exposed to other risks that, should they materialise, could have a detrimental impact on financial performance, reputation or operational resilience.

• People attraction and retention: Attract, develop, engage and retain the right talent.

• Financial stability: Maintain financial resilience and achieve financial targets.

• ESG: Comply with regulatory and contractual requirements to drive a purpose driven organization with the right focus on governance.

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

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 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 Capita plc’s 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.

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

• 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.

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

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.

Section 172 statement (continued)

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 and suppliers

Topics of engagement

• Social value

• Workplace inequalities

• Diversity, equity & inclusion

• Data privacy and security

• AI and business ethics

• Climate change

• Community engagement

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

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

The results for the year are set out on page 14.

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

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

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

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 company's continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance

Employees

Details of number of employees and related costs can be found in note 16 to the financial statements.

KPMG LLP has indicated its willingness to continue in office and will be deemed to be reappointed as under section 487(2) of the Companies Act 2006.

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 its 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.

The Directors are responsible for preparing the Strategic report, the Directors’ report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

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

•     select suitable accounting policies and then apply them consistently;

•     make judgements and estimates that are reasonable and prudent;

•     state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are 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.

So far as each person who was a Director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the Company's auditor is unaware. Having made enquiries of fellow directors and the Company's auditor, 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.

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

We have audited the financial statements of Western Mortgage Services Limited (“the Company”) for the year ended 31st December 2025 which comprise the Income Statement, Balance Sheet, 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 Reduced Disclosure Framework; 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. 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 from the date of approval of the financial statements to 30 June 2027 (“the going concern period”).

In our evaluation of the directors’ conclusions, we considered the inherent risks to the Company’s business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period.

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

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 Meeting minutes.

• Considering the remuneration incentive schemes and performance targets for management and directors including the short-term incentive plan and long-term incentive plan 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 targets, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because of straightforward nature of revenue recognition, which reflects the agreed upon contract terms with minimal estimation or subjective judgement.

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.

• Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.

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 and through discussion with the directors and other management (as required by auditing standards), 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 noncompliance throughout the audit.

As the Company is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements. 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.

Fraud and breaches of laws and regulations – ability to detect (continued)

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: data protection laws, anti-bribery, employment law, and certain aspects of company legislation recognising the nature of the Company’s activities. 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 these 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 report have been prepared in accordance with the Companies Act 2006.

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.

As explained more fully in their statement set out on page 9, 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.

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.

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

The notes and information on pages 18 to 39 form an integral part of these financial statements.

The notes and information on pages 18 to 39 form an integral part of these financial statements.

The balance classified as share capital is the nominal proceeds on issue of the Company's equity share capital, comprising 1 ordinary shares of £1.00 each. On 16 December 2025, the Company cancelled 37,549,999 ordinary shares of £1 each. The cancellation was effected without any repayment of capital, with the nominal value of the cancelled shares credited to retained earnings.

Net profits accumulated in the Company after dividends are paid.

The notes and information on pages 18 to 39 form an integral part of these financial statements.

Western Mortgage Services Limited is a company incorporated and domiciled in the United Kingdom.

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

In determining the appropriate basis of preparation for the financial statements for the year ended 31 December 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 entities in the group headed by Capita plc ('the Group')

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

• provision of certain services, such as administrative support 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 £24,923k was held 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 £51,746k 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; and

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

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.

Ultimate parent company – Capita plctrue

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.

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.

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

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

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

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

•     A cash flow statement and related notes;

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

•     Disclosures in respect of transactions with wholly owned subsidiaries;

•     Disclosures in respect of capital management;

•     The effects of new but not yet effective IFRSs;

•     Certain disclosures as required by IFRS 15 ;

•     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 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.

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

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

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

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

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

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

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

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

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

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

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

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

Once the total transaction price is determined, the Company allocates this to the identified performance obligations in proportion to their relative 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.

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. 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.

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 separate contract;

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; or

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

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.

The facts and circumstances of any contract modification are considered individually because the types of modifications will vary contract by contract and may result in different accounting outcomes. 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. In these cases management need 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.

When 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.

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

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 transfers control of the goods and service 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 reporting 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 vs 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 at 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.

When software upgrades are sold as part of the software licence agreement (i.e. software upgrades are promised to the customer), the Company applies judgement to assess whether the software upgrade is distinct from the licence (i.e. 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 balance sheet date, the Company recognises a deferred income contract liability for this difference. Where payments received are less than the revenue recognised up to the balance sheet date, the Company recognises an accrued contract income asset for this difference

At each balance sheet date, the Company assesses whether there is any indication that accrued contract income assets may be impaired by considering whether or not any revenue reversal could occur. Where an indicator of impairment exists, the Company makes a formal estimate of the asset’s recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

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.

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 (e.g., 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 (i.e., 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.

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

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

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

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

At each balance sheet 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.

Gains or losses arising from disposal of assets or liabilities are measured as the difference between the net disposal proceeds and the carrying amount of the asset or liabilities and are recognised in the income statement. Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and the sale is either immediate or considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell.

Classification

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

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

•     those to be measured at amortised cost.

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

Financial instruments (continued)

Recognition and derecognition

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

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

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

Impairment

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

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.

The Company monitors the level of trade receivables on a monthly basis, continually assessing the risk of default by any counterparty. Each customer has an external credit score which determines the level of credit provided.

Derecognition: A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised (i.e. 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 or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risk and rewards of the asset; or, (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Trade and other payables

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

Cash and cash equivalents

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

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

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

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

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available 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.

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

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

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

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

The Company 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.

Where a business is transferred from one legal entity to another legal entity within the Capita Group under a Business Transfer Agreement ('BTA'), this is treated as a business combination under common control, and would therefore fall outside of the scope of IFRS 3. As such, an accounting policy choice has been made for how common control transactions are dealt with across the Group, as follows:

•     Where a BTA is undertaken at net book value (with consideration paid equal to the net book value of the assets and liabilities transferred on the BTA date), the relevant assets and liabilities of the transferring business are recognised in the transferee at their previous carrying values as in the transferor’s standalone entity accounts;

•     Where the consideration paid is greater than the net book value of the assets and liabilities transferred, this excess is recognised as a gain on disposal for the transferor, and by the recognition of entity level goodwill in the transferee, which would be linked to the acquired business.

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.

Management has assessed the areas requiring judgements and estimates and concluded that there are no significant judgements or estimation uncertainties that are required to be disclosed in the financial statements.

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

Audit fees are borne by the ultimate parent company, Capita plc. The audit fee for the current period was £22,500 (2024: £22,000). 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.

During the year, the Company completed the sale of its mortgage services business to Topaz Finance Limited on 13 October 2025. The Company received cash consideration of £112k and incurred cost of disposal and migration costs of £1,807k. The carrying value of the Company's net liabilities was £63k and a loss on disposal of £1,632k was recognised in the income statement.

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

In accordance with the stated accounting policy for taxation in note 1.10 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 deferred tax assets can be fully recognised (2024: No deferred tax asset was recognised in respect of gross fixed asset timing differences of £9k).

The contract asset was derecognised during the year due to the termination of a contract.

Amounts due from Group companies are repayable on demand. These are not chargeable to interest except for the amount due from Capita plc, on which interest is charged at 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, £51,034k 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.

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

The Company is required to perform repairs on leased properties prior to the properties being vacated at the end of their lease term. Dilapidations for such costs are made where legal obligation is identified and the liability can be reasonably quantified.

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.

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.

The business exit provision relates to the cost of exiting businesses through disposal and the costs of separating the businesses being disposed.

Other provisions relate to potential exposures arising from the nature of certain services provided by the Company. These provisions are expected to unwind over periods of up to one year.

The deferred income balances solely relate to revenue from contracts with customers. The decrease in deferred income during the year was due to the termination of a contract.

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

Their aggregate remuneration comprised:

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

One Director is paid by the Company (2024 - one). For qualifying services provided by this Director on the Company's affairs, Directors’ remuneration has been allocated to the Company during the period of his directorship. The Director of the Company was also reimbursed for the expenses incurred by him whilst performing business responsibilities.

Other Directors are paid by other companies within the Capita Group. The Company has not paid any fees or other remuneration to the Group based Directors related to the directorship role they provided to the Company as a part of their management role in Capita experience division. The Company has estimated that allocation of the qualifying services that these Group based Directors provided to the Company is inconsequential.

The number of Directors for whom retirement benefits are accruing under defined contribution schemes amounted to one (2024 - one).

The number of Directors who exercised share options during the year were two (2024 - two).

The number of Directors who are entitled to receive shares under long term incentive schemes during the year were two (2024 - two).

The Company's immediate parent company is Capita Life & Pensions Regulated Services 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 accounts of Capita plc are available from the registered office at First Floor, 2 Kingdom Street, Paddington, London, England, W2 6BD.

As a part of a legal entity reorganisation programme, the business and assets related to the motor finance business were transferred from the Company to other fellow company within the Group by way of Business Transfer Agreements (“BTAs”). As both transferor and transferee entities for these BTAs were ultimately controlled by Capita plc, these are deemed to be business combinations under common control, with an accounting policy choice made as detailed in note 1.13. The following table shows the gross assets and gross liabilities transferred as part of each BTA, consideration received/(paid) by the Company:

*Consideration was settled via intercompany loan.

On 31 May 2026, it was agreed to transfer a portion of business and assets relating to customer contracts and cost centres from the Company to Capita Customer Management Limited, another Group subsidiary. As part of this transfer, the Company transferred gross assets of £915k and gross liabilities of £416k at their book values for a net consideration of £499k to be settled through intercompany loans.