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

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

The principal activity of the Company was the provision of support services to companies operating in the insurance market, including legal expenses, motor, household, employer’s liability, public liability and property. During the year, the Company’s last remaining contract came to an end. The Company continues to sponsor the IWCSSS (CIS Section) pension scheme.

Review of business

As shown in Company's income statement on page 3, revenue has decreased from £1,170k in 2024 to £375k in 2025 due to the ending of Company's major contract during 2025. The operating loss reduced from £449k in 2024 to £178k in 2025 primarily due to lower payroll costs following a reduction in headcount associated with the cessation of the Company's last remaining contract, partially offset by losses recognised on exit.

The balance sheet on pages 5 to 6 of the financial statements shows the financial position at the year end. Net assets have increased from £24,107k in 2024 to £24,360k in 2025 due to profit generated during the year.

Details of the amounts owed by/to its parent company and fellow subsidiary companies are shown in notes 6 and 9 to the financial statements.

The results for the year are set out on page 3.

No interim or final dividend was paid or proposed during the year (2024: £80,000k).

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).

The directors are responsible for preparing 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 they have elected to prepare the financial statements in accordance with UK 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 Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and 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 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.

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 provisions remains in force as at the date of approving the directors' report.

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

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

The notes and information on pages 8 to 29 form an integral part of these financial statements.

The notes and information on pages 8 to 29 form an integral part of these financial statements.

The notes and information on pages 8 to 29 form an integral part of these financial statements.

For the financial year ended 31 December 2025, the company was entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies.

The Directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476 of Companies Act 2006.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

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 each.

Net profits accumulated in the Company after dividends are paid.

The notes and information on pages 8 to 29 form an integral part of these financial statements.

Capita Insurance 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 31 December 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.

Inter-dependencies with other entities 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 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 £50k was held at 31 July 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; and

• recovery of receivables of £23,105k from fellow Group companies as of 31 July 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.

Despite the Company being in a net current liability, the ultimate parent company, Capita plc, has stated that it will provide continuing financial support as necessary and to the extent it is able to do so during the going concern assessment period.

The Company’s financial projections are dependent on the Group providing additional financial support over the going concern period. Capita plc has indicated its intention to provide financial support to the Company in order to meet its liabilities as and when they fall due in the going concern assessment period.

As with any company placing reliance on other group entities for financial support, the Directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.

Given the reliance the Company has on the Group, the Directors have considered the financial position of the ultimate parent company as disclosed in its most recent condensed consolidated financial statements, being for the six months ended 30 June 2026.

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 condensed consolidated financial statements at 30 June 2026. These condensed consolidated financial statements were approved by the Board on 3 August 2026 and are available on the Group’s website (www.capita.com/investors). Below is a summary of the position at 3 August 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 condensed consolidated financial statements. The Board has considered the period from the date of approval of these condensed consolidated financial statements to 31 December 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 and subsequently updated for new funding arrangements, the disposal of the private sector contact centre business and trading conditions.

Under the base case scenario, the disposal of the private sector contact centre business and the material overhead reduction it enables as further complexity is removed from the Group, facilitates growth in profit and cash flow over the medium term. The phasing of the overhead reduction in 2026 and 2027, the consideration from the disposal being contingent and receivable from January 2027 onwards, coupled with the operational issues with the Civil Service Pension Scheme contract and the impact this has had on the wider Pension Solutions business, post actions being taken across the wider Group to offset some of the impact (primarily the acceleration of the aforementioned overhead reduction into 2026), has reduced the forecast revenue, profit and cash flow in 2026. When combined with available committed facilities, the Group remains able to manage scheduled debt repayments (with no need for future refinancing of these repayments over the going concern period).

The most material sensitivities to the base case are the risk of not delivering the planned revenue growth, the overhead reduction being delayed or not delivered, progress to resolve the operational issues with the Civil Service Pension Scheme being slower than planned, and the delay or non-delivery of the aforementioned committed actions.

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 (including the disposal of the private sector contact centre disposal which completed on 31 July 2026).

The base case financial forecasts demonstrate liquidity headroom and compliance with all debt covenant measures throughout the going concern period to 31 December 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;

• targeted cost savings delayed or not delivered;

• progress to resolve the operational issues with the Civil Service Pension Scheme contract being slower than planned;

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

• increased interest rates;

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

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

Basis of preparation (continued)

The likelihood of simultaneous crystallisation of the above risks at a sufficiently material magnitude is considered by the Board to be low. Nevertheless, there may be scenarios where a combination of the above risks crystallise and the Group would need to take action to ensure there is sufficient headroom when assessing the Group’s future compliance with its debt covenants. 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, further 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, before taking account of any covenant waiver or amendment, demonstrate sufficient liquidity headroom throughout the going concern period to December 2027, but potentially insufficient headroom when assessing compliance with debt covenant measures in the short term. This was not the case when assessing the severe but plausible downside scenario for the purposes of the 31 December 2025 consolidated financial statements due to the combination of events in 2026 detailed further above. The Group’s financial forecasts, in a severe but plausible downside scenario demonstrate sufficient headroom when assessing compliance with debt covenant measures beyond the short term.

The Group maintains regular dialogue with its lenders, and the Board has confidence that any temporary waiver or amendment could be obtained, if required.

Material uncertainty related to the Group

The Board recognises that any debt covenant waiver or amendment would require lender approval and is therefore outside the direct control of the Group. Accordingly, this gives rise to a material uncertainty, as defined by accounting standards, relating to events and circumstances which may cast significant doubt about the Group’s ability to continue as a going concern and to realise assets and discharge its liabilities in the normal course of business. These condensed consolidated financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

Adoption of going concern basis in the Group financial statements

Notwithstanding the material uncertainty described above, the Board has concluded that it remains appropriate to adopt the going concern basis in preparing these condensed consolidated financial statements. In reaching this conclusion, the Board has considered the Group’s financial forecasts and the mitigating actions available to the Group should the severe but plausible downside scenario materialise, including the potential for a debt covenant waiver or amendment. Accordingly, 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 31 December 2027.

Conclusion

Although the Company has a reliance on the Group as detailed above, 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 31 December 2027. Consequently, the financial statements have been prepared on the going concern basis.

However, as the Group’s condensed consolidated financial statements have identified a material uncertainty giving rise to significant doubt over the Group’s ability to continue as a going concern, given the Company’s reliance on the Group, as set out above, this gives rise to a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern and, therefore, that the Company may be unable to continue in operation and discharge its liabilities in the normal course of business. The financial statements do not include any adjustments which would be required if the going concern basis of preparation were to be deemed inappropriate.

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 ; and

•     Disclosures in respect of the compensation of key management personnel.

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 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

Revenue is earned within the United Kingdom.

The Company operates a number of businesses and revenue recognition is 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.  Most revenue is recognised when the performance obligation in the contract has been performed. Some revenue is accrued and depends upon future events such as the agreement of contractual KPIs achieved. This revenue is inherently subjective until performance and the associated revenue is agreed at which point any adjustment to the amount accrued is reflected.

Where payments made are greater than the revenue recognised at the period end date, a deferred income liability is recognised for the difference. Where revenue is greater than payments received, an accrued income asset is recognised for the difference.

The Company may enter 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. In those circumstances, 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 each performance obligation, the Company determines if revenue will be recognised over time or at a point in time. Where the Company recognises revenue over time for long term contracts, this is in general due to the Company performing and the customer simultaneously receiving and consuming the benefits provided over the life of 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, for long term service contracts where the series guidance is applied (see below for further details), the Company often uses a method of time elapsed which requires minimal estimation.

If performance obligations in a contract do not meet the over time criteria, the Company recognises revenue at a point in time (see below for further details).

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.

Long term contractual - greater than 2 years

The nature of contracts or performance obligations categorised within this revenue type comprises long term outsourced service arrangements in private sectors.

The Company considers that the services provided meet the definition of a series of distinct goods and services because they are (i) substantially the same and (ii) have the same pattern of transfer (as the series constitutes services provided in distinct time increments (e.g., daily, monthly, quarterly or annual services)) and therefore treats the series as one performance obligation. Even if the underlying activities performed by the Company to satisfy a promise vary significantly throughout the day and from day to day, that fact, by itself, does not mean the distinct goods or services are not substantially the same.

For long service contracts with customers in this category, the Company recognises revenue using the output method because it best reflects the nature in which the Company is transferring control of the goods or services to the customer.

Transactional (Point in time) contracts

The Company delivers both services that are transactional services and services that are short term services for which charges are agreed annually and for which revenue is recognised at the point in time. The nature of contracts or performance obligations categorised within this revenue type includes fees received in relation to delivery of professional services.

Contract modifications

The Company’s contracts are amended when there are new or changes to the existing enforceable rights and obligations. This is very limited in relation to this business. The facts and circumstances of any contract modification are considered individually since the types of modifications will vary contract by contract and may result in different accounting outcomes.

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 services being provided. The Company often agrees payment schedules at the inception of long term contracts under which it receives payments throughout the term of the contracts. These payment schedules may include performance-based payments or progress payments as well as 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.

Where payments made are greater than the revenue recognised at the period end date, the Company recognises a deferred income contract liability for this difference. Where payments made are less than the revenue recognised at the period end date, the Company recognises an accrued income contract asset for this difference.

At each reporting date, the Company assesses whether there is any indication that accrued income assets may be impaired by considering whether the revenue remains highly probable and that no revenue reversal will 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.

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.

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.

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.

Taxation (continued)

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.

The Company participates in a defined contribution pension scheme where contributions are charged to the income statement in the year in which they are due. This scheme is funded and contributions are paid to separately administered funds. The assets of the scheme are held separately from the Company. The Company remits monthly pension contributions to Capita Business Services Ltd, a fellow subsidiary undertaking, which pays the Group liability centrally. Any unpaid contributions at the year-end have been accrued in the accounts of Capita Business Services Ltd.

The Company also has employees who were members of the Group’s main defined benefit pension scheme ('HPS').

When the Company ceased to have any active members in the HPS, this triggered a cessation event which meant a Section 75 debt (which is a statutory debt due from a participating employer to the trustees of a multi-employer defined benefit pension scheme which is in deficit) would have become due. However, the Trustee of the HPS agreed that the pension liabilities attributable to the Company would be transferred to Capita Business Services Ltd (the Principal Employer of the HPS), which removed the Section 75 debt due from the Company. This Flexible Apportionment Arrangement was agreed in early 2018. As a result of the arrangement, the Company was no longer a formal participating employer in the HPS. In return for the Trustee granting this Flexible Apportionment Arrangement, the Company had provided a guarantee to the HPS that put the Company into the same position as if it had remained a participating employer. However, in March 2025, the Trustee of the HPS released the Company from all of its obligations and liabilities under or pursuant to this guarantee. Therefore, the Company has no further obligation to the HPS.

As there is no contractual agreement or stated Group policy for charging the net defined benefit cost of the HPS to any participating entities, the net defined benefit cost of the HPS is recognised fully by the Principal Employer.

A full actuarial valuation of the HPS is carried out every three years by an independent qualified actuary for the Trustee of the HPS, with the last full valuation carried out as at 31 March 2023. The next full actuarial valuation is being carried out with an effective date of 31 March 2026.

In addition, the Company has a ring-fenced section in an industry-wide pension scheme which requires contributions to be made to a separate trustee-administered fund. The costs of providing benefits under this scheme is determined 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 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 recognized immediately in other comprehensive income and reflected immediately in retained earnings 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 given to events which require the net interest expense/income on the net defined benefit asset/liability to be re-measured over the course of the period.

Pensions (continued)

Current and past service costs are charged to operating profit while the net interest cost is included within net finance costs.

The balance sheet position of this defined benefit pension scheme comprises the fair value of plan assets out of which the obligations are to be settled directly less the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds). Fair value is based on market price information and in the case of quoted securities is the published bid price. The Company will consider the impact of IFRIC 14 (in relation to either recognising a surplus or allowing for the impact of any funding commitments made) and will make an assessment, having regard to the rules of the pension schemes, on whether IFRIC 14 limits the surplus or increases the deficit shown at the balance sheet date.

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.

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 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:

• 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, price inflation and the discount rate used to calculate the net present value of the future pension payments. The Company uses estimates for all of 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: 5.50% 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 by 0.05% pa to an average of 0.50% pa.

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

The reconciliation between tax charge and the accounting profit multiplied by the UK corporation tax rate for the years ended 31 December 2025 and 2024 is as follows:

The Group undertook a review of the funding structure of its key subsidiaries during the second half of the year. Following this review, £22,607k 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 deferred income balances solely relates to revenue from contracts with customers. Movements in the deferred income balances were driven by transactions entered into by the Company within the normal course of business in the year.

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.

The Company participates in both defined benefit and defined contribution pension schemes. The pension charge for the defined benefit and defined contribution pension schemes for the year is £212k (2024: £240k).

The pension charge excludes pension contributions paid by the Company on behalf of employees via a salary sacrifice arrangement.

The Company sponsors one (fully segregated) section of an industry-wide defined benefit pension scheme - the IWCSSS (CIS section) which required contributions to be made to a separate trustee-administered fund. Also the Company has current and former employees who were members of the Group’s main defined benefit pension scheme ('HPS').

The Group’s main defined benefit pension scheme

The HPS is a non-segregated scheme with around 200 different sections in the scheme where each section provides benefits on a particular basis (some based on final salary, some based on career average earnings) to particular groups of employees.

When the Company ceased to have any active members in the HPS, this triggered a cessation event which meant a Section 75 debt (which is a statutory debt due from a participating employer to the trustees of a multi-employer defined benefit pension scheme which is in deficit) would have become due. However, the Trustee of the HPS agreed that the pension liabilities attributable to the Company would be transferred to Capita Business Services Ltd (the Principal Employer of the HPS and a fellow subsidiary undertaking), which removed the Section 75 debt due from the Company. This Flexible Apportionment Arrangement was agreed in early 2018. As a result of the arrangement, the Company was no longer a formal participating employer in the HPS. In return for the Trustee of the HPS granting this Flexible Apportionment Arrangement, the Company had provided a guarantee to the HPS that put the Company into the same position as if it had remained a participating employer. However, in March 2025, the Trustee of the HPS released the Company from all its obligations and liabilities under or pursuant to this guarantee. Therefore, the Company has no further obligation to the HPS.

A full actuarial valuation of the HPS is carried out every three years by an independent qualified actuary for the Trustee of the HPS, with the last full valuation carried out as at 31 March 2023. Amongst the main purposes of the valuation is to agree a contribution plan such that the pension scheme has sufficient assets available to meet future benefit payments, based on assumptions agreed between the Trustee of the HPS and the Principal Employer. 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 Principal Employer and the Trustee of the HPS agreed that no further deficit recovery contributions from the Principal Employer are required other than those already committed* 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.

*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.

Finally, the Principal Employer agreed an average employer contribution rate of 23.6% of pensionable salary towards the expected cost of benefits accruing.

The next full actuarial valuation is being 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 the consolidated financial statements of Capita plc, an independent qualified actuary projected the results of the 31 March 2023 full actuarial valuation to 31 December 2025 taking into consideration the relevant accounting requirements.

The principal assumptions for the accounting valuation as at 31 December 2025 were as follows:

•     rate of increase in RPI/CPI price inflation - 2.90% pa/2.40% pa (2024: 3.10% pa/2.55% pa);

•     rate of salary increase - 2.90% pa (2024: 3.10% pa);

•     rate of increase for pensions in payment (where RPI inflation capped at 5% pa applies) – 2.80% pa (2024: 2.95% pa); and

•     discount rate – 5.55% pa (2024: 5.50% pa).

The HPS assets at fair value as at 31 December 2025 totalled £1,024.6m (2024: £1,034.4m). The actuarially assessed value of HPS as at 31 December 2025 was £994.5m (2024: £995.1m) indicating that the HPS had a net asset of £30.1m (2024: net asset of £39.3m). These figures are quoted gross of deferred tax. The full disclosure is available in the consolidated accounts of Capita plc.

For the purpose of these accounts, the Company’s interest in the HPS is reported on a defined contribution basis recognising a cost equal to its contributions payable during the period. The pension charge for the Company in relation to the HPS for the year was £nil (2024: £nil).

IWCSSS (CIS section)

Responsibility for the governance of the IWCSSS (CIS section) lies with the Industry-Wide Coal Staff Superannuation Scheme Trustees Limited (“IWCSSSTL”) which is independent of the Company. The IWCSSSTL is required by law to act in the interest of the IWCSSS (CIS section)’s beneficiaries in accordance with the rules of the Industry-Wide Coal Staff Superannuation Scheme (“Scheme”) 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 IWCSSSTL is also governed by the rules of the Scheme and relevant legislation.

The assets of the IWCSSS (CIS section) are held in a separate fund (administered by the IWCSSSTL) to meet long-term pension liabilities to beneficiaries. The IWCSSSTL invests the assets in accordance with their Statement of Investment Principles, which is regularly reviewed.

The most recent full actuarial valuation of the IWCSSS (CIS section) which was carried out as at 31 December 2024 showed a funding surplus of £270k. This equates to a funding level of 101.8%. As a result of the full actuarial valuation, no deficit reduction contributions are required after March 2026. However, the Company has agreed to make contributions for the expenses (£60k per annum with effect from March 2026) and other regulatory levies (as and when they fall due) in the running of the IWCSSS (CIS section). The Company is expected to make contributions totaling c. £270k to the IWCSSS (CIS section) during 2026. The next actuarial valuation is due to be carried out as at 31 December 2027.

For the purpose of the consolidated financial statements of Capita plc (and shown here), a qualified actuary projected the results of the 31 December 2024 actuarial valuation to 31 December 2025.

For the purposes of IFRIC14, a net pension asset is deemed to be recoverable because the Company has a right to a future refund in the event the scheme is wound-up and there remains a surplus.

The pension credit for the IWCSSS (CIS section) for the year was £60,000 (2024: £30,000).

Risks associated with the Company’s pension schemes

The HPS and IWCSSS (CIS section) expose the Company to various risks, with the key risks set out below:

Investment risk: If the invested assets under-perform the returns assumed in setting the funding target then additional contributions may be required at subsequent valuation dates for each of these schemes.

Interest rate risk: the discount rate is derived from 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 schemes.

Inflation risk: the obligations of the schemes 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 schemes.

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 obligations and therefore worsen the funding position of the schemes.

To manage these risks, the Company and the trustees carry out regular assessments of these risks. Refer to the full disclosures available in the consolidated financial statements of Capita plc for further information.

All 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 Group-wide executive management role. The Company has estimated that allocation of the qualifying services that these Group based Directors provided to the Company is inconsequential.

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

There have been no significant events that have occurred after the balance sheet date.