Annual Report 2025 (CEPS PLC Annual Report 2025)

CEPSPLC

Partnering for success

Contents

page

Chairman's Statement 3

Strategic Report 8

Directors' Report 11

Corporate Governance 14

Independent Auditor's Report 24

Consolidated Statement

of Comprehensive Income 30

Consolidated and Company

Statements of Financial Position 32

Consolidated and Company

Statements of Cash Flows 34

Consolidated and Company

Statements of Changes in Equity 36

Notes to the Financial Statements 38

Group Information 84

Notice of Meeting 85

Chairman's Statement

I am pleased to present to shareholders the CEPS plc ('CEPS' or 'Company') final accounts for the year ended 31 December 2025, the 20th Annual Report.

Having spent the last few years working towards 'normalising' the companies in the CEPS Group and their presentation in the Annual Report, I am afraid that once again we have managed to make these accounts very difficult to understand!

However, the principal reason for this is, of course, the crystallisation of the major value in the ICA Group ('ICA'), a point to which I will return in greater detail later.

Macro overview As Harold Macmillan said whilst Prime Minister, "Events dear boy, events" referring to the things that throw governments off-course. During the past 15 months, the United Kingdom and the wider world seem to have had their fair share of extraordinary domestic events and seemingly 'cataclysmic' world events that have ensured that all media forms have had plenty of material on which to feast.

This last period has been no different. The planned short 'Special Military Operation' instigated by Vladimir Putin's Russia on Ukraine is now into its fifth year. The resilience of the Ukrainian people has been extraordinary as they come through another harsh winter with compromised infrastructure. They have now been striking back deep into Russia, and the war has been brought to the doorsteps of Russians up to 1,000 kilometres away. Some reports now suggest that Russia may be facing mounting strain, both in sustaining its armed forces and in financing the continuation of the campaign.

Recently we have seen the United States President, having gained office partially based on the promise of no more foreign wars, effecting partial regime change in Venezuela and, more recently, throwing the Middle East into turmoil with the major attack on Iran. On the face of it, this seemed to be not thought through with no plan other than to run the Venezuelan 'play book' again. However, it appears that Venezuela and Iran were supplying China with material amounts of its oil at big discounts to world prices. With Venezuelan oil exports now under the 'control' of the USA and shipments being blockaded in the Middle East, the lack of supply will undoubtedly put pressure on China, once it has utilised its large reserves, which might well be part of the strategy.

The attack by the USA appears to have increased tensions in the ongoing conflict between Israel and certain neighbouring regions. The whole Middle East is in great turmoil now, and the impact of this conflict will start to be felt across Europe on a lagged basis if things do not get resolved quickly.

It was evident to us that the UK economy was gently recovering from the massive errors committed by the Labour Government over the first 18 months of its term. There is no need to waste time here listing the multiple 'U-Turns' that the Government has made reflecting a recognition that its original decisions were wrong. The changes to Employer National Insurance costs have had a severe impact on general commercial life, including on all the CEPS companies.

The management of a separate private company in which I am involved has responded to this increased cost burden by opting not to replace an individual who was leaving anyway, has put up prices by 6% instead of a previously planned 4.5% and reduced pay expectations from 4.5% to around 3.5%. So, in one go, the Labour Government has managed to reduce employment, curtail earnings growth and stoke inflation!

Macro overview continued

Financial review and performance of the CEPS Group

The latest economic indicators for the period up to the start of the Middle East conflict had shown inflation continuing to fall, employment levels rising, and growth in GDP ahead of expectations, all leading to an expectation of further cuts in interest rates over the balance of 2026. Unfortunately, the conflict in the Middle East will have major ramifications and, unless the situation is resolved quickly, will have a negative lagged effect. The rise in oil prices will lead to an increase in inflation and cause further caution amongst British consumers.

However, it is important to put things in context. In the last year, the British public was reported to have saved an estimated £192bn, and since the Covid period in 2020, savings are believed to be close to £500bn. At this time, it is expected that increased petrol costs could amount to some £5bn per year.

It is interesting to note that the futures market price of oil and gas for six months' time is significantly lower than the current elevated levels. This reflects the market expectation that the current turmoil in the Middle East will be resolved and that supply of oil and gas will be restored. It is also evident that the supply of LNG has now been extended well beyond the original estimates and that supply is likely to increase and prices should, consequently, decline.

CEPS revenue increased to £32.84m from £31.56m, gross profits increased to £14.13m from £13.29m whilst underlying operating profits (excluding exceptional items) marginally declined from £2.42m to £2.37m. Underlying earnings per share decreased from 2.94p to 2.00p (see note 14).

As a consequence of the ICA sales process, this has required presentation of the Consolidated Statement of Comprehensive Income as continuing and discontinued and the Consolidated and Company Statements of Financial Position to be split between the respective assets and liabilities.

Aford Awards

The market in which Aford Awards operates has had another tough year. Consequently, in our view, the performance by Aford Awards to produce a modest decline in EBITDA for 2025 to £442,000 is a solid performance given the high costs of the increase in the minimum wage and the associated national insurance increases. These costs have had to be absorbed by the business.

Sales in 2025 were £3.85m as compared to £3.66m in 2024. The associated EBITDAs were £442,000 and £556,000 respectively.

Signature Fabrics, the holding company for Friedman's and Milano International

The two companies together had sales of £6.03m as compared to £6.51m in 2024. The associated EBITDAs were a loss of £1.02m after a goodwill write-off of £1.42m in 2025, and £567,000 in 2024. The underlying EBITDA (excluding the goodwill write-off) was

£395,000 for 2025.

Having restored Milano back to a breakeven position, the increased labour costs (induced by the Government) have had a profound effect on the business. As a result, Milano is no longer cost-competitive with comparable products manufactured in China. While the quality of the Milano offering remains demonstrably superior, its current cost base renders it uncompetitive in the UK market. Action will, therefore, be required to restore Milano's competitiveness.

Financial review and performance of the CEPS Group continued

ICA

As shareholders are aware from recent announcements, in March 2026 the share capital of ICA was sold to a new company set up by Certania Holdings Gmbh for an enterprise value of some £30.45m, with CEPS receiving £14.01m for its equity and outstanding loan stocks.

The Board of CEPS has always been enthusiastic about ICA, its management team and the prospects for the sector. However, in the early part of 2025 it became clear, following a failed offer made to acquire another business, that the scale of funding required to fulfil the future development opportunity in ICA was beyond the financial capability of CEPS. Consequently, it was decided, with the management team, to commence a sales process with a view to finding a partner who would buy out CEPS and the external investors for cash and provide an opportunity for the management team to further grow the business.

Whilst all parties try to maintain 'business as usual' during the lengthy course of a sale process, status quo is the watchword. Shareholders will have seen the announcement on 1 April 2025 by ICA which covered several important matters. Firstly, it outlined an attractive 'bolt-on' acquisition of Align Building Control and Align Group (UK) ('Align'). Align filled a geographical gap in ICA's nationwide coverage and, whilst the brand name was retained, its operations were absorbed into the existing group. The acquisition was funded by a new loan from ICA's existing banker Santander which was repaid on the sale of ICA.

At that time, a modest share reconstruction was announced which locked in an equity share valuation of £12.00m for existing holders and then, when ICA was sold, the balance of the consideration above £12.00m was participated in by the existing shares and by a new class of shares which were held by the working directors and certain senior employees. Essentially, this structure was the equivalent of the introduction of a share option scheme. To summarise, up to a value for the equity of £12.00m CEPS would receive 55.58% of the consideration and above £12.00m CEPS would receive 50.70%.

ICA had another good year and sales were £23.00m in 2025 compared to £21.39m in 2024. The associated EBITDAs were £2.51m (after exceptional costs relating to the sale process of £360,000) and £2.65m respectively.

Share capital There was no share issuance in the current year and, therefore, the issued share capital remains at 21,000,000 shares as it has since September 2021.

Debt structure In the accounts presented here the external debt in CEPS totals £4.95m. The £2.00m loan from a third party, with a coupon of 7%, was extended in May 2025 by a further 12 months at 9% and was due to be repaid by 30 June 2026 or earlier, at CEPS choice. The loan from Chelverton Asset Management Limited of £2.95m remained with a coupon of 5% and was repayable with a notice period of 18 months. In a full year, the interest charge would be £327,500.

Cash held by the Company at the financial year end was £628,000 (2024: £212,000) and Group cash was £1.11m (2024: £677,000).

Whilst at the year-end CEPS had external debt of £4.95m, as noted above, this was repaid in full on 9 March 2026.

Cash in CEPS at the end of April 2026 was an elevated £9.2m, reflecting the large cash receipt from the sale of ICA. This represents 43.66p per share.

Shareholder value creation As part of the Board's deliberations on how to allocate the cash proceeds from the sale of ICA, numerous factors have been considered.

Firstly, as shareholders will be aware, the Board decided to repay the Company's outstanding debt immediately, as set out above.

Secondly, the Board is investigating the possibility of making further acquisitions not only to add to the Aford Awards Group but also considering a stand-alone acquisition to 'replace' the investment in ICA, although nothing is under active consideration at this time.

Thirdly, recognising the fundamental change in the CEPS structure and scale following the disposal of ICA, the Board considers it may be appropriate to propose a return of capital to shareholders. The Board is considering various options and will look to come forward with an appropriate strategy in due course.

As stated in previous reports, the shareholder register of CEPS is made up of many shareholders who have owned a relatively small number of shares for a very long time. The Board has decided that, following the disposal of ICA, which represented some two thirds of the sales of the CEPS Group, the shareholder base should be provided with an opportunity to sell its shares in a cost effective and simple manner.

I summarise the profit/value creation events:

1. Increase in the profits of the three subsidiaries

   No increase as explained above.

2. Self-funded 'bolt-on deals' in each of the three subsidiaries in the manner that has occurred over the past five years

   Acquisition of Align by ICA.

3. Repayment of loan stocks from the subsidiaries, absent any acquisitions

   In April 2025 ICA repaid £610,000 of loan stock. No other loan stock repayments took place.

4. Increase in CEPS' shareholdings in its subsidiary companies

   No increase in the shareholdings.

5. Share buy backs and cancellation

   There was no share buy back in the year.

6. Offer to buy a subsidiary

Overshadowing all other developments, the sale process of ICA commenced in 2025 and completed on 6 March 2026.

Share price On the 12 May 2025 the share price was 21.00p. The share price as at 7 May 2026 was 43.00p.

Outlook Going forward in 2026, like everyone, we are hopeful that the conflict in the Middle East is resolved quickly.

Once this occurs, several positive steps will be expected to follow. There will be the continued anticipated decline in inflation, and it is to be hoped this will lead to a steady, but regular, decline in interest rates in the second half of the calendar year. Historically, that sort of environment has been very positive for small company trading performance, confidence and ultimately, of course, share prices.

As mentioned in my introduction, the global backdrop remains highly uncertain. However, given this Government's disappointing performance during its first two years in office, it is reasonable to expect, and hope, that it has learnt from its mistakes and will improve its performance.

For the UK to make progress economically, the theories of Dr. Arthur B. Laffer, as articulated in his recent excellent book 'Prosperity Through Growth', need to be embraced by Government. The book's argument is that we need to shrink public spending and cut taxes. Of course, there is little likelihood that the current Government has the nerve and character to 'do the right thing'. It is to be hoped that, at the very least, it does less that is detrimental to the economy.

Having repaid all the external debt in CEPS and exploring an appropriate strategy by which to return capital to shareholders, the next challenge to be confronted by the Company is investing its large cash reserves in profitable and attractive businesses which will develop the CEPS Group over the next few years.

David Horner

Chairman

11 May 2026

Strategic Report

The directors present their Strategic Report on the Group for the year ended 31 December 2025.

The business model The principal activities of CEPS PLC are that of a holding company for service and manufacturing companies, acquiring stakes in stable and steadily growing entrepreneurial companies. Its objective is to generate capital growth by aggregating the steadily growing profits from the subsidiary companies using their cash flows to repay acquisition debt. In due course, the objective is to provide a robust and steadily growing dividend stream from an increasing number of growing, profitable and cash generative entrepreneurial companies.

The companies that have been acquired are in a range of sectors and operate in niche markets, thereby diversifying the risk. Aford Awards is a sports trophy and engraving company; Friedman's is a convertor and distributor of specialist lycra and Milano International, trading as Milano Pro-Sport, is a designer and manufacturer of leotards; ICA Group, comprising Align, Hickton Quality Control, Cook Brown, Morgan Lambert and Qualitas Compliance, provides services to the construction industry. ICA Group was subsequently sold in March 2026. Segmental analysis is given in note 4 to the accounts.

Review of the business A review of the business and its prospects are set out in the Chairman's Statement on pages 3 to 7.

The Group's internal reporting system enables the Board to assess the strategic direction of the Group against agreed targets. The table below shows the most important key performance indicators used by the Group:

The Chairman has commented on the main key performance indicators in his Statement on pages 3 to 7.

The Board also monitors matters relating to health and safety and the environment and reviews them at its regular meetings. The risks to the business arising from changes to the trading environment and employee retention and training are also regularly monitored and reviewed.

The Board operates a continuous process for identifying, evaluating and managing risk. The Board is responsible for the Group's system of internal controls and for reviewing its effectiveness. The system is designed to manage, rather than eliminate, the risk of failure to achieve the Group's strategic objectives and can only provide reasonable, but not absolute, assurance against material misstatement or loss.

The Board monitors financial controls through the setting and approval of annual budgets throughout the Group and the regular review of monthly management accounts.

Each Group company has defined authorisation levels for expenditure, the placing of orders and signing authorities. The daily cash movements of the Group companies are reconciled and monitored by their finance departments. The Group's cash flow is monitored by the Board.

Review of the business

continued

Each year on behalf of the Board, the Finance Director attends audit review meetings at each of the Group companies at which the external auditors present their findings, including a comprehensive review of risks/potential risks which cover both financial and non-financial issues which could potentially affect a Group company.

If any issues are identified by the Group companies at the regular company board meetings these are raised at the next CEPS Board meeting. However, depending on the severity of the issue, information may be disseminated to the Board immediately.

The key risks the Board seeks to mitigate are: competition, dependence on key personnel and the supply chain.

Competition - while the Group's trade is differentiated, there is still significant pricing pressure and the barriers to entry are relatively low. As a result there is the risk that competitors could emerge to challenge the products offered by the Group. This could result, over time, in price competition and margin pressure. In order to mitigate this pressure, local management seek to hold regular discussions with customers and actively monitor the market for changes in competitors' prices.

Dependence on key personnel - the Group's performance is largely dependent on its subsidiary staff and managers. The success of the Group will continue to be dependent on the expertise and experience of the directors and the management teams, and the loss of personnel could still have an adverse effect on the Group. This risk is mitigated by ensuring that key personnel are suitably incentivised and contractually bound.

Supply chain - the differentiated nature of the Group's trade means that it is exposed to a reliance on a small number of suppliers. The Group mitigates this risk through effective supplier selection and procurement practices.

See note 2 for an assessment of the financial risks.

Directors' duties The directors of the Company are required to act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006 which is summarised as follows: 'A director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole'.

The directors are aware of their obligations with regard to the matters under section 172, namely:

1. the likely consequences of any decision in the long term;

2. the interest of the Company's employees;

3. the need to foster the Company's business relationships with suppliers, customers and others;

4. the impact of the Company's operations on the community and the environment:

5. the desirability of the Company maintaining a reputation for high standards of business conduct; and

6. the need to act fairly between members of the Company.

The Board regularly receives reports from management on issues in respect of shareholders, suppliers, the community, the environment and regulators, which it takes into account in its decision-making process. In addition to this, the Board seeks to understand the interests and views of the organisations' stakeholders by engaging with them directly as appropriate.

The Board recognises its prime responsibility under UK corporate law is to promote the success of the Group for the benefit of its shareholders as a whole.

Directors' duties continued At 31 December 2025 the Group employed 305 (December 2024: 282) people and they remain the Group's most important asset. It is the policy of the Group that there should be no unfair discrimination in considering applications for employment, including those from disabled persons. All employees are given equal opportunities for career development and promotion. Health and safety committee meetings are held within the operating businesses.

The Board believes that the growth strategies of the companies will be beneficial to customers and suppliers. They build relationships with suppliers and the policy is to pay consistently and meet payment terms. High standards of service are a key measure for customers and maintain reputation and relationships.

In addition to this, the Board seeks to understand the interests and views of the organisations' stakeholders by engaging with them directly as appropriate.

Future developments A review of the business and its prospects are set out in the Chairman's Statement on pages 3 to 7.

By order of the Board V E Langford Company Secretary 11 May 2026

Directors' Report

The directors have pleasure in submitting their report and the audited consolidated financial statements of the Group for the year ended 31 December 2025.

Directors The directors of the Company who were in office during the year and up to the date of signing the financial statements were as follows:

D A Horner (66) is an executive director and Chairman. He qualified as a Chartered Accountant in 1985 with Touche Ross & Co. In 1986 he joined 3i Corporate Finance Limited. In 1997 he set up Chelverton Asset Management Limited which specialises in managing portfolios of investments in private companies and small to medium size public companies. He manages the Chelverton UK Dividend Trust Plc and is a director of a number of private companies. In 2013 he resigned his membership of the Institute of Chartered Accountants in England and Wales, as his career is now fully involved in fund management.

V E Langford (64) is Group Finance Director. She is a Chartered Accountant and is also the Company Secretary of CEPS PLC. She has management experience across a wide range of business functions, typically with finance at the core, but also including HR, compliance and IT. She has significant project management experience with expertise in financial analysis, contract negotiation and company acquisitions.

D E Johnson (66) is a non-executive director. He has worked in the investment sector for a number of years. Between 2003 and 2013 he worked for Panmure Gordon as Head of Sales from 2006 and then Head of Equities from 2009. More recently he has acted as a non-executive director of both private and AIM quoted companies. He is Chairman of Diversified Energy Company PLC.

K J Allen (70) is a non-executive director. He is a qualified accountant with over 30 years' experience as a director in both public and private companies across a range of sectors.

The director retiring by rotation in accordance with the Company's articles of association is K J Allen who, being eligible, offers himself for re-election.

The Company purchased and maintained throughout the financial year and up to the date of this report, Directors' and Officers' liability insurance in respect of itself and its directors.

Significant shareholdings The following shareholders held more than 3% of the Company's ordinary shares at 13 April 2026:

1 Included within this holding are shares held on behalf of D A Horner and close family members. Holdings are on behalf of D A Horner (1,455,338 shares, 6.93%) and on behalf of Mrs M C Horner (22,500 shares, 0.11%).

2 Included within this holding are 1,086,328, 5.17%, shares held on behalf of D A Horner.

3 The overall holding for Mrs M C Horner is 1,022,500 shares, 4.87%, being 1,000,000 shares held personally and 22,500 shares held in Charles Stanley & Co Ltd Rock (Nominees) Ltd. The overall beneficial holding of the Horner family is 6,299,000 Ordinary Shares, representing 29.99% of the Company's issued share capital.

4 Included within this holding are 1,200,000 shares, 5.71%, held by M E Thistlethwayte and his wife Mrs M Thistlethwayte.

5 Included within this holding are 705,376 shares of which M D Pollard is the beneficial owner, 3.36%.

Financial and treasury policy The Group finances its operations by a combination of retained profits, management of working capital, debtor backed working capital facilities and medium-term loans. The disclosures for financial instruments are made in note 26a.

For further details of Group financial risk and management thereof see note 2. No dividend was paid in 2025 (2024: £nil).

Disclosure of information So far as each director is aware, there is no relevant information of which the Company's to auditor auditor is unaware. Relevant information is defined as 'information needed by the Company's auditor in connection with preparing their report'. Each director has taken all

the steps (such as making enquiries of other directors and the auditor and any other steps required by the director's duty to exercise due care, skill and diligence) that he/she ought to have taken in his/her duty as a director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Independent auditor The re-appointment of Saffery LLP for the year ending 31 December 2026 will be subject to the approval by shareholders at the Annual General Meeting to be held on 15 June 2026.

Statement of directors' The directors are responsible for preparing the Annual Report and financial statements in

responsibilities 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 prepared the Group and parent company financial statements in accordance with UK-adopted International Accounting Standards (UK-adopted IAS). 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 Group and the Company and of the profit or loss of the Group for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

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

• prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Company and the Group 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 the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Company is compliant with the AIM Rule 26 regarding the Company's website.

Employees The Group employed 305 (2024: 282) employees at the year end.

The Group's policy is to actively involve its employees in the business to ensure that matters of concern to them, including the Group's aims and objectives and the financial and economic factors which impact them are communicated in an open and regular manner.

The directors are committed to delivering the highest standards of health and safety for employees, customers and others that might be affected by the Group's activities.

The Group is committed to employing the right people, training them well and promoting from within wherever possible. Well trained and motivated employees are key to delivering good service to the Group's customers and are fundamental to the long-term success of the business.

The Group operates an equal opportunities policy that aims to treat individuals fairly and not to discriminate on the basis of sex, race, ethnic origin, disability or any other basis. Applications for employment are fully considered on their merits, and employees are given appropriate training and equal opportunities for career development and promotion.

SECR disclosures None of the individual companies in the CEPS Group exceed the thresholds where Streamline Energy and Carbon Reporting (SECR) is required and, as none are considered to be energy intensive users, carbon data disclosures and trends have not been reported.

Post balance sheet events The Group decided to sell and realise its shareholding in the ICA Group Limited in 2025 and the sale became highly probable once an acceptable offer and exclusivity was agreed with Certania Holding GmbH in October 2025. Whilst not subject to an unconditional contract in the year, the sale was concluded on 6 March 2026 and, in accordance with the commitment to sell made before 31 December 2025, the assets and liabilities of this disposal group are recorded as held for sale. The trading results are presented as discontinued activities and, in view of the size of this segment compared to the continuing businesses, this is shown on the face of the Consolidated Statement of Comprehensive Income.

On 9 March 2026 the £2,950,000 loan from Chelverton Asset Management Limited and the £2,000,000 loan from a third party were repaid in full.

Future developments Reference to future developments is included in the Strategic Report on page 8.

By order of the Board V E Langford Company Secretary 11 May 2026

Corporate Governance

As an AIM-quoted company, the Board recognises the importance of robust governance principles to the effective stewardship of the Group. In view of the Group's size, nature, and Board composition, we have formally adopted the 2023 QCA Corporate Governance Code for Small and Mid-Size Quoted Companies (the QCA Code), which came into effect in April 2024.

The Board recognises that its decisions will impact the corporate culture of the Group and that this will affect the performance of the business. The Board is also very conscious that the tone and culture that it sets will greatly impact all aspects of the Group and the way employees behave and operate. The importance of sound ethical values and behaviours is crucial to the ability of the Group to successfully achieve its corporate objectives.

The Board has regular interaction with Group company employees and monitors corporate culture in this way. Additionally, it ensures its sound ethical practices and behaviours are deployed at Group company board meetings.

The Group is also aware of its responsibilities for ensuring adherence to key internal and external policies including those relating to slavery, diversity, anti-corruption, bribery and whistleblowing.

The sections below outline how we currently comply with the ten principles of the QCA Code, which came into effect in April 2024. At its core, the QCA Code requires companies to seek to deliver long-term growth in shareholder value, while taking appropriate account of the interests of other stakeholders. This, in turn, depends upon an efficient, effective and dynamic governance framework, supported by clear and transparent communication, in order to foster and sustain confidence and trust.

QCA compliance principles 1 Establish a purpose, strategy and business model which promote long-term value

for shareholders

The Company's strategy is shaped by the Executive Board and is set out in the Annual Report 2025 and on the 'About Us' website page.

CEPS PLC is an AIM quoted, industrial holding company that combines the benefits of the financial structuring of private equity funding with the entrepreneurial drive and flair of incentivised management teams.

Our objective is to generate capital growth by aggregating the steadily growing profits from the subsidiary companies using their cash flows to repay acquisition debt.

In due course the objective is to provide a robust and steadily growing dividend stream from a number of growing, profitable and cash generative entrepreneurial companies, while retaining the flexibility to realise value through divestment when compelling offers arise.

The companies we have acquired and look to acquire are in a range of sectors and operate in niche markets, thereby, diversifying the risk.

1. Promote a corporate culture that is based on ethical values and behaviours

   CEPS fosters a culture grounded in disciplined capital allocation, operational accountability and long-term value creation. The Board seeks to promote an entrepreneurial yet responsible environment across its subsidiary companies, where management teams are empowered to grow their operations while adhering to strong financial controls and clear performance expectations. This culture supports the purpose of generating sustainable capital growth through the active management and development of its portfolio.

   The tone from the top is set by the Board and senior leadership through consistent engagement with subsidiary management, a clear focus on cash generation and profitability and a commitment to ethical conduct and sound governance. The Board

   QCA compliance principles

   continued

   ensures that strategic objectives and corporate values are aligned, and that decision-making at all levels reflects a balance between growth ambitions and prudent risk management.

   CEPS monitors its corporate culture through regular financial and operational reporting, direct interaction with subsidiary management teams and ongoing assessment of performance against clearly defined targets. Incentive structures are designed to reinforce accountability and align management interests with those of shareholders. Where behaviours or outcomes deviate from expectations, the Board takes appropriate action, including enhanced oversight, management support or changes in leadership where necessary, to ensure that the desired culture is maintained across the Group.

2. Seek to understand and meet shareholder needs and expectations

   The Board is committed to communicating openly with shareholders to ensure that its strategy and performance are clearly understood. The Board communicates with shareholders through the Annual Report and the Interim Statement, trading and other announcements made via RNS and at the Annual General Meeting where the Board encourages investors to participate. The Company also maintains a website, https://www.cepsplc.com, which contains information on the Group's business, corporate information and specific disclosures required under AIM Rules and the QCA Code.

   In this way the directors have developed a good understanding of the needs and expectations of all elements of the Company's shareholder base.

   There have been no significant votes against resolutions at previous AGMs.

   As the companies within the Group expand, we continually review the risks and uncertainties facing the Group to ensure we identify any new key risks and how we implement appropriate action to manage, and where possible mitigate, these risks.

3. Take into account wider stakeholder interests, including social and environmental responsibilities, and their implications for long-term success

   The Board recognises its responsibility under UK law to promote the success of the Group for the benefit of its stakeholders and understands that the business has a responsibility towards its stakeholders including shareholders, employees, customers, suppliers and to the local community. The Board seeks to maintain constructive relationships with these groups and to understand their respective priorities, recognising that these relationships are fundamental to the Group's long-term performance.

   Responsibility for stakeholder engagement primarily sits with the management teams of the subsidiary companies, who maintain regular dialogue with employees, customers and suppliers in the normal course of business. Feedback from these interactions is reported to the CEPS Board and informs decision-making, strategy and risk management.

   The Board sets the tone for responsible business practices by establishing minimum standards across the Group, including appropriate insurance coverage, financial reporting and controls, and adherence to legal and employment requirements. These standards are monitored through regular reporting and board oversight at both Group and subsidiary level. Where issues arise, the Board works with subsidiary management to ensure appropriate corrective actions are taken.

   The Group's strategy of acquiring and developing profitable businesses in niche markets is underpinned by key resources including capital, experienced management teams, professional advisers and, on occasion, external funding. The Board recognises the increasing importance of environmental and social matters to stakeholders and longterm value creation. While CEPS itself has limited operational activities and employees, the Board expects its subsidiary companies to develop and implement appropriate Environmental, Social and Governance ('ESG') policies proportionate to their operations, and progress in this area is kept under review.

   QCA compliance principles

   continued

   Environmental and social matters

   The Board has considered the environmental and social issues that are material to the Group, having regard to its purpose, strategy and business model. As the investment company with no significant direct operations of its own, the material ESG issues for CEPS are primarily those arising within its subsidiary companies. Following review, the Board has identified the following as the most relevant environmental and social matters at Group level:

   Environmental: compliance with applicable environmental regulations across subsidiary operating sites; responsible waste management and disposal practices; and the minimisation of environmental impact within day-to-day operations proportionate to the scale of each business.

   Social: employee health, safety and wellbeing; fair employment practices and compliance with employment law; and responsible engagement with customers and suppliers.

   Key Performance Indicators ('KPIs') and Performance Tracking

   Given the size and structure of the Group, formal Group-wide ESG KPIs have not yet been established. ESG-related matters are currently monitored at subsidiary level through regular operational and financial reporting to the CEPS Board. The Board expects subsidiary management teams to maintain practices appropriate and proportionate to the scale of their operations.

   The Board recognises that as the Group grows and its subsidiary companies increase in scale, it may become appropriate to introduce more formalised environmental monitoring and reporting, including in relation to energy consumption and carbon emissions. This will be kept under review as the Group develops.

4. Embed effective risk management, internal controls and assurance activities, considering both opportunities and threats, throughout the organisation

   Risk management is embedded across the Group through regular engagement with subsidiary companies. The Board works closely with management teams to support the achievement of strategic objectives, while identifying, assessing and addressing key risks, including operational, financial and emerging risks. Matters identified at subsidiary board level are reported to the CEPS Board on a regular basis with more significant issues escalated promptly where necessary.

   The Board has considered the level of risk it is prepared to accept in pursuit of its strategic objectives. Given the nature of CEPS as an investor in stable, profitable and steadily growing entrepreneurial UK companies, the Board maintains a medium risk appetite overall. The Group seeks to generate sustainable capital growth through the acquisition and development of profitable businesses in niche markets, and therefore prioritises financial discipline, cash generation and operational stability over speculative or high-risk opportunities.

   In financial terms, the Board is prepared to accept a measured degree of leverage at subsidiary level where this supports value-creating acquisitions, provided that cash flows are sufficient to service debt obligations. The Board has a low tolerance for reputational, legal and regulatory risk and expects all subsidiary companies to operate within applicable laws and to adhere to the Group's standards of ethical conduct.

   The Group maintains a structured approach to financial control, including the approval of annual budgets, regular review of monthly management accounts and clearly defined authorisation limits for expenditure and contractual commitments. Cash flow is closely monitored at both subsidiary and Group level, with daily cash management processes in place within operating businesses.

   The Board receives assurance on the effectiveness of controls through ongoing financial reporting and the annual audit process. The Finance Director attends audit review meetings across the Group, where external auditors present their findings, including

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   identified risks and control recommendations covering both financial and non-financial areas. The Board reviews these findings and ensures that appropriate actions are taken where improvements are required.

   The Board continues to assess the effectiveness of the Group's risk management and internal control systems and, where appropriate, enhances processes to respond to changes in the business environment.

   The Board recognises the growing importance of climate-related risks and opportunities to long-term value creation and acknowledges the QCA Code's expectation that companies articulate their governance approach in this area.

   Given the size and nature of CEPS, a small AIM traded company with limited direct operational activities and a portfolio of niche entrepreneurial UK businesses, the Board considers that a formal, standalone climate risk governance framework would not currently be proportionate to the Group's scale or exposure. Accordingly, the Company is explaining rather than fully complying with this aspect of the QCA Code at this time.

   The Board does, however, take a pragmatic approach to climate-related matters. Physical and transitional climate risks are considered as part of the Group's broader risk management process, particularly in the context of acquisitions and ongoing oversight of subsidiary operations. Where climate-related factors are relevant to a subsidiary's operations, markets or regulatory environment, these are reviewed and discussed at subsidiary board level and reported to the CEPS Board as appropriate.

   The Board intends to keep this position under review as the Group evolves and will seek to enhance its climate-related governance disclosures in future reporting periods in a manner proportionate to the Group's size and the materiality of climate risks to its portfolio.

5. Establish and maintain the Board as a well-functioning, balanced team led by the Chair

   The purpose of the Board is to ensure that the business is managed for the long-term benefit of all shareholders, whilst at the same time having regard for all stakeholders.

   The Board has a formal schedule of matters reserved for its decisions. There is a minimum of six Board meetings spread across each year which tie in, as far as possible, with the Group's financial reporting calendar. Additional meetings are held as required. Monthly management accounts from the Group companies are submitted to the Finance Director and are duly compared to budget and approved on a month-by-month basis.

   The Board is accountable to the shareholders for the management and success of the Group and is responsible for providing effective controls to assess and manage risks in the Company.

   The Board currently comprises an Executive Chairman, a Finance Director and two independent non-executive directors. The Board considers that its composition provides an appropriate balance of skills, experience and independence for the size and nature of the Group. The non-executive directors are considered independent and bring objective judgement to Board deliberations. The Board acknowledges the QCA guidelines around the Chair being an executive director. The Board believes this structure remains appropriate given the Company's scale, with appropriate safeguards in place to ensure balanced decision-making and independent oversight

   The Chairman leads the Board through general direction on funding and acquisitions and also provides strategy papers for the Group and individual subsidiaries. The Board has established procedures to identify and monitor potential or actual conflicts of interest.

   The Board is supported by the Audit, Remuneration and Nominations Committees, each of which has access to information, resources and advice that it deems necessary, at the Company's cost, to enable the Committee to discharge its duties.

   The Committees' terms of reference are on the AIM Rule 26 page of Company's website.

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   The Audit Committee is comprised of the two independent non-executive directors and is chaired by Kevin Allen. The Audit Committee will meet twice a year and is responsible for ensuring that the financial performance of the Group is properly reported and monitored and for meeting with the auditors and reviewing their recommendations relating to the accounts and internal control systems. The external auditors will attend all Audit Committee meetings. The opportunity is given to the non-executive directors to meet with the external auditors at least once a year without any executive directors being present.

   The Remuneration Committee comprises the two independent non-executive directors and is chaired by David Johnson. The Remuneration Committee reviews and, if appropriate, sanctions remuneration proposals made by the executive directors.

   No director is permitted to participate in discussions or decisions concerning their own remuneration. The Remuneration Committee meets as and when necessary. The non-executive directors are not entitiled to performance-related remuneration.

   The Nominations Committee comprises the Chairman and one of the independent non-executive directors. The Nominations Committee reviews and, if appropriate, approves recommendations for the appointment of additional directors or the replacement of current directors. It also reviews succession planning for the Company.

   The Board has also established procedures to ensure AIM Rules are complied with and that there is close liaison with the Company's nominated adviser.

   The Board and its Committees receive appropriate and timely information and minutes are kept of all relevant Committee meeting matters.

   Any director can challenge proposals with decisions being taken after discussion. Any director can ask for a concern to be formally noted. Specific actions arising from meetings are agreed by the Board or the relevant Committee and then followed up by management.

   Directors have access to advice or services needed to enable them to carry out their roles and duties.

   In the year to 31 December 2025 there were six formal Board meetings held and all directors were in attendance for all meetings. In addition, there were two Audit Committee meetings, two Nomination Committee meetings and two Remuneration Committee meetings.

   During 2025, attendance of the directors at the six Board meetings were as follows:

   Director	Meetings	Attended
   David Horner	6	6
   Vivien Langford	6	6
   Kevin Allen	6	6
   David Johnson	6	6

   There are Board meetings every two months with interim meetings held remotely to review the management accounts, any ongoing concerns and matters arising.

   All directors are subject to reappointment by shareholders at the first Annual General Meeting following their appointment and, thereafter, by rotation. As well as the Annual General Meeting ad hoc meetings will be held, where necessary, relating to shareholder matters.

   The directors spend such time as is necessary to ensure that their roles and duties are carried out effectively. As well as attending Board meetings, Board members are consulted on an ad hoc basis with regard to general matters arising within the subsidiaries, including potential acquisitions and funding requirements.

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6. Maintain appropriate governance structures and ensure that individually and collectively the directors have the necessary up-to-date experience, skills and capabilities

   The skills and experience of the Board directors are set out in their biographical details included within the Directors' Report of the Company's Annual Report. The experience and knowledge of each of the directors, including business and financial, gives them the ability to constructively challenge strategy and to scrutinise performance.

   In addition, the Company's non-executive directors have held senior executive positions. The directors of the Company are:

   David Horner (Executive Chairman)

   Vivien Langford (Finance Director and Company Secretary) Kevin Allen (Independent Non-Executive Director)

   David Johnson (Independent Non-Executive Director)

   Role of the Executive Chairman: David Horner

   The Chairman is also an executive director. The Board acknowledges the QCA guidelines on this matter and considers the role of executive chair appropriate for the Company's size.

   The Executive Chairman has overall responsibility for corporate governance and for promoting high standards throughout the Company. As well as leading and chairing the Board, the Executive Chairman is responsible for ensuring:

   • The Committees are properly structured and operate with appropriate terms of reference;

   • The performance of individual directors, the Board and its Committees are reviewed on a regular basis;

   • The Company has a coherent strategy and sets objectives against this; and

   • There is effective communication between the Company and its shareholders.

   Roles of the Finance Director and Company Secretary: Vivien Langford

   The roles of Finance Director and Company Secretary are combined. The Board acknowledges the QCA guidelines on this matter and considers the joint roles appropriate for the Company's size.

   The Finance Director is responsible for providing financial oversight of the Group, preparing the accounts, monitoring the performance of the Group companies, reporting on financial matters to the Board and providing financial input on acquisitions.

   The Company Secretary is responsible for providing clear and timely information flow to the Board and its Committees and supports the Board on matters of corporate governance and risk. The Company Secretary has direct access to the Chairman on matters of Corporate Governance.

   Role of the Independent Non-Executive Directors: Kevin Allen and David Johnson The role of the independent non-executive directors is to contribute independent thinking and judgement through the application of their external experience and knowledge, to scrutinise the performance of the executive directors, to provide constructive challenge and to ensure that the Company is operating within the governance and risk framework approved by the Board.

   Skills and Capabilities

   David Horner: David has an excellent skillset that enables him to source, value and acquire appropriate companies for the Group. These skills include but are not limited to contract negotiations, financial analysis and restructuring companies.

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   Vivien Langford: Management experience across a wide range of business functions, typically with finance at the core, but also including HR, compliance and IT. Strategic thinking and communication, capable of explaining the big picture whilst planning for delivery and implementation. Significant project management experience with expertise in financial analysis, contract negotiation and company acquisitions. Excellent interpersonal skills including the ability to work with a variety of levels of seniority both internally and externally and nationally and internationally.

   Kevin Allen: A qualified accountant with over 30 years' experience working as a director in both public and private companies across a range of sectors.

   David Johnson: In depth knowledge of management and strategy from an extensive career following and analysing companies. Focus on shareholder returns and investor relations. Experienced non-executive director across a broad range of sectors. Ability to support and challenge executive teams.

   Each director is responsible for maintaining the skill set required by the role and this is achieved by continuing professional education, technical updates from professional bodies and advisors and an active role assisting the existing Group companies.

   The Board, as a whole, is well placed to implement the Company's strategy.

   David Horner oversees funding and acquisitions for the subsidiaries, providing a wealth of experience in similar transactions. David, along with the Board, outlines the proposed strategy for the Group as a whole and for each of the subsidiaries primarily with regard to expanding the subsidiaries by purchasing bolt-on businesses. David has the necessary key contacts to avail to the subsidiaries any necessary additional funding and acquisitions. His knowledge and key contacts assists the Board with making decisions on proposed acquisitions and growth plans.

   The Directors' skillsets are enhanced on a transaction-by-transaction basis due to the knowledge attained through the due diligence preparation. The Directors receive regular updates from the nominated adviser, law firms and accountants. They also receive regular updates through professional bodies such as the ICAEW.

   External advice is sought for due diligence on acquisitions and expert advice on particular elements of an acquisition, for example employment law, property law, etc. Overall the Board has sufficient expertise in acquisitions not to look for external advice save for due diligence, legal advice, etc.

7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

   The criteria and objectives against which performance is assessed includes a range of qualitative and quantitative measures, such as strategic oversight, governance, risk management, Board composition, and individual contribution. The Board will also consider whether to periodically engage an external independent facilitator to support the review process.

   An informal board performance review was conducted during 2025 as part of the Board's regular meeting cycle. The review was led by the Executive Chairman and considered the effectiveness of the Board as a whole, the performance of individual directors and the functioning of the Board's committees. The process involved open discussion among Board members against the key criteria noted above.

   The review concluded that the Board continues to operate effectively and that directors demonstrate the skills, commitment and experience appropriate to the Company's size and strategic needs. No significant issues were identified. The Board noted the importance of continuing to ensure that succession planning remains under active consideration through the Nominations Committee, and that committee terms of reference are kept up to date and published on the Company's website.

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   As no material in-year events occurred that warranted a specific triggered review, no additional review process was undertaken during the year.

   No externally facilitated Board performance review has taken place to date, and there are no current plans to commission one. Given the size of the Board and company, comprising four directors, two of whom are independent non-executives and a further employee, the Board considers that a formal external review would not be proportionate to the Company's scale at this time. The Board will keep this position under review and would consider engaging an external facilitator if the size or complexity of the Board were to increase materially, or if circumstances otherwise warranted it.

   Responsibility for succession planning rests with the Nominations Committee. The Committee keeps the composition of the Board under regular review to ensure it maintains an appropriate balance of skills, experience, independence, and knowledge required to meet the Company's current and future needs. While the Committee is satisfied that the Board currently has the appropriate capabilities, it continues to plan for orderly succession.

   Appointments to the Board are made on merit, with candidates selected based on their skills, experience, and personal qualities, and their ability to contribute effectively to the Board's deliberations. The Board also recognises the importance of diversity, including gender, background, and experience, and this is taken into account as a key factor in Board appointments to ensure a balanced and effective Board.

8. Establish a remuneration policy which is supportive of long-term value creation and the Company's purpose, strategy and culture

   The Board recognises that an effective remuneration policy is key to supporting the Company's long-term success and aligning the interests of management with those of shareholders, while also reflecting the Company's purpose, strategy and culture.

   Responsibility for setting and reviewing remuneration policy rests with the Remuneration Committee. The Committee ensures that remuneration arrangements are appropriate for the size and stage of development of the Company and are designed to attract, retain and motivate high-quality executives, while avoiding excessive risk-taking.

   The Company's remuneration structure is designed to be straightforward and transparent. Executive remuneration at subsidiaries typically comprises a combination of base salary and performance-related incentives, with an appropriate balance between fixed and variable elements. Incentive arrangements are linked to the achievement of key financial and strategic objectives, thereby promoting the long-term growth of shareholder value.

   The Board seeks to ensure that remuneration practices across the Company support and reinforce the desired corporate culture and behaviours. In particular, the Remuneration Committee considers subsidiaries' wider workforce pay and conditions when determining executive remuneration, to ensure consistency and fairness.

   The Company encourages share ownership by senior management, recognising that this helps to align their interests with those of shareholders. Where appropriate, incentive arrangements may include equity-based components.

   The Remuneration Committee works closely with other Board Committees, where relevant, to ensure that performance targets are aligned with the Company's strategy and risk framework, and that performance is assessed appropriately against those targets.

   The Board remains committed to maintaining an open and transparent dialogue with shareholders regarding remuneration. The Company provides appropriate disclosure of its remuneration policies and practices within the Annual Report and, where required, seeks shareholder approval for any significant changes to remuneration structures or the introduction of share-based incentive schemes.

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9. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Board recognises the importance of maintaining an open and effective dialogue with shareholders and other key stakeholders, and is committed to ensuring that the Company's governance and performance are communicated in a clear, transparent and timely manner.

The Board engages with shareholders through a variety of channels, including the publication of the Annual Report, interim results, regulatory announcements and updates available on the Company's website. These communications are intended to provide shareholders with a balanced and understandable assessment of the Company's performance, strategy and prospects.

The Annual General Meeting ('AGM') is the principal opportunity for private shareholders to meet and discuss the Group's business with the directors. There is an open question and answer session during which shareholders may ask questions both about the resolutions being proposed and the business in general. The directors are also available after the meeting for an informal discussion with shareholders.

The Board is supported by the Audit, Remuneration and Nominations Committees, each of which has access to information, resources and advice that it deems necessary, at the Company's cost, to enable the Committee to discharge its duties. These duties are set out in the terms of reference which are available on the Company's website.

Audit Committee Report

The Audit Committee comprised Kevin Allen (Chair) and David Johnson throughout the year. Both members are independent non-executive directors. The Committee met twice during 2025.

During the year, the Committee's principal activities included: reviewing the integrity of the Group's financial statements and significant accounting judgements; considering the external auditors' findings and recommendations arising from the 2024 audit; reviewing the effectiveness of the Group's internal financial controls; and assessing the independence and objectivity of the external auditors. The non-executive directors also met privately with the external auditors without executive directors present on one occasion during the year.

The Committee was satisfied that the financial statements present a fair and balanced view of the Group's position and performance, and that the external audit process was conducted effectively. No significant concerns were raised by the auditors that required escalation to the full Board.

Given the size of the Company, the Board does not consider it necessary or proportionate to maintain a formal internal audit function at this time. The Committee keeps this position under review annually.

Remuneration Committee Report

The Remuneration Committee comprised David Johnson (Chair) and Kevin Allen throughout the year. The Committee met twice during 2025.

During the year, the Committee reviewed the remuneration arrangements for the executive directors, including base salaries and any performance-related elements, having regard to the Company's performance, the interests of shareholders and the pay and conditions of the wider workforce across the Group. No significant changes to executive remuneration structures were made during the year.

The Committee is satisfied that the Company's remuneration arrangements remain appropriate for its size and stage of development, are aligned with the Company's strategy and culture, and do not encourage excessive risk-taking. Full details of directors' remuneration are set out in note 8 within the Notes to the Financial Statements section of the the Annual Report.

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The Nominations Committee

The Nominations Committee is responsible for reviewing the structure, size and composition of the Board and for identifying and recommending candidates for appointment.

Nominations Committee Terms of Reference: The purpose is to promote a culture of integrity throughout the Company and to assist the Company in identifying and recommending new nominees for election to the Board.

On 23 June 2025 the Company announced the results of its AGM. There was no significant proportion of votes against any resolution.

Board challenges during 2025

The Board considers it important to reflect openly on challenges encountered during the year and how these were addressed, in the interests of transparent governance.

During 2025, the Company became aware that commercially sensitive information relating to a potential transaction involving one of its subsidiary companies had entered the public domain ahead of any formal announcement The Board responded promptly, convening at short notice to assess the situation and taking immediate steps to release an announcement to the market via RNS in order to cleanse the inside information as quickly as possible and ensure that all shareholders and potential investors had equal access to the relevant information. The Board's swift response reflected its commitment to compliance with its obligations under the AIM Rules and the Market Abuse Regulation.

Following this event, the Board reviewed its internal procedures around the management and communication of price-sensitive information. The Board satisfied itself that appropriate controls and awareness exist across the Group in relation to inside information protocols, and reminded relevant personnel of their obligations in this regard. No structural changes to the Board were required as a result, but the episode served to reinforce the importance of maintaining rigorous information barriers and clear escalation procedures when potential transactions are under consideration.

Going concern The directors continue to adopt the going concern basis in preparing the financial statements for the reasons explained in Notes to the Financial Statements under Note 1, Accounting policies, on page 38.

By order of the Board V E Langford Company Secretary 11 May 2026

Independent Auditor's Report to the members of CEPS PLC

Opinion We have audited the financial statements of CEPS PLC (the 'parent company') and its subsidiaries (the 'Group') for the year ended 31 December 2025 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated and Company Statement of Changes in Equity, the Consolidated and Company Statements of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted International Accounting Standards.

In our opinion the financial statements:

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

• have been properly prepared in accordance with UK-adopted International Accounting Standards; and

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

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

  Our approach to the audit We tailored the scope of our audit to ensure that we obtained sufficient evidence to support our opinion on the financial statements as a whole, taking into account the structure of the Group and the parent company, the accounting processes and controls, and the industry in which they operate.

  As part of our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that involve making assumptions and considering future events that are inherently uncertain.

  Our Group audit scope included the audit of the Group and parent company financial statements. The Group consists of the parent company and 16 legal entities, and each was assessed as a separate component. Based on our risk assessment, we determined that ICA Group Limited, Hickton Quality Control Limited, Cook Brown Building Control Limited, Morgan Lambert Limited, Align Building Control Limited, Align Group (UK) Limited, Milano International Limited, Friedman's Limited, and Aford Awards Limited, represented the principal business units within the Group due to their size or risk characteristics.

  For all these components, a full scope audit was performed centrally by the Group engagement team. Cook Brown Energy Limited and Qualitas Compliance Limited were not material to the Group and no audit procedures were carried out.

  The components within the scope of our audit work, therefore, covered 97% of the Group's revenue and 99% of the Group's total assets.

  Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

  Independent Auditor's Report

  to the members of CEPS PLC continued

  Key audit matters continued Revenue recognition on long-term contracts

  The Group has several complex revenue streams each with distinct revenue recognition criteria.

  The revenue stream associated with Cook Brown Building Control poses the highest risk of material misstatement due to the inherent subjectivity involved in the assessment of the stage of completion at the year end.

  Due to the significance of revenue to the financial statements and the high level of subjectivity and judgements in its recognition, we consider this to be a key audit matter.

  While the other revenue streams within the Group are still considered to carry a risk of material misstatement due to the importance of revenue as a key performance indicator (KPI), they do not involve the same degree of subjectivity and are, therefore, not considered to be key audit matters.

  How our scope addressed this matter

  As part of our performed procedures we:

• Performed walkthrough procedures across the Group on all material revenue streams in which we identified and evaluated the design effectiveness and implementation of controls;

• Tested the recognition of contract revenue on contracts substantively by critically analysing the stage of completion calculations and agreeing revenue to underlying contracts and other third party audit evidence;

• Assessed the potential for contracts to be loss making through analytical review procedures across the entire contract population;

• Reviewed the consistency of application and appropriate disclosure of revenue recognition policies and application of IFRS 15 in the year;

• Performed a reconciliation of the contract liability recognised at the year end and corroborated this to third party evidence for a sample of contracts to ensure correct recognition at the year end;

• Reviewed a sample of contracts with customers to ensure that contractual terms were considered when determining the appropriate recognition criteria of revenue in line with IFRS 15;

• Reviewed orders/contracts around the year end to ensure they were recorded in the correct accounting period and that revenue was complete and accurate at the year end; and

• Undertook enquiries with management, read minutes of board and committee meetings held throughout the year and performed journal entry testing using audit data analytics tools in order to address the residual risk of management override.

  Based on our audit procedures performed, we did not identify any material misstatement in relation to revenue recognition on long-term contracts. We assessed that the accounting policies applied for revenue recognition were in accordance with IFRS 15.

  Carrying value of goodwill

  As at 31 December 2025, goodwill of £10,804,000 was recognised in the Group Statement of Financial Position. An impairment charge of £1,419,000 was recognised during the year in respect of Milano International Limited.

  Goodwill is assessed annually for impairment in accordance with IAS 36 Impairment of Assets. This is a judgemental process which requires significant estimates and assumptions to be made by management.

  Management's impairment assessment is based on a number of key estimates and assumptions, including future cash flows, growth assumptions and the discount rate applied.

  Independent Auditor's Report

  to the members of CEPS PLC continued

  Key audit matters continued Due to the significance of goodwill to the Group Statement of Financial Position and the inherent subjectivity involved in performing the impairment assessment, we consider it to be a key audit matter.

  How our scope addressed this matter

  As part of our performance procedures we:

• Performed walkthrough procedures over management's process for the goodwill impairment assessment in which we identified and evaluated the design effectiveness and implementation of controls;

• Verified that goodwill is allocated to appropriate Cash Generating Units (CGUs) in line with the requirements of IAS 36 Impairment of Assets and that the impairment assessment is conducted at this level;

• Reviewed the impairment assessment models for each Cash Generating Unit (CGU) to ensure they were consistent with the requirements of IAS 36 and had been appropriately sensitised;

• Tested the mathematical accuracy of the models;

• Obtained corroborative evidence for data used in the preparation of the model and significant judgements applied by management and assessed for evidence of contradictory information;

• Critically assessed the appropriateness of the discount rate where it was material to the result of the impairment assessment, which involved the use of an auditor's expert;

• Performed our own sensitivity analysis on the key assumptions;

• Reviewed disclosures made regarding the impairment assessment carried out in accordance with IAS 36 Impairment of Assets;

• Critically assessed management's cash flow forecasts underpinning the impairment assessment, including the achievability of key assumptions and the appropriateness of the specific risk premium applied to reflect execution risk within the forecasts; and

• Undertook enquiries with management and read minutes of board and committee meetings held through the year and performed journal entry testing using audit data analytical tools in order to address the residual risk of management override.

Based on our audit procedures, we did not identify any material misstatements arising from the carrying value of goodwill recognised in the financial statements.

Our application of materiality We apply the concept of materiality in planning and performing our audit, in evaluating the effect of any identified misstatements and in forming our opinion. Our overall objective as auditor is to obtain reasonable assurance that the financial statements as a whole are free from material misstatement where it could reasonably be expected to influence the economic decisions of the users of the financial statements.

Based on our professional judgement and taking into account the possible metrics used by investors and other readers of the accounts, we have determined an overall Group materiality of £476,000 (2024: £470,000) and a parent company materiality of £137,000 (2024: £107,000). Group materiality is based on 1.5% (2024: 1.5%) of consolidated revenues for the year ended 31 December 2025. Parent company materiality is based on 2% (2024: 2%) of gross assets for 2025.

Performance materiality was set at £357,000 (2024: £353,000) for the Group, representing 75% (2024: 75%) of overall Group materiality. Performance materiality for the parent company was set at £103,000 (2024: £80,000) representing 75% (2024: 75%) of overall parent company materiality. We agreed with the Audit Committee to report all individual audit differences in excess of £24,000 (2024: £23,0000), being 5% (2024: 5%) of Group materiality, which is also applicable to the parent company, as well as any other identified misstatements that warranted reporting on qualitative grounds.

Independent Auditor's Report

to the members of CEPS PLC continued

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Group and the parent company's ability to continue to adopt the going concern basis of accounting included:

• Obtaining management's going concern assessment, confirming that it covers an appropriate period of at least 12 months from the date of approval of the Annual Report 2025 and financial statements, checking its mathematical accuracy and agreeing information within to supporting documentation;

• Reviewing and critically assessing the appropriateness of the underlying assumptions in management's model, such as growth forecasts, based upon available evidence and the sensitivity of the outcome of the forecast to those assumptions;

• Performing sensitivity analysis on the model to confirm that the Group has sufficient resilience to withstand reasonably possible events such as a downturn in trading across Group subsidiaries;

• Reviewing compliance with loan covenants in the year and expected future compliance;

• Reconciling the opening forecast position to the actual cash at bank;

• Considering the impact of post balance sheet events, in particular the disposal of ICA Group Limited, on the Group's trading position and liquidity, including the additional cash generated from the sale;

• Considering how the ongoing impact of the current economic environment has been factored into the forecasts including potential mitigating actions that could be taken to reduce the impact and the timing of such actions and assessing the likelihood that management would be able to successfully implement the mitigating actions; and

• Assessing the disclosures in the financial statements, including the accounting policy which describes the going concern basis of accounting, to ensure accurate reflection of the basis for which the Group is a going concern.

  Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent company's ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.

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

  Other information The other information comprises the information included in the Annual Report 2025, other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

  Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

  We have nothing to report in this regard.

  Independent Auditor's Report

  to the members of CEPS PLC continued

  Opinions on other matters prescribed by the Companies Act 2006

  Matters on which we are required to report by exception

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

• the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

  In the light of the knowledge and understanding of the Group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

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

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

• the parent company 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.

Responsibilities of directors As explained more fully in the Statement of directors' responsibilities set out on page 12, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless the directors either intend to liquidate the Group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the Group and parent company's financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the Group and parent company by discussions with directors and by updating our understanding of the sectors in which the Group and parent company operate.

Independent Auditor's Report

to the members of CEPS PLC continued

Auditor's responsibilities for the audit of the financial statements continued

Laws and regulations of direct significance in the context of the Group and parent company include The Companies Act 2006, the AIM Rules for Companies and UK Tax legislation.

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items, including a review of Group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of noncompliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner's review included ensuring that the team had approached their work with appropriate professional scepticism and, thus, the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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

Use of our report This report is made solely to the parent 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 parent 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jamie Lane (Senior Statutory Auditor)

for and on behalf of Saffery LLP Statutory Auditors

Midland House, 2 Poole Road, Bournemouth BH2 5QY

11 May 2026

The notes on pages 38 to 84 form part of the financial statements.

The notes on pages 38 to 84 form part of the financial statements.

Consolidated and Company Statements of Financial Position

Company number 00507461

Assets

Equity Capital and reserves attributable to owners of the parent

Called up share capital 28

Retained earnings

Non-controlling interests in equity

Total equity

Consolidated and Company Statements of Financial Position

continued

Liabilities

Group Company

2025 2024 2025 2024

Notes £'000 £'000) £'000 £'000)

The total comprehensive income within the parent company financial statements for the year was a loss of £1,047,000 (2024: profit of £1,901,000).

The notes on pages 38 to 84 form part of the financial statements.

The financial statements on pages 30 to 84 were approved by the Board of Directors on 11 May 2026 and signed on its behalf by

D A Horner

Director

Major non-cash movements: there were £444,000 of non-cash additions to right-of-use assets and lease liabilities in the year (2024: £293,000 of non-cash additions to right-of-use assets and lease liabilities). In connection with the restructuring of the Signature Fabrics group of companies, £1,068,000 of loans were assumed by the minority shareholders in the prior year 2024.

The notes on pages 38 to 84 form part of the financial statements.

continued

The notes on pages 38 to 84 form part of the financial statements.

Consolidated and Company Statements of Changes in Equity

Group

Attributable)

Share capital comprises the nominal value of shares subscribed for.

Share premium represents the amount above nominal value received for shares issued, less transaction costs.

Retained earnings comprise accumulated comprehensive income for the current year and prior periods attributable to the parent, less dividends paid.

Non-controlling interest represents the element of retained earnings which is not attributable to the owners of the parent.

The notes on pages 38 to 84 form part of the financial statements.

Consolidated and Company Statements of Changes in Equity

continued

Company

The notes on pages 38 to 84 form part of the financial statements.

Notes to the Financial Statements

1. Accounting policies CEPS PLC (the 'Company') is a company incorporated and domiciled in England and Wales. The Company is a public company limited by shares, which is listed on the AIM market of the London Stock Exchange. The address of the registered office is 11 Laura Place, Bath BA2 4BL.

The principal activities of the Company are that of a holding company for service and manufacturing companies, acquiring stakes in stable, profitable and steadily growing entrepreneurial companies. The activities of the Company's trading subsidiaries are described in note 19. Segmental analysis is given in note 4.

The financial statements are presented in British Pounds Sterling (£), the currency of the primary economic environment in which the Group's activities are operated and are reported in £'000. The Group comprises CEPS PLC and its subsidiary companies as set out in note 19. The financial statements are to the year ended 31 December 2025.

The registered number of the Company is 00507461.

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied throughout the year, unless otherwise stated.

Basis of preparation

These financial statements have been prepared on a going concern basis under the historical cost convention in accordance with UK-adopted International Accounting Standards ('UK-adopted IAS'), IFRIC interpretations and the Companies Act 2006 as applicable to companies reporting under UK-adopted IAS.

The Group's business activities and financial position likely to affect its future development, performance and position are set out in the front end of the report.

The preparation of financial statements in conformity with UK-adopted IAS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3.

The Company has taken advantage of the exemption under the Companies Act 2006 not to present its own Statement of Comprehensive Income. Information about the Company result for the year is shown under the statement of financial position.

Standards and interpretations

The Group has not adopted any new standards, or new provisions of amended standards, in these financial statements. Amendments which became effective in the year were not applicable to the Group.

Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for accounting periods beginning on or after 1 January 2026 and which the Group has chosen not to adopt early. These include the following standards which may be relevant to the Group:

Amendments to IFRS 9 and IFRS 7 mandatory for periods commencing 1 January 2026 -Amendments to the Classification and Measurement of Financial Instruments made to address diversity in accounting practice by clarifying requirements in two specific areas:

• classification of financial assets with environmental, social and corporate governance (ESG) and similar features; and

• timing of derecognition of financial liabilities settled through electronic payment systems.

Notes to the Financial Statements continued

1. Accounting policies

   continued

   IFRS 18 Presentation and Disclosure in Financial Statements mandatory for periods commencing 1 January 2027. IFRS 18 introduces three key new requirements:

   • specified categories and defined subtotals in the statement of profit or loss;

   • improved principles for aggregation and disaggregation of information; and

   • disclosures about management-defined performance measures.

As a result of initial review of the new standards, interpretations and amendments which are not yet effective in these financial statements, none is expected to have a material effect on the Company's or Group's future financial statements.

Going concern

The directors have considered the going concern basis of the Company and of the Group for a period of 12 months from the reporting date utilising detailed forecasts of the trading performance and the financial position to the end of 2027. The Aford Awards and Signature Fabrics Group sub-groups service their bank and shareholder held debt from cash generated in the trading subsidiaries which continued to trade at a level sufficient to meet the interest cash flows. Whilst the continuing group incurred a loss for the year, the sale of the ICA group in March 2026 resulted in net cash inflow of over £13m allowing

£5m of debt to be repaid and providing the resources to invest in the growth of the continuing operations.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries (the 'Group').

The financial statements of the subsidiaries are prepared for the same reporting year as the parent company using consistent accounting policies. Control is achieved where the Group is exposed, or has rights, to variable returns from its involvement with the investee entity and has the ability to affect these returns through its power over the investee. Control is lost when the Group no longer has rights to variable returns from its involvement with an investee entity and no longer has the ability to affect those returns as it no longer has power over the investee. When control is lost the subsidiaries are de-recognised and no longer consolidated.

The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration agreement. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition by acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the Consolidated Statement of Comprehensive Income.

Entities in which the Group has a participating interest and over whose operating and financial policies the Group exercises significant influence are treated as associates. Associates are accounted for using the equity method and subject to impairment.