Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-3120000300008100001334000011610000.235A D Schuessler2024-11-042023-01-01false002023-12-31099118650.19 09911865 2023-12-31 09911865 2023-01-01 2023-12-31 09911865 2022-01-01 2022-12-31 09911865 2022-12-31 09911865 2022-01-01 09911865 c:CompanySecretary1 2023-01-01 2023-12-31 09911865 c:Director1 2023-01-01 2023-12-31 09911865 c:Director2 2023-01-01 2023-12-31 09911865 c:Director2 2023-12-31 09911865 c:Director3 2023-01-01 2023-12-31 09911865 c:RegisteredOffice 2023-01-01 2023-12-31 09911865 d:CurrentFinancialInstruments 2023-12-31 09911865 d:CurrentFinancialInstruments 2022-12-31 09911865 d:ShareCapital 2023-01-01 2023-12-31 09911865 d:ShareCapital 2023-12-31 09911865 d:ShareCapital 2022-01-01 2022-12-31 09911865 d:ShareCapital 2022-12-31 09911865 d:ShareCapital 2022-01-01 09911865 d:ForeignCurrencyTranslationReserve 2023-01-01 2023-12-31 09911865 d:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 09911865 d:RetainedEarningsAccumulatedLosses 2023-12-31 09911865 d:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 09911865 d:RetainedEarningsAccumulatedLosses 2022-12-31 09911865 c:OrdinaryShareClass1 2023-01-01 2023-12-31 09911865 c:OrdinaryShareClass1 2023-12-31 09911865 c:OrdinaryShareClass1 2022-12-31 09911865 c:FullIFRS 2023-01-01 2023-12-31 09911865 c:Audited 2023-01-01 2023-12-31 09911865 c:FullAccounts 2023-01-01 2023-12-31 09911865 c:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 09911865 17 2023-01-01 2023-12-31 09911865 18 2023-01-01 2023-12-31 09911865 9 2023-01-01 2023-12-31 09911865 33 2023-01-01 2023-12-31 iso4217:GBP xbrli:pure xbrli:shares

Registered number: 09911865









BURNS & MCDONNELL ENTERPRISES LIMITED









FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
COMPANY INFORMATION


 
Directors
M W Brown 
A D Schuessler 




Company secretary
Mr C A Baxter
Corporation Service Company (UK) Limited



Registered number
09911865



Registered office
C/O Corporation Service Company (UK) Limited
10th Floor

5 Churchill Place

London

E14 5HU




Independent auditors
PKF Smith Cooper Audit Limited
Statutory Auditors

Cornerblock

2 Cornwall Street

Birmingham

B3 2DX




Page 1

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
CONTENTS



Page
Group strategic report
 
3 - 4
Directors' report
 
5 - 7
Independent auditors' report
 
8 - 11
Consolidated statement of profit or loss
 
12
Consolidated statement of other comprehensive income
 
13
Consolidated statement of financial position
 
14 - 15
Company statement of financial position
 
16 - 17
Consolidated statement of changes in equity
 
18
Company statement of changes in equity
 
19
Consolidated statement of cash flows
 
20
Notes to the consolidated financial statements
 
21 - 48
Page 2

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The Directors present their strategic report for the year ended 31 December 2023. 
Review of the business
Burns & McDonnell Enterprises Limited is a holding company in the UK and is a subsidiary of Burns & McDonnell Inc. The subsidiaries of Burns & McDonnell Enterprises Limited (collectively, "the Group") provide full-service advisory, engineering and construction services to industry and government, across a range of sectors including Transmission and Distribution, Energy and Global Facilities. These services are provided to third-party clients as well as other affiliated companies within the Burns & McDonnell family of companies where another entity may act as the prime contractor.
The Group owned Company in the UK provides these services primarily in the transmission and distribution, energy, and global facilities sectors. The Company will also undertake projects in other sectors when there is a clear strategic link to long-term business goals and the Company has competencies to perform such services. The Company continues to execute these services including engineering, procurement, and construction (EPC) projects. Certain EPC projects incurred additional costs driving increased losses in 2023. The additional costs were due to cost escalation, project delays, and scope changes.  The Company has continued to see similar project impacts in 2024 on these EPC projects.  The Company continues to get support from their US parent company as they execute certain EPC projects. 
The Group owned companies in Mexico are focused on serving Transmission and Distribution, Energy and Global Facilities markets by providing full-service advisory, engineering and construction services to clients. The Group will also undertake projects in other sectors where approached by existing clients or there is a clear strategic link to long-term business goals and the Group has competencies to provide such services. The Group continued executing engineering and advisory contracts during the year and building up engineering staff.
The Group owned company in Philippines focused on building the Burns & McDonnell brand in country, with a focus on service in the Energy market. The long-term service offering will include full-service advisory, engineering and construction services.
The consolidated statement of profit or loss is set out on page 12 and shows a loss before tax of $14.9 million (
2022 - $6.2 million) with revenue of $44.3 million (2022 - $31.1 million) for the year ended 31 December 2023. Total net liabilities at the year-end amounted to $36.4 million (2022 - $16.5 million). Revenue growth for the year was driven by contract execution resulting from continued business development efforts. The loss before tax increased due to continued growth in the building up of execution staff, as well as investment in the business through client relationship and business development efforts.
Principal risks and uncertainties
Being a holding company, the principal risks and uncertainties are the impacts of potential economic and socioeconomic changes. These changes may impact the overall ability of its subsidiaries to develop business and carry out successful operations within their respective markets. These risks are monitored by Group management in conjunction with the Directors as part of broader Group risk management activities.
 
The UK market risks primarily relate to cost escalation geopolitical, foreign exchange rates, and labor productivity. At this stage of the business the primary risks and uncertainties are around cost escalation and labor productivity as the Company continues executing EPC projects. 
Contractual delivery risk arises from contracts with customers and varies depending on the nature of the work undertaken. The primary risks include failure to deliver to schedules and design specification. These risks are actively managed by project management and regular project reviews.
Development of local leadership, continuing to establish business systems and capabilities, particularly around
Page 3

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

executing EPC projects to allow the business to grow and execute projects successfully. The US Parent will continue to support the business from other parts of the global business which have existing controls and processes and will be deployed locally to ensure appropriate governance and oversight of the business.
Credit risk arises from cash and cash equivalents and deposits with banks, as well as credit exposure to customers, primarily outstanding receivables. Credit risk with customers is managed through credit checks and credit rating reviews with new and existing customers, respectively.
The UK Government has committed to a net-zero future which will require our clients to make investments in new infrastructure to meet the new lower carbon future. This will also place expectations on businesses to respond with their own commitments and to find new lower carbon ways of executing projects.

The Mexico market risks primarily relate to uncertainty surrounding the regulatory environment of the energy markets. Recent political developments have impacted the ability for private investors to operate within these markets. As a result, the local business is assessing the impact on ongoing business development efforts. At this stage of business, the Group's primary risks and uncertainties are around continued development of local leadership, continuing to establish business systems and capabilities as well as developing client relationships. The Directors will continue to support the business from other parts of the global business which have existing controls and processes and will be deployed locally to ensure appropriate governance and oversight of the business.


This report was approved by the board on 4 November 2024 and signed on its behalf.



A D Schuessler
Director

Page 4

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors present their report and the financial statements for the year ended 31 December 2023.

Objectives of the business, principal activity, and future direction

As a holding company, one of the key objectives of the Company and its subsidiaries is to expand the Group's position across the globe. The principal activity of the Group is the provision of advisory, engineering and construction services. The Group is currently pursuing opportunities to provide full EPC (Engineer, Procure, Construct) services within the Group's chosen markets in partnership with other entities within the Burns & McDonnell family of companies.
The Directors remain positive about the long-term growth potential for the Group across relevant infrastructure markets. Within the UK, this is supported by Government commitment to infrastructure projects as evidenced within the National Infrastructure Commission reports and the RIIO regulatory regime for Investor Owned Utilities, and demand for mission critical projects within the global facilities market in the UK and around the globe. Within Mexico, the Energy market is primarily managed by CFE, the state-owned electric utility, with whom the Group is actively pursuing projects. The Philippines business is at an early stage of commercial development, pursuing opportunities in the Group's target markets as they arise. The Directors continue to see opportunities within this market and will continue to rely on the Group representatives in the country to grow the business. The global Burns & McDonnell business will continue to support the growth and development of the Group's businesses through financial support, training, counsel and allocation of personnel.
As part of a global business that has been established for nearly 120 years with offices across the globe, the Directors see the growth in target markets as a long-term endeavour, seeking steady and stable growth opportunities to add value to clients. 

Directors' responsibilities statement

The Directors are responsible for preparing the Group strategic report, Directors' report and the consolidated financial statements, in accordance with applicable law.

Company law requires the Directors to prepare consolidated financial statements for each financial year. Under that law they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

Under company law the Directors must not approve the consolidated 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 the consolidated financial statements, the Directors are required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;

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

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

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general
Page 5

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to $18,859,000  (2022 - loss $4,988,000).

The directors did not recommend payment of a dividend for the year (2022 - $nil).

Directors

The Directors who served during the year were:

M W Brown 
R J Kowalik (resigned 31 December 2023)
A D Schuessler 

Going concern

The Burns & McDonnell Enterprises Limited Group has net liabilities at 31 December 2023 amounting to $36.4 million (2022 - $16.5million). The Directors have received the parent Company's commitment in writing to provide adequate financial support to the Group, if required, for a period of at least 12 months from the approval date of the statement of financial position to enable it to meet its liabilities as and when they fall due, which at 31 December 2023 included $45.2million due to its parent group in the US. As noted in note 22, since the year end, the Group, has incurred further costs on contracts in progress amounting to $17.9million. These costs have been funded by further loans from the Group's US parent group.
The Group's US parent group is confident, based on its review of projected revenues and cash-flows, including taking into account the application of downside sensitivities, that it has adequate resources to continue operations and provide financial support to Burns & McDonnell Enterprises Limited for a period of at least 12 months from the approval date of the statement of financial position.
Based on the confirmation of support received from the US parent group, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for a period of at least 12 months from the approval date of the statement of financial position. Accordingly, the Directors have prepared the accounts under the going concern basis which they consider to the appropriate.

Disclosure of information to auditors

Each of the persons who are Directors at the time when this Directors' report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Page 6

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Post year end events

Subsequent to the end of the reporting period on December 31, 2023, the Group owned UK Company identified additional project costs related to certain customer contracts. These forecasted costs are primarily due to project delays, cost escalations, and changes in scope that arose after the reporting period.
The Directors have considered the impact of these post-reporting period losses and, while significant, they do not affect the group's ability to continue as a going concern. Appropriate measures are being taken to manage the situation in the next financial period (see note 22 to these financial statements).

Auditors

The auditorsPKF Smith Cooper Audit Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 4 November 2024 and signed on its behalf.
 



A D Schuessler
Director
Page 7

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BURNS & MCDONNELL ENTERPRISES LIMITED
 

Opinion


We have audited the financial statements of Burns & McDonnell Enterprises Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the Consolidated statement of profit or lossthe Consolidated statement of comprehensive incomethe Consolidated statement of financial position, the Company Statement of financial positionthe Consolidated statement of cash flowsthe Consolidated statement of changes in equity, the Company Statement of changes in equity and the related notes, including a summary of significant accounting policies set out on pages 21 - 30. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.

In our opinion:

the financial statements give a true and fair view of the state of the Group's and the parent Company's affairs as at 31 December 2023 and of the Group's loss for the year then ended;

the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the United Kingdomand

the financial statements 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 auditors' 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 United Kingdom, including the Financial Reporting Council's Ethical Standard 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.

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.

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 twelve 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.

Page 8

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BURNS & MCDONNELL ENTERPRISES LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual report, other than the financial statements and our auditors' report thereon.  The directors are responsible for the other information contained within the Annual reportOur 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.

Opinion on other matters prescribed by the Companies Act 2006


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

the information given in the Group 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 Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 Directors' responsibilities statement on page 5, 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's 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.

Page 9

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BURNS & MCDONNELL ENTERPRISES LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

Based on our understanding of the Group and the industry, key laws and regulations that we identified included:

Companies Act;
International Financial Reporting Standards;
Tax legislation;
Health and safety legislation; and
Employment legislation.
 
We identified that the principal risk of fraud or non-compliance with laws and regulations related to:
 
management bias in respect of accounting estimates and judgements made;
management override of control; and
posting of unusual journals or transactions.
 
We focused on those areas that could give rise to a material misstatement in the Group and Company's financial statements.
Our procedures included, but were not limited to:
 
Enquiry of management and those charged with governance around actual and potential litigation and          claims, including instances of non-compliance with laws and regulations and fraud;
Reviewing legal expenditure in the year to identify instances of non-compliance with laws and regulations and fraud;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and
Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias. In particular, revenue recognition on long-term contracts, lease incremental borrowing rates and the assessment of whether to recognise a deferred tax asset.
 
It is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.




Page 10

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BURNS & MCDONNELL ENTERPRISES LIMITED (CONTINUED)


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.




 
 
Stephen Newman (Senior statutory auditor)
  
for and on behalf of
PKF Smith Cooper Audit Limited
 
Statutory Auditors
  
Cornerblock
2 Cornwall Street
Birmingham
B3 2DX

2 December 2024
Page 11

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022
Note
$000
$000

  

Revenue
 4 
44,253
31,125

Cost of sales
  
(47,629)
(27,167)

Gross (loss)/profit
  
(3,376)
3,958

  

Administrative expenses
 5 
(11,529)
(10,195)

  

Loss before tax
 6 
(14,905)
(6,237)

  

Tax (expense)/credit
 9 
(3,954)
1,249

Loss for the year
  
(18,859)
(4,988)

Loss for the year attributable to:
  

Owners of the parent
  
(18,859)
(4,988)

  
(18,859)
(4,988)

The notes on pages 21 to 48 form part of these financial statements.

Page 12

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022
$000
$000

Loss for the year

  
(18,859)
(4,988)

Exchange (loss)/gains arising on translation of foreign operations
  
(1,000)
1,388

Other comprehensive income for the year, net of tax
  
(1,000)
1,388

Total comprehensive income
  
(19,859)
(3,600)

Total comprehensive income attributable to:
  

Owners of the parent
  
(19,859)
(3,600)

  
(19,859)
(3,600)


The notes on pages 21 to 48 form part of these financial statements.

Page 13

 
BURNS & MCDONNELL ENTERPRISES LIMITED
REGISTERED NUMBER: 09911865
 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023


2023
2022
Note
$000
$000


Assets

Non-current assets
  

Tangible fixed assets
 10 
1,178
1,183

Intangible fixed assets
  
-
-

Right of use asset
 11 
1,004
1,540

Deferred tax
 9 
-
3,721

  
2,182
6,444

Current assets
  

Trade and other receivables
 14 
16,754
11,062

Cash and cash equivalents
 15 
4,461
23,146

  
21,215
34,208

  

Total assets

  

23,397
40,652

Liabilities

Non-current liabilities
  

Loans and borrowings
 11 
615
927

  
615
927

Current liabilities
  

Trade and other liabilities
 16 
59,176
56,260

  
59,176
56,260

  

Total liabilities
  
59,791
57,187

  

  

Net liabilities
  
(36,394)
(16,535)
Page 14

 
BURNS & MCDONNELL ENTERPRISES LIMITED
REGISTERED NUMBER: 09911865
 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023


2023
2022
Note
$000
$000


Issued capital and reserves attributable to owners of the parent
  

Share capital
 17 
10
10

Foreign exchange reserve
 18 
195
1,195

Retained earnings
 18 
(36,599)
(17,740)

  
(36,394)
(16,535)

  

TOTAL EQUITY
  
(36,394)
(16,535)

The financial statements on pages 12 to 48 were approved and authorised for issue by the board of Directors and were signed on its behalf by:



A D Schuessler
Director

Date: 4 November 2024

The notes on pages 21 to 48 form part of these financial statements.

Page 15

 
BURNS & MCDONNELL ENTERPRISES LIMITED
REGISTERED NUMBER: 09911865
 
 
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023


2023
2022
Note
$000
$000

Assets

Non-current assets
  

Investments in subsidiaries
 12 
19
19

  
19
19

Current assets
  

Trade and other receivables
 14 
18
3

Cash and cash equivalents
 15 
42
4

  
60
7

  

Total assets

  

79
26

Liabilities

Current liabilities
  

Trade and other liabilities
 16 
474
413

  

Total liabilities
  
474
413

  

  

Net liabilities
  
(395)
(387)


Issued capital and reserves attributable to owners of the parent
 18 

Share capital
 17 
10
10

Retained earnings
 18 
(405)
(397)

TOTAL EQUITY
  
(395)
(387)

The Company's loss for the year was $8,000 (2022 - $254,000).

The financial statements on pages 12 to 48 were approved and authorised for issue by the board of Directors and were signed on its behalf by:



A D Schuessler
Director
Date: 4 November 2024

The notes on pages 21 to 48 form part of these financial statements.
Page 16

 
BURNS & MCDONNELL ENTERPRISES LIMITED
REGISTERED NUMBER: 09911865
 
 
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023


Page 17

 
BURNS & MCDONNELL ENTERPRISES LIMITED

 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023



Share capital
Foreign exchange reserve
Retained earnings
Total attributable to equity holders of parent
Total equity


$000
$000
$000
$000
$000

At 1 January 2022
10
(193)
(12,752)
(12,935)
(12,935)

Comprehensive income for the year




Loss for the year
-
-
(4,988)
(4,988)
(4,988)

Total comprehensive income for the year
-
-
(4,988)
(4,988)
(4,988)

Foreign exchange movement
-
1,388
-
1,388
1,388

Other comprehensive gain for the year
-
1,388
-
1,388
1,388

At 31 December 2022
10
1,195
(17,740)
(16,535)
(16,535)

At 1 January 2023
10
1,195
(17,740)
(16,535)
(16,535)

Comprehensive income for the year




Loss for the year
-
-
(18,859)
(18,859)
(18,859)

Total comprehensive income for the year
-
-
(18,859)
(18,859)
(18,859)

Foreign exchange movement
-
(1,000)
-
(1,000)
(1,000)

Other comprehensive gain for the year
-
(1,000)
-
(1,000)
(1,000)

At 31 December 2023
10
195
(36,599)
(36,394)
(36,394)

The notes on pages 21 to 48 form part of these financial statements.

Page 18

 
BURNS & MCDONNELL ENTERPRISES LIMITED

 
 
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023



Share capital
Retained earnings
Total equity


$000
$000
$000

At 1 January 2022
10
(143)
(133)

Comprehensive income for the year



Loss for the year
-
(254)
(254)

Total comprehensive income for the year
-
(254)
(254)

At 31 December 2022
10
(397)
(387)

At 1 January 2023
10
(397)
(387)

Comprehensive income for the year



Loss for the year
-
(8)
(8)

Total comprehensive income for the year
-
(8)
(8)

At 31 December 2023
10
(405)
(395)

The notes on pages 21 to 48 form part of these financial statements.

Page 19

 
BURNS & MCDONNELL ENTERPRISES LIMITED

 
 
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022
Note
$000
$000

Cash flows from operating activities
  

Loss for the year
  
(18,859)
(4,988)

Adjustments for
  

Depreciation of property, plant and equipment
 10 
435
373

Depreciation right of use asset
 11 
591
443

Impairment losses on intangible assets
  
-
1,549

Finance expense
  
31
30

Net foreign exchange (gain) / loss
  
(1,254)
1,388

Income tax charge / (credit)
 9 
3,942
(1,249)

  
(15,114)
(2,454)

Movements in working capital:
  

(Increase)/decrease in trade and other receivables
 14 
(5,692)
1,565

Increase in trade and other payables
 16 
3,220
19,115

Cash generated from operations
  
(17,586)
18,226

  

Net cash (used in)/from operating activities

  
(17,586)
18,226

Cash flows from investing activities
  

Acquisition of subsidiary, net of cash acquired
  
-
(136)

Purchases of property, plant and equipment
 10 
(375)
(254)

Net cash used in investing activities

  
(375)
(390)

Cash flows from financing activities
  

Payment of lease liabilities
 11 
(724)
(562)

Net cash used in financing activities
  
(724)
(562)

Net cash (decrease)/increase in cash and cash equivalents
  
(18,685)
17,274

  

Cash and cash equivalents at the beginning of year
  
23,146
5,872

Cash and cash equivalents at the end of the year
  
4,461
23,146

The notes on pages 21 to 48 form part of these financial statements.

Page 20

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Burns & McDonnell Enterprises Limited (09911865) (the 'Company') is a private Company limited by shares which is incorporated in England & Wales and domiciled in the United Kingdom. The Company's registered office is at C/O Corporation Service Company (UK) Limited, 10th Floor, 5 Churchill Place, London, E14 5HU. The places of business are Birmingham and London, UK and Mexico City, Mexico. For details on the Group’s principal activities, see the Directors' Report on page 5.

2.Accounting policies

 
2.1

Basis for preparation and consolidation

The accompanying consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS), IRS Interpretations Committee (IFRS IC) interpretations, and the
Companies Act 2006 applicable to companies reporting under IFRS. The accompanying consolidated financial statements are representative of the consolidated results of Burns & McDonnell Enterprises Limited and its subsidiaries, Burns & McDonnell Europe (UK) Limited, B&McD Engineering S.A de C.V., B&McD Services S.A. de C.V, Burns & McDonnell Asia (Philippines), Inc and Burns & McDonnell South America (Chile) SpA. Further details are given in note 12. 
The consolidated financial statements are prepared under the historical cost convention. All values are rounded to the nearest thousand USD ($000) except when otherwise indicated.
The Company has taken advantage of the exemption in s.408 of the Companies Act 2006 not to publish its own profit and loss account.
The preparation of consolidated financial statements in conformity with IFRS 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 assumption and estimates are significant to the consolidated financial statements are disclosed in note 3.

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group:

has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
the contractual arrangements with the other vote holders of the investee;
rights arising from other contractual arrangements;
the Group's voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.





Page 21

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.1
Basis for preparation and consolidation (continued)

Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

The Company's functional currency is United States dollar. The consolidated financial statements are also presented in United States dollar ($). The information included for comparative purposes covers the year ended 31 December 2022.

The stand-alone parent company financial statements were prepared in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' (FRS 101) and in accordance with applicable accounting standards. The parent company has taken advantage of the following disclosure exemptions under FRS 101:
a) the requirements of IFRS 7 Financial Instruments: Disclosures;
b) the requirements of IFRS 16 related to short term leases;
c) the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;
d) the requirements of paragraphs 10(d), 10(f), 39(c), and 134-136 of IAS 1 Presentation of Financial
Statements;
e) the requirements of IAS 7 Statement of Cash Flows;
f) the requirements of paragraphs 30 and 31 in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors; and
g) the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is a wholly owned by such a member.

Page 22

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.2

Going concern

The Burns & McDonnell Enterprises Limited Group has net liabilities at 31 December 2023 amounting to $36.4 million (2022 - $16.5million). The Directors have received the parent Company's commitment in writing to provide adequate financial support to the Group, if required, for a period of at least 12 months from the approval date of the statement of financial position to enable it to meet its liabilities as and when they fall due, which at 31 December 2023 included $45.2million due to its parent group in the US. As noted in note 22, since the year end, the Group, has incurred further costs on contracts in progress amounting to $17.9million. These costs have been funded by further loans from the Group's US parent group.
The Group's US parent group is confident, based on its review of projected revenues and cash-flows, including taking into account the application of downside sensitivities, that it has adequate resources to continue operations and provide financial support to Burns & McDonnell Enterprises Limited for a period of at least 12 months from the approval date of the statement of financial position.
Based on the confirmation of support received from the US parent group, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for a period of at least 12 months from the approval date of the statement of financial position. Accordingly, the Directors have prepared the accounts under the going concern basis which they consider to the appropriate.

 
2.3

Revenue Recognition

Income from advisory, engineering, and construction contracts is recorded on the percentage-of-completion method of accounting in accordance with IFRS 15. Gross revenue on contracts is recognised in the proportion of actual job costs incurred to the total estimated costs of the project. Losses are recognised as soon as they are foreseen. Actual job costs include labour, direct costs, and applied indirect costs. Direct costs include subconsultant costs, equipment and materials, supplies, and travel costs. Applied indirect costs include fringes and related burden associated with labour costs. Contract warranties, if applicable, are included in the total estimated costs of the project. 
Amounts due from customers for contract work are valued at anticipated net value of work done after provision for contingencies and anticipated future losses on contracts. Claims by the Group are included in the valuation of contracts and credited to the income statement when entitlement has been established and the amount of economic benefit has been established and the amount of the economic benefit receivable can be established reliably. Amounts recognised in excess of amounts invoiced are recorded in debtors as contract assets.
Cash received on account of contracts is deducted from amount due from customers for contract work. Such amounts which have been received and exceed amounts due from customers are included in trade and other payables as contract liabilities. Contract provisions in excess of amounts due from customers are included in provisions.

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

Page 23

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.4

Leasing

The Group adopted IFRS 16 - Leases as of 1 January 2019 under the modified retrospective transition method. The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities representing future lease payments commitments and right-of-use assets representing the right to use the underlying assets.
i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasure of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date unless the interest rate implicit in the lease is readily determinable. Subsequent to the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
The Group's right-of-use assets and lease liabilities are presented as separate line items within the consolidated balance sheet.
iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemptions to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term.

Page 24

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.5

Foreign exchange

Transactions in foreign currencies are initially recorded in the entity's functional currency by applying the spot exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the balance sheet date and the gains and losses on translation are included in the Consolidated statement of comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
The Group's consolidated financial statements are presented in US Dollars, whilst the subsidiary undertakings prepare financial statements in sterling, or different functional currencies. For each entity the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. The exchange differences arising on translation for consolidation purposes are recognised in other comprehensive income.

 
2.6

Income taxes

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted by the balance sheet date. Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the following exception:
 
deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax creditors or tax losses can be utilised.

Income tax expense represents the sum of the tax currently payable and deferred tax.

Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date. The carrying amount of deferred income tax assets is reviewed at each balance sheet date. Deferred income tax assets and liabilities are offset only if a legally enforceable right exists to set off deferred tax assets against deferred tax liabilities, the deferred income taxes relate to the same taxation authority and that authority permits the company to make a single net payment. Income tax is charged or credited to other comprehensive income if it relates to items that are charged or credited to other comprehensive income. Similarly, income tax is charged or credited directly to equity if it relates to items that are credited or charged directly to equity. Otherwise income tax is recognised in the statement of profit or loss.

Page 25

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.7

Intangible assets


Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.


2.8

Impairment of non-financial assets

The Group reviews all financial assets greater than 90 days past due per contractual terms for potential collectability and default. If found to be in default a provision is raised against the open balance on account. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recorded in the income statement in the period they occur.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses no longer exist or may have decreased. If such indication exists, the Group makes an estimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last increase to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior periods. Such reversal is recognised in the income statement unless the asset is carried at the re-valued amount, in which case the reversal is treated as a revaluation increase.

Page 26

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.9

Impairment of financial assets

The Group recognises an allowance, where material, for expected credit losses ("ECLs") for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of any collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12 month EL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is recognised for credit losses expected over the remaining life of the exposure, irrespective of timing of the default (a lifetime ECL).
For trade debtors, the Group applies a simplified approach in calculating ECLs. Therefore, the group does not track changes in credit risk, but instead recognises a loss allowance, where material, based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward looking factors specific to the debtors and the economic environment.

  
2.10

Impairment of tangible assets

At the end of each reporting period, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.


Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Page 27

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.11

Tangible assets

Tangible fixed assets are stated at historic purchase cost less accumulated depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation on tangible assets is calculated to write off the cost of assets on a straight-line basis over the expected useful lives of the assets concerned. The principal lives used for this purpose is as follows:
Furniture, fixtures and equipment                                        5-7 years
Computer software                                                              3 years
Leasehold improvements                                                    shorter of lease term or useful life
Motor vehicles                                                                     5 years
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the consolidated statement of profit or loss.


2.12

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.


2.13

Investments

Investments held as non-current assets are stated at cost less any provision for impairment. Investments are reviewed at least annually for impairment.


2.14

Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Trade and inter-company payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.


2.15

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

Page 28

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.16

Financial instruments

Financial assets
Initial recognition and measurement
Financial assets are recognised when, and only when, the Company becomes a party to the contractual provisions of the financial instruments.
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through the Statement of comprehensive income, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through the Statement of comprehensive income are expensed.
Trade debtors are measured at the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third party, if the trade debtors do not contain a significant component at initial recognition.
Subsequent measurement
Investments in debt instruments
Subsequent measurement of debt instruments depends on the Group's business model for managing the asset and the contractual cash flow characteristics of the asset. The three measurement categories for classification of debt instruments are:
(i) Amortised cost
Financial assets that are held for the collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at mortised cost. Financial assets are measured at
mortised cost using the effective interest method, less impairment. Gains and losses are recognised in the Consolidated statement of comprehensive income when the assets are derecognised or impaired, and through amortisation process.
(ii) Fair value through other comprehensive income ("FVOCI")
Financial assets that are held for collection of contractual cash flows and for selling the financial assets,
where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI.
Financial assets measured at FVOCI are subsequently measured at fair value. Any gains or losses from
changes in fair value of the financial assets are recognised in other comprehensive income, except for
impairment losses, foreign exchange gains and losses and interest calculated using the effective interest
method are recognised in the Statement of comprehensive income. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is de-recognised.
(iii) Fair value through profit or loss
Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt instruments that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in the Consolidated statement of comprehensive income in the period in which it arises.
Derecognition
A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in the Consolidated statement of comprehensive income.
 

Page 29

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.17

Financial liabilities

Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value plus, in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
After initial recognition, financial liabilities that are not carried at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.
Derecognition
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires.
On derecognition, the difference between the carrying amounts and the consideration paid is recognised in profit or loss.

  
2.18

Defined contribution schemes

Contributions to defined contribution pension schemes are charged to the consolidated statement of profit or loss in the year to which they relate.

 
2.19

Changes in accounting policies

The Group and the Company have reviewed IFRS standards, amendments and interpretations that became mandatory for the Group and Company financial statements as at 31 December 2023. The new standards that were issued and implemented in the Group and Company financial statements, are disclosed below:

Amendment to IAS 1 Presentation of Financial Statements: Disclosure of Accounting Policies (effective date 1 January 2023)
Amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (effective date 1 January 2023)

Standards and interpretations issued but not yet effective
Amendment to IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (effective date 1 January 2024)
Amendment to IFRS 16 Leases: Sale and Leaseback Transactions (effective date 1 January 2024)
Amendment to IAS 1 Presentation of Financial Statements: Classification of Liabilities (effective date 1 January 2024)

The Group is still assessing the impact of implementing the above standards and does not expect a significant impact on implementation of the above standards.

Page 30

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the Group's consolidated financial statements requires management to make judgements,estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.
Revenue recognition
The Group's revenue accounting policy is central to how the Group values the work it has carried out in each financial year. This policy requires assessments to be made on the current percentage complete and forecasts of the outcome of projects. These forecasts require assessments and judgements to be made on changes in, percent complete, work scope, and costs to completion. While the assumptions made are based on professional judgements, subsequent events may mean that estimates calculated prove to be inaccurate, with a consequent effect on the reported results.
Leases - Estimating the incremental borrowing rate
The Group estimates its lease liabilities by discounting future payments using the interest rate implicit in the lease when readily determinable. When the implicit interest rate is not readily determinable, management uses its incremental borrowing rate (IBR) to measure its lease liabilities. The appropriate IBR to be used is based on assumed rates the Group and its controlled entities would have to pay to borrow over a similar term and with similar collateralization or security arrangements, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
The IBR therefore reflects what the Group or one of its entities 'would have to pay', which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary's functional currency). The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary's stand-alone credit rating).
Taxes
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.
The Group has substantial tax losses carried forward. The Directors have reviewed the deferred tax asset and concluded that there is not persuasive evidence at the balance sheet that it will be fully utilised as an offset to future profits in the foreseeable future.

Page 31

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Revenue from contracts with customers


Timing of revenue recognition:


2023
2022
$000
$000


Goods and services transferred over time
44,253
31,125

44,253
31,125


Analysis of revenue by country of destination:

2023
2022
$000
$000

Geographical markets

United Kingdom
31,712
20,720

Rest of Europe
3,148
1,991

North America
9,176
7,657

Rest of world
217
757

44,253
31,125



2023
2022
$000
$000

Trade receivables
4,705
2,133

Contract assets
7,946
3,624

Contract liabilities

(10,669)
(3,473)

Contract assets represent revenue recognized in excess of amounts billed and include unbilled receivables (typically for cost reimbursable contracts) and contract work in progress (typically for fixed-price contracts). Unbilled receivables, which represent an unconditional right to payment subject only to the passage of time, are reclassified to accounts receivable when they are billed under the terms of the contract. Contract liabilities represent amounts billed to clients in excess of revenue recognized to date. The Group anticipates that substantially all contract assets as of 31 December 2023 will be billed and collected within one year.
Trade receivables in the statement of financial position represent unconditional right to collect from the client subject only to the passage of time. No expected credit losses have been recorded based upon management's review of the underlying balances.

Page 32

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

5.


Exceptional administrative expenses

Administrative expenses include the following exceptional amounts:


2023
2022
$000
$000



Impairment of goodwill (see note 13)
-
1,549

-
1,549


6.


Loss before tax

The loss before tax is stated after charging:


2023
2022
$000
$000


Professional services expenses
793
430

Depreciation
1,040
816

Expenses relating to short-term leases
227
157

Foreign currency losses
193
200


7.


Auditors' remuneration

The Group paid the following amounts to its auditors in respect of the audit of the consolidated financial statements and for other services provided to the Group.


2023
2022
$000
$000

Audit of the Consolidated Company financial statements
35
30

Audit of the financial statements of subsidiary undertakings
49
39


Fees paid to the auditors for non-audit compliance related services in 2023 were $7,000 (2022 - $7,000).




Page 33

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Employee costs

Group


2023
2022
$000
$000

Wages and salaries
10,400
6,777

National insurance
1,194
815

Defined contribution pension cost
1,083
515

12,677
8,107

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group.


2023
2022
$000
$000


Salary
777
663

Other long-term benefits
67
64

Defined contribution scheme costs
25
21

869
748

The monthly average number of persons, including the Directors, employed by the Group during the year was as follows:


2023
2022
No.
No.

Contract execution
87
55

Administration
11
10

Total
98
65

The Directors received no remuneration for their services to the Group as their remuneration was paid by Burns & McDonnell Engineering Company, Inc. The Group receives an allocation of management and administrative services provided by the parent which is recognized in the administrative expenses on the consolidated statement of profit or loss.

Page 34

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Tax expense and deferred tax expense

9.1 Income tax recognised in profit or loss


2023
2022
$000
$000

Current tax


Deferred tax expense

Origination and reversal of timing differences
3,954
(871)

Adjustments in respect of prior years
-
(378)

3,954
(1,249)

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:


2023
2022
$000
$000


Loss for the year
(18,859)
(4,988)

Income tax expense / (credit)
3,954
(1,249)

Loss before income taxes
(14,905)
(6,237)


Tax using the Group's tax rate of 23.5% (2022:19%)
(3,503)
(1,185)

Non-tax deductible amortisation of goodwill and impairment
-
294

Unrelieved tax losses not recognised
7,457
-

Unrelieved loss on foreign subsidiaries
-
(415)

Marginal relief
-
57

Total tax expense
3,954
(1,249)

Changes in tax rates and factors affecting the future tax charges

There is no expiry date for the utilisation of taxable losses carried forward which would mitigate future taxable profits.

Page 35

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Deferred Taxation

2023
2022
$000
$000



At beginning of year
3,721
2,472

Foreign exchange retranslation
233
-

(Charge) / credit to profit or loss
(3,954)
1,249

-
3,721

The deferred tax asset is made up as follows:  


2023
2022
$000
$000



Tax loss carried forward
7,896
3,721

Amounts not recognised
(7,896)
-

-
3,721

The Directors have reviewed the deferred tax asset and conclude that there is not enough persuasive evidence at the statement of financial position date that the asset will be utilised and therefore, the assets has been written down to £nil.

Page 36

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Tangible fixed assets


Group





Leasehold improvem-ents
Motor vehicles
Fixtures and fittings
Computer equipment
Computer software
Total

$000
$000
$000
$000
$000
$000



Cost








At 1 January 2022
926
-
527
370
22
1,845


Additions
-
-
107
147
-
254


Acquired through business combinations
-
25
2
2
-
29


Foreign exchange movements
(96)
-
(55)
(34)
-
(185)



At 31 December 2022
830
25
581
485
22
1,943


Additions
153
-
-
222
-
375


Disposals
-
-
-
(4)
-
(4)


Foreign exchange movements
40
-
28
21
(2)
87



At 31 December 2023
1,023
25
609
724
20
2,401

Page 37

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.Tangible fixed assets (continued)






Accumulated depreciation and impairment








At 1 January 2022
148
-
102
133
14
397


Charge for the year
161
-
78
128
6
373


Acquired through business combinations
-
25
1
2
-
28


Exchange adjustments
(16)
-
(10)
(12)
-
(38)



At 31 December 2022
293
25
171
251
20
760


Charge for the year
175
-
89
170
1
435


Disposals
-
-
-
(4)
-
(4)


Exchange adjustments
15
-
9
9
(1)
32



At 31 December 2023
483
25
269
426
20
1,223



Net book value


At 1 January 2022
778
-
425
237
8
1,448


At 31 December 2022
537
-
410
234
2
1,183


At 31 December 2023
540
-
340
298
-
1,178

Page 38

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Leases

Group
The Group's Mexico and UK entities have entered into long-term office space lease contracts. As of 31 December 2023, these office lease contracts comprise the entirety of the Group's lease obligations. The following are the amounts recognised in the profit or loss:


2023
2022
$000
$000



Depreciation expense of right-of-use assets
591
443

Interest expense on lease liabilities
31
30

Expense relating to short-term leases (included in administrative expenses)
227
157

Total
849
630



Set out below are the carrying amounts of the right-of-use assets recognised and movements during the period:


2023
2022

$000
$000


Cost
-
-

As at 1 January 2023
2,359
2,451

Additions
-
143

Foreign exchange movement
49
(235)

As at 31 December 2023
2,408
2,359

-
-

Depreciation
-
-

As at 1 January 2023
(819)
(395)

Charge for the year
(591)
(443)

Foreign exchange movement
6
19

As at 31 December 2023
(1,404)
(819)

Net Book Value
1,004
1,540

Page 39

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Leases (continued)
Set out below are the carrying amounts of the lease liabilities recognised and movements during the period:


2023
2022
$000
$000



As at 1 January 2023
1,563
2,168

Additions
-
143

Accretion of interest
31
30

Payments
(724)
(562)

Foreign exchange movement
68
(216)

As at 31 December 2023
938
1,563

The Group had total cash outflows for the leases of $724,000 (2022 - $562,000). The Group also had non-cash additions to right of use assets and lease liabilities of $nil (2022 - $nil).

2023
2022
$000
$000



Current portion
323
636

Non-current portion
615
927

938
1,563


12.


Investment in subsidiaries

Company


2023
2022
$000
$000




As at 1 January 2023
19
19

Additions
-
222

Impairment during the year

-
(222)

As at 31 December 2023
19
19


During the prior year the Company acquired 99% of the issued share capital of Burns & McDonnell (Asia) Philippines, Inc. from Burns & McDonnell Global, Inc. for the amount of $222,000. This subsidiary's trading operations are limited given the early-stage nature of the Company's operations in the Philippines. The carrying value of this investment was fully impaired during the prior year.

Page 40

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Investments in subsidiaries
Details of the Group's subsidiaries at the end of the reporting period are as follows:

Name of subsidiary

Principal activity
Place of incorporation and operation









1Burns & McDonnell Europe (UK) Limited

Full service advisory, engineering and delivery services

England, UK
 
2B&McD Engineering S.A. de C.V.

Full service advisory, engineering and delivery services

Mexico
 
3B&McD Services S.A. de C.V.

Supplying and procuring specialised administrative, financial, accounting and human resources services

Mexico
 
4Burns & McDonnell South America (Chile) SpA

Dormant

Chile
 
5Burns & McDonnell Asia (Philippines), Inc.

Full service advisory, engineering and delivery services

Philippines
 



 

1) Burns & McDonnell Europe (UK) Limited

This is a wholly owned subsidiary. The subsidiary's registered office is 5 Churchill Place, 10th Floor, London, EC14 5HU, United Kingdom.

2) B&McD Engineering S.A. de C.V.

The Company owns 99.99% of the subsidiary share capital. The remaining 0.01% is owned by Burns & McDonnell Global, Inc. The subsidiary's registered office is Avenida Ejercito Nacional 154 Segundo Piso, Mexico City, 11540 Mexico.

3) B&McD Services S.A. de C.V.

The Company owns 99.99% of the subsidiary share capital. The remaining 0.01% is owned by Burns & McDonnell Global, Inc. The subsidiary's registered office is Avenida Ejercito Nacional 154 Segundo Piso, Mexico City, 11540 Mexico.

4) Burns & McDonnell South America (Chile) SpA

This is a wholly owned subsidiary. The subsidiary's registered office is Av. Vitacura 5250, Oficina 802, Vitacura, Region Metropolitana, Chile.

5) Burns & McDonnell Asia (Philippines), Inc.

The Company acquired 99% of the subsidiary share capital. The remaining 1% is owned by Burns & McDonnell Global, Inc. The subsidiary's registered office is 19F Marco Polo Hotel Ortigas, Meralco Ave. & Sapphire St., Ortigas Centre, San Antonio, Pasig City, Philippines.

Page 41

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Intangible fixed assets

2023
2022
$000
$000



Cost brought forward
1,549
-

Additions
-
1,549

Impairment brought forward
(1,549)
-

Impairment in the year
-
(1,549)

Net book value
-
-

Goodwill was created by the Group acquisition of subsidiary Burns & McDonnell (Asia) Philippines, Inc. during the prior year, and reflects the excess of the purchase price over the fair value of the liabilities. The goodwill has been fully impaired at the statement of financial position date.

Page 42

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Trade and other receivables



Group

2023
2022
$000
$000


Current

Trade receivables
4,705
2,133

Receivables from group undertakings
3,405
4,981

Amounts recoverable from long-term contracts
7,946
3,624

Prepayments and accrued income
471
324

Other receivables
227
-

Total current trade and other receivables
16,754
11,062

The Group accounts for expected credit losses in accordance with IFRS 9. The Group has not determined an expected credit loss to be recorded based on evaluation of historical credit losses, and that all receivables are contractually obligated and considered due within one year.


Company

2023
2022
$000
$000


Current

Receivables from group undertakings
4
3

Total financial assets other than cash and cash equivalents classified as loans and receivables
4
3

Other receivables
14
-

Total current trade and other receivables
18
3


15.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
$000
$000
$000
$000


Bank and cash balances
4,461
23,146
42
4

4,461
23,146
42
4


Page 43

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Trade and other payables



Group

2023
2022
$000
$000


Current

Payables due to group undertakings
45,248
49,317

Trade creditors
1,892
2,296

Other payables
124
108

Accruals
322
232

VAT
598
207

Contract liabilities
10,669
3,473

Current portion of lease obligations
323
627

Total current trade and other payables
59,176
56,260


Company

2023
2022
$000
$000


Current

Trade payables
2
2

Amounts due to group undertakings
470
373

Other payables
2
38

Total current trade and other payables
474
413

Amounts due to group undertakings are unsecured, non-interest bearing with no stated repayment date.

Page 44

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
17.


Share capital

Issued and fully paid


2023
2023
2022
2022
Number
$000
Number
$000

Ordinary shares of $1 each

At 1 January and 31 December
10,000

10

10,000
 
10
 


18.


Reserves


Foreign exchange reserve

The reserves record the accumulation of gains and losses on translation of foreign operations to Group currency ($) at the statement of financial position date. 

Profit and loss account

The reserves record the accumulation of the profits and losses in the current period and prior periods in the normal course of business.


19.


Financial risk management


19.1 Objective and policies

The Group's principal financial liabilities are comprised of trade and other payables including, amounts due to related parties. The Group has financial assets such as cash and cash equivalents, trade and other trade receivables. The main risks arising from the Group's financial assets and liabilities are foreign currency risk, credit risk and liquidity risk.

Foreign currency risk
Currency risk is the risk that the value of financial assets and liabilities will fluctuate due to changes in foreign exchange rates. The directors currently believe that foreign currency risk is at an acceptable level. The Group does not enter into any derivative financial instruments to manage its exposure to foreign currency risk. The carrying amounts of the group's most significant foreign currency payables and receivables at the reporting date are as follows:



2023
2022

$000
$000


Denominated in GBP.

Cash and cash equivalents
928
12,987

Trade and other receivables
8,144
7,611

Trade and other payables
(42,801)
(39,260)

(33,729)
(18,662)
Page 45

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Denominated in Mexican Peso

Cash and cash equivalent
2,169
9,165

Trade and other receivables
7,136
3,293

Trade and other payables
(10,590)
(15,470)

(1,285)
(3,012)

Denominated in Philippine Peso
-
-

Cash and cash equivalent
3
84

Trade and other receivables
77
-

Trade and other payables
-
(1,866)


80
(1,782)

Net exposure
(34,934)
(23,456)


.


Sensitivity

At 31 December 2023, a 1% change in the exchange rate on the above net liabilities would give rise to a resulting impact on the loss before tax of $350,000 (2022 - $235,000). There are no other balances with significant exposure to exchange rate fluctuations.


.


Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions, and other financial liabilities.
Trade receivables and contract assets
Customer credit risk is managed by each business unit subject to the Group's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is initially assessed at the bid and proposal stage based on an overall financial review of the customer. The credit quality of a customer is updated as new information becomes available. Outstanding trade receivables and contract assets are regularly monitored and contracts with major customers are generally backed by reputable banks and other financial security.
The Group has trade receivables at 31 December 2023 in the amount of $4,705,000, of which 50% was due from one customer. In addition, contract assets are attributable to costs incurred on contracts where invoices have yet to be issued amounting to $10.7 million, of which 10% was due from one customer. The Group is of the opinion that the unbilled balances and amounts billed to third parties will be fully collectable and will mature within the next 3 months. Amounts due from Group undertakings have no contractual payment terms but are expected to be fully collectable and mature within the next 12 months.
An impairment analysis is performed at each reporting date to measure expected credit losses. The provision amounts are based on days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions, and forecasts of future economic conditions. Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement activity.
 
Page 46

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

The group evaluates the concentration of risk with respect to trade receivables and contract assets as low, as its customers are located in several jurisdictions and industries and operate largely independent markets. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 14.

.


Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach is to manage liquidity risk to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.


The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted amounts.


On demand
Less than 3 months
3 to 12 months
1 to 5 years
Total
funds

2023
2023
2023
2023
2023

$000
$000
$000
$000
$000

Amounts due to group undertakings
45,248
-
-
-
45,248

Lease liabilities
-
81
242
615
938

Trade and other payable
-
2,811
-
-
2,811

Other financial liabilities
-
10,669
-
-
10,669


Total 2023
45,248
13,561
242
615
59,666


.


Capital management

For the purpose of the Group's capital management, capital includes issued capital, and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group's capital management policy is to maximise shareholder value. The Group reviews its capital structure in the light of changes in economic conditions, advances received from its ultimate parent undertaking and overall Group performance. No changes were made in the objectives, policies or processes for managing capital during both periods presented.

Page 47

 
BURNS & MCDONNELL ENTERPRISES LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Related party transactions

During the year, the Group entered into transactions, in the ordinary course of business, with certain related parties. The related parties involved are Burns & McDonnell Global, Inc., Burns & McDonnell Engineering Co. Inc., Burns & McDonnell Europe (UK) Limited, B&McD Engineering S.A. de C. V., B&McD Services S.A. de C.V., Burns & McDonnell South America (Chile) SpA and Burns & McDonnell Asia (Philippines), Inc. These Companies are related by way of common control.

The transactions entered into, and trading balances outstanding at 31 December 2023 relating to funding arrangements between the Companies are as follows:

20.1 Loans from related parties


2023
2022
$000
$000


Amounts owed to group undertakings
45,248
49,317

45,248
49,317

Amounts due to group undertakings are unsecured, non-interest bearing and repayable on demand.


21.


Controlling party

The Company's immediate parent undertaking is Burns & McDonnell Global, Inc., a Company registered in the United States. The Company's ultimate parent undertaking and the largest group for which consolidated financial statements are prepared which include the Company is Burns & McDonnell, Inc., also incorporated in the United States. The consolidated financial statements of the largest group are not publicly available. The smallest group for which consolidated financial statements are prepared is that headed by the Company.


22.

Events after the reporting date


Group

Subsequent to the end of the reporting period on December 31, 2023, the Group owned UK company identified additional project costs related to certain customer contracts. These forecasted costs are primarily due to project delays, cost escalations, and changes in scope that arose after the reporting period.
The Directors have considered the impact of these post-reporting period losses of $17.9 million and, while significant, they do not affect the group's ability to continue as a going concern. Appropriate measures are being taken to manage the situation in the next financial period.

Page 48