Statement of Cash Flows

Year ended 31 December 2025

Cash and cash equivalents comprise cash at bank and in hand. The notes are an integral part of these financial statements.

Notes to the Financial Statements

Year ended 31 December 2025

1. General information

Helios Underwriting plc (the "Company") is an investment company, organised under the laws of the United Kingdom. The Company is quoted on AIM and was incorporated in England, domiciled in the UK. The Company's registered office is 1st Floor, 33 Cornhill, London EC3V 3ND. The principal purpose of the Company

is to provide investors with exposure to the Lloyd's insurance market through an actively managed portfolio of syndicates, who participates in insurance business as an underwriting member of Lloyd's, which are fully owned undertakings of the Company. The Company prepares separate Financial Statements as its only Financial Statements, and its subsidiaries are not consolidated in line with IFRS 10. See Note 3 below.

The Company has aggregated its investments in similar entities in line with IFRS 12.

2. Material accounting policies

The material accounting policies adopted in the preparation of the Financial Statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1  Basis of preparation

The Financial Statements have been prepared in accordance with UK adopted International Accounting Standards ("IAS") and interpretations issued by the IFRS Interpretations Committee ("IFRIC") as adopted by the UK IAS, and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The Financial Statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and financial liabilities at fair value through profit or loss. They are presented in pounds sterling, the functional currency of the Company, and rounded to the nearest thousand pounds (£'000), except where otherwise indicated.

2.2   Going concern

The Company has net assets at the end of the reporting period of £180.3m. The Company's subsidiaries participate as underwriting members at Lloyd's on the 2023, 2024 and 2025 years of account, as well as any prior run-off years.

The Directors have a reasonable expectation that the Company has adequate resources to meet its underwriting and other operational obligations for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing the annual Financial Statements.

2.3   Changes in accounting policies and disclosures

2.3.1   New and amended standards adopted by the group

The following amendments to standards are mandatory for the first time for the financial year beginning 1 January 2025 but do not have any material impact on the Company:

•   Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rate: Lack of Exchangeability'.

2.3.2    New standards and interpretations not yet adopted

Certain new accounting standards and amendments to accounting standards have been published that are not mandatory for 31 December 2025 reporting periods and have not been early adopted by the Company. The assessment of the impact of these new standards and amendments is set out below:

2.3.3   Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS7

These amendments:

•   clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system;

•   clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion;

•   add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and

•   update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI).

Helios Underwriting Plc does not expect these amendments to have a material impact on recognition and measurement; however, additional disclosures may be required depending on the nature of investment instruments held.

2.3.4   Annual Improvements to IFRS - Volume 11 (effective 1 January 2026):

Issued in July 2024, Annual improvements are limited to changes that either clarify the wording in an Accounting Standard or correct relatively minor unintended consequences, oversights or conflicts between the requirements in the Accounting Standards. These amendments are to the following standards:

•   IFRS 1 First-time Adoption of International Financial Reporting Standards.

•   IFRS 7 Financial Instruments: Disclosures and its accompanying Guidance on implementing IFRS 7.

•   IFRS 9 Financial Instruments.

•   IFRS 10 Consolidated Financial Statements; and

•   IAS 7 Statement of Cash Flows.

The Company does not expect these amendments to have a material impact.

IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after 1 January 2027)

2.3.5   IFRS 18 will replace IAS 1 Presentation of Financial Statements

Introducing new requirements aimed at improving comparability and transparency of financial information. While IFRS 18 does not change recognition or measurement principles, it is expected to affect the presentation and disclosure of items within the financial statements, particularly in relation to the statement of financial performance and the introduction of management-defined performance measures.

Management of Helios Underwriting plc, as an investment entity, is currently assessing the detailed implications of adopting IFRS 18 on the financial statements. Based on a preliminary assessment, the following impacts have been identified:

•   Although the adoption of IFRS 18 is not expected to affect the Company's net profit, the revised structure of the statement of profit or loss may affect how performance is presented. As an investment entity, Helios primarily measures and presents its investments at fair value through profit or loss. Consequently, income and fair value gains/losses currently presented within a single line item may require further disaggregation under IFRS 18 categories, which could alter the presentation of operating results without changing the underlying performance.

•   IFRS 18 introduces specific guidance for classifying income and expenses, including those arising from derivatives and financial instruments. Given Helios Underwriting plc's investment-focused business model, where derivative positions and investment gains form a core component of returns, there may be reclassification of such items within the statement of profit or loss. Management is evaluating whether any changes to current presentation will be required to align with the new operating, investing, and financing categories.

•   The introduction of enhanced transparency around management-defined performance measures may impact how Helios presents alternative performance metrics used internally to assess investment performance. Additional disclosures and reconciliations will be required for any such measures presented externally.

•   The Group does not anticipate significant changes to the volume of disclosures overall; however, the structure and granularity of disclosures may change. New requirements will include:

- further disaggregation of operating expenses, where applicable;

- enhanced disclosures around investment income and fair value movements; and

- reconciliations between previously reported line items under IAS 1 and those presented under IFRS 18 on initial adoption.

•   From a cash flow statement perspective, changes in classification may arise. Interest received on investment assets will likely continue to be presented within investing cash flows, reflecting the nature of the activities as an investment entity. Interest paid, where applicable, will be presented within financing cash flows, in line with IFRS 18 requirements.

Helios Underwriting plc will apply IFRS 18 from its mandatory effective date of 1 January 2027. Comparative information for the year ending 31 December 2026 will be restated in accordance with the new standard.

2.4   Foreign currency translation

Functional currency

Items included in the Financial Statements are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The Financial Statements are presented in thousands of pounds sterling, which is the Company's functional and presentational currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

Transactions and balances

Foreign currency transactions are translated into the functional currency using annual average rates of exchange prevailing at the time of the transaction as a proxy for the transactional rates. Monetary items are translated at period-end rates; any exchange differences arising from the change in rates of exchange are recognised in the statement of income of the year.

2.5   Financial assets

Classification

The classification of financial assets on initial recognition depends on both the Company's business model for managing the financial assets and the asset's contractual cash flow characteristics. The Company may irrevocably designate a financial asset as

measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as an "accounting mismatch") that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.

Initial recognition and measurement

Financial assets are recognised when the Company becomes a party to the contractual provisions of the instruments. Regular purchases and sales of financial assets are recognised on the trade date, being the date on which the Company commits to the purchase or sale of the asset.

Equity investments at fair value through profit or loss

The Company measures all equity instruments at fair value with changes in the fair value recognised in the statement of income.

Due from related parties

Amounts due from related parties are designated at fair value through profit or loss upon initial recognition because they are managed, and their performance is evaluated, on a fair value basis in accordance with the Company's documented investment strategy.

Derecognition

Financial assets are derecognised when the right to receive cash flows from the financial assets has expired or is transferred and the Company has transferred substantially all its risks and rewards of ownership.

Fair value estimation

The fair value of financial assets at fair value through profit or loss which are traded in active markets is based on quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regular occurring market transactions on an arm's length basis. The quoted market price used for financial assets at fair value through profit or loss held by the Company is the current bid price.

The fair value of financial assets at fair value through profit or loss that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates, see note 5.

Unrealised gains and losses arising from changes in the fair value of the financial assets at fair value through profit or loss are presented in the statement of income.

2.6   Cash and cash equivalents

Cash represents cash deposits held at financial institutions. Cash equivalents include short-term highly liquid investments of sufficient credit quality that are readily convertible to known amounts of cash and have original maturities of three months or less. Cash equivalents are held for meeting short-term liquidity requirements, rather than for investment purposes. Cash and cash equivalents are held at major financial institutions.

2.7   Borrowings

Borrowings are initially recognised at fair value and subsequently measured at amortised cost using the net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent that there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid is recognised in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

2.8   Other payables

These present liabilities for services provided to the Company prior to the end of the financial year which are unpaid. These are classified as current liabilities, unless payment is not due within 12 months after the reporting date.

2.9 Interest and dividend income

The investment income of the Company is based on the income earned on the securities, less expenses incurred. Therefore, the Company's investment income may be expected to fluctuate in response to changes in such expenses or income.

Dividends, gross of foreign withholding taxes, where applicable, are included as income when the security is declared ex-dividend. Bank interest is accounted for on an effective yield basis.

2.10   Net gains on financial assets at FVTPL

Realised gains or losses on disposal of investments during the period and unrealised gains and losses on valuation of investments held at the period end are dealt with in the statement of income.

2.11   Operating expenses

All expenses are accounted for on an accruals basis.

2.12   Current and deferred tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the statement of income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case tax is also recognised in other comprehensive income or directly in equity, respectively.

Current tax

The current income tax charge is calculated on the basis of the tax laws of the UK enacted at the balance sheet date. Management establishes provisions when appropriate, on the basis of amounts expected to be paid to the tax authorities.

Deferred tax

Deferred tax is provided in full, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the

related deferred income tax asset is realised, or the deferred income tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

2.13   Share capital and share premium

Ordinary shares are classified as equity. The difference between the fair value of the consideration received and the nominal value of the share capital issued is taken to the share premium account. Incremental costs directly attributable to the issue of shares or options are shown in equity as a deduction, net of tax, from proceeds. Where the Company buys back its own

ordinary shares on the market, and these are held in treasury, the purchase is made out of distributable profits and hence shown as a deduction from the Company's retained earnings.

Dividend and distribution policy

Dividend distribution to the Company's shareholders is recognised in the Financial Statements in the period in which the dividends are approved by the Company's shareholders.

2.14   Share options

The new ordinary shares have been issued into the respective joint beneficial ownership of (i) each of the participating Executive Directors as shown in Note 14 and (ii) the Trustee of JTC Employee Solutions Limited (the "Trust") and are subject to the terms of joint ownership agreements ("JOAs") respectively entered into between the Director, the Company and the Trustee. The nominal value of the new ordinary shares has been paid by the Trust out of funds advanced to it by the Company with the additional consideration of 145p left outstanding until such time as new ordinary shares are sold. The Company has waived its lien on the shares such that there are no restrictions on their transfer.

The terms of the JOAs provide, inter alia, that if jointly owned shares become vested and are sold, the proceeds of sale will be divided between the joint owners so that the participating Director receives an amount equal to the amount initially provided by the participating Director plus any growth in the market value of the jointly owned ordinary shares above a target share price (so that the participating Director will only ever receive value if the share sale price exceeds this).

The percentage of jointly owned shares that vest shall be dependent on the average growth in net tangible asset value per share during the three financial years ending 31 December 2024. The vesting percentage shall be determined on the average growth in net tangible asset value per share. If the average growth in net tangible asset value does not exceed 5%, then no awards vest, and if the average growth in net tangible asset value exceeds 20% or above, then 100% of the awards vest.

The Plan was established and approved by resolution of the Remuneration Committee of the Company on 13 December 2017 and provides for the acquisition by employees, including Executive Directors, of beneficial interests as joint owners (with the Trust) of ordinary shares in the Company upon the terms of a JOA. The terms of the JOA provide that if the jointly owned shares become vested and are sold, the proceeds of sale will be divided between the joint owners on the terms set out above.

2.15   Share based payment

The Company operates an equity settled share-based employee compensation plan. This includes the Long-Term Incentive Plan ("LTIP"). Awards under the LTIP are granted in the form of a nil-cost option (see Note 14).

The awards' performance conditions set threshold (30%) to stretch (60%) targets in respect of the Company's total shareholder return ("TSR") over the three-year period following the grant of the awards. No portion of the awards shall vest unless the Company's TSR at the end of the performance period reaches the threshold target, for which one quarter of the awards would vest, rising on a straight-line basis to full vesting of the awards for the Company's TSR over the performance period being equal to the stretch target or better.

In 2025, the company granted 584,020 awards under the LTIP in the form of nil-cost options. The vesting period for the awards is three years subject to continued service and the achievement of specific performance conditions. If the options remain unexercised after a period of ten years from the date of grant, the options expire. In the case of Executive Directors, any vested shares will be subject to a two-year holding period.

The fair value of the LTIP awards is calculated using a Monte Carlo (Stochastic) model considering the terms and conditions of the awards granted.

No options were exercised during the year.

3. Significant accounting judgements, estimates and assumptions

In applying the Company's accounting policies, the Directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. These judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made and are based on historical experience and other factors that are considered to be applicable.

Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

Assessment as an investment entity

Entities that meet the definition of an investment entity within IFRS 10 "Consolidated Financial Statements" ("IFRS 10") are required to account for their investments in controlled entities at fair value through profit or loss. The criteria which define an investment entity are currently as follows:

•      an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services

•      an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both

•      an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis

Helios provides its investors with investment management services such as syndicate research, advice on syndicate selections and portfolio curations. The Company's core business purpose is to participate in a portfolio of syndicates via its investment

in Limited Liability Vehicles ("LLVs") for the purpose of returns in the form of investment income (dividends) and capital appreciation (increase in the NAV per share resulting in increased share price).

The Company records substantially all of its investments at fair value through profit and loss ("FVTPL").

An investment in a Lloyd's syndicate year of account has a fixed duration of three years, and a new year of account opens every year. As such, the funds invested by Helios in a particular syndicate and year of account are returned after three years, at which point Helios can decide whether to invest in a new year of account in the same syndicate, reinvest elsewhere or distribute the returns to shareholders. The finite life of each investment in a Lloyd's syndicate therefore provides a natural exit strategy.

The Board has also concluded that the Company meets the additional characteristics of an investment entity, in that it has more than one investment; the investments are in the form of equities; it has more than one investor; and the majority of its investors are not related parties.

Equity investments at FVTPL

The fair value of equity investments that are not traded in an active market is determined using an internally developed valuations model. Assumptions used in this model are validated and reviewed periodically internally by qualified personnel. Changes in assumptions used can affect the reported fair value of the equity investments. The impact on the profit and loss and equity as a result of changes in key assumptions is disclosed in Note 5.

4. Risk management

4.1  Risk management framework

A review of the Company's objectives, policies and processes for managing and monitoring risks is set out in the Risk Management section of the Company's Strategic Report page 24.

Whilst risk is inherent in the Company's operations, it is managed through an integrated risk management framework, including ongoing identification, measurement and monitoring subject to risk limits and other controls. This process of risk identification is critical to the Company's continuing profitability and each individual within the Company is accountable for the risk exposures relating to his or her responsibilities.

The Company is exposed to market risks, liquidity risks, interest rate risks, credit risks, operational risks and concentration risks.

The Board of Directors is responsible for the overall risk management approach and for approving the risk management strategies and principles.

4.2   Market risk

Market risk is the risk that the fair values or future cash flows of a financial instrument will fluctuate because of changes in market variables such as interest rates, exchange risks and equity prices.

The Company's assets consist primarily of equity investments, which are a portfolio of syndicates that participate in insurance business as an underwriting member of Lloyd's. The values of the investments are determined by market forces and there is, accordingly, a risk that market prices can change in a way that is adverse to the Company's performance.

4.2.1   Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Longer-term obligations are usually more sensitive to interest rate changes.

The Company's interest-bearing financial assets and liabilities expose it to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. Any excess cash and cash equivalents are invested at short-term market interest rates. Exposure is managed largely by the use of Economic hedges that arise by matching interest sensitive assets with liabilities of similar nature.

The table in note 4.4 Liquidity risk summarises the Company's exposure to interest rate risks on financial assets and liabilities. The Company's assets and liabilities are included at carrying amount and categorised by the earlier of contractual repricing or maturity dates.

Interest rate risk sensitivity

The company has assessed the impact of a 100 bps increase or decrease in interest rates might have on the assets and liabilities of the Company. As the company's borrowings are on a fixed term basis and related party asset are repayable and non-interest bearing. The overall interest rate risk has been assessed as immaterial.

4.2.2    Currency risk

Currency risk is the risk which arises due to the assets and liabilities of the Company held in foreign currencies, which will be affected by fluctuations in foreign exchange rates.

The Company holds assets denominated in currencies other than pounds sterling, the functional currency. The table below analyses the Company's exposure to currency risk: