Registered number:
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The principal activities of the company are that of construction and civil engineering contracting. There have not been any significant changes in the company’s principal activities during the year under review. The directors are not aware, at the date of this report, of any likely major changes on the company’s activities in the next year.
The company has had a successful year, showing solid growth and good progress in trading. The company is well-positioned for further growth, and will continue focusing on its people, operational efficiencies, and market opportunities to overcome challenges and sustain its positive momentum.
The future outlook remains positive, with expectations of continued success in the Civils and Construction divisions, ongoing geographical expansion, and strong financial performance. Financial performance Turnover: The company reported turnover of £57.3m, up £4.5m from the previous year. This reflects a combination of factors, including the robust performance of the Civils division, which saw a marked increase in activity. Additionally, the opening of the regional office in Dundee expanded the company’s geographical reach, contributing to this growth. Gross profit: The comparable gross profit increased significantly to £7.1m (excluding exceptional costs), compared to £4.5m in the previous year. The gross margin percentage increased from 8.6% to 12.4%, a positive indicator of improved operational efficiency and profitability. Exceptional cost of sales: The company reported an exceptional cost of sale of £881k, primarily attributed to the write-down of land, which impacted the operating profit. Despite this, the company still achieved a positive operating profit of £403k, demonstrating resilience in its performance. Profit before tax (Excluding exceptional costs): The company reported a profit before tax, excluding exceptional items, of £1.2m, up from £0.2m in the prior year, showing a significant improvement in underlying profitability. Strategic developments Expansion of geographic coverage: One of the key strategic initiatives this year was the opening of a regional office in Dundee. This move was part of the company's broader strategy to expand its geographic footprint and reach new markets, contributing to the increase in turnover. The regional office will also serve to strengthen relationships with local clients and improve operational efficiency in the region. Recruitment of senior personnel: The company continued its recruitment drive for senior management and key operational staff. The recruitment of skilled personnel is crucial to supporting the company’s growth strategy, particularly as it continues to expand and diversify. The company has focused on attracting individuals with experience and expertise to strengthen its leadership team and ensure the continued success of operations. Operational excellence and focus on health, safety and wellbeing Health, safety, and wellbeing: The company continues to prioritise the health, safety, and wellbeing of its employees, clients, and the supply chain. This focus ensures that the company maintains a positive reputation in the industry, promotes a safe working environment, and minimises risks. These efforts are integral to maintaining long-term sustainability and operational excellence. Employee relations: CHAP Group has developed strong relationships with its workforce, a crucial element for the ongoing success of the company. The company values its people and has built a positive organisational culture, which is reflected in the loyalty of its staff and their commitment to delivering quality results.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Reliance on key personnel: The company continues to be reliant on a core group of key management and operational staff for its ongoing success and expansion. The company’s ability to continue its growth trajectory is closely tied to the retention and development of these individuals, and it must remain vigilant in supporting and incentivising its talent pool.
Market conditions and competition: The construction industry, particularly in the Civils division, remains competitive. The company must continuously adapt to changing market conditions, including fluctuations in demand, pricing pressures, and the availability of resources. Effective cost control, operational efficiency, and maintaining high levels of customer satisfaction will be critical for maintaining profitability.
The Board reviews in detail the performance of each of the businesses through their monthly management accounts and contract costing reports. The Board reviews enquiry levels, order book, contract performance, turnover, manpower levels, gross margins achieved and overheads.
The company directors consider, both individually and collectively, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole in the decisions taken during the current year.
When making these decisions the directors have given regard to:
∙The likely consequences of any decision on the long-term;
∙The interests of the company's employees;
∙The need to foster the company's business relationships with suppliers, customers and others;
∙The impact of the company's operations on the community and environment;
∙The desirability of the company maintaining a reputation for high standards of business conduct; and
∙The need to act fairly between shareholders of the company.
The vast majority of stakeholder engagement is carried out by the Board.
The Board considers and discusses information from across the organisation to help it understand the impact of the company's operations, and the interests and views of our key stakeholders. It also reviews strategy, financial and operational performance as well as information covering areas such as key risks, legal and regulatory compliance. As a result of these activities, the Board has an overview of engagement with stakeholders, and other relevant factors, which enables the directors to comply with their legal duty under section 172 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The directors present their report and the financial statements for the year ended 30 September 2024.
The profit for the year, after taxation, amounted to £331k (2023 - £236k).
During the year dividends no dividends were declared (2023 - £nil).
The directors who served during the year were:
The company's supply chain has been audited and verified against important criteria such as financial stability, anti-bribery, modern slavery and exploitation, safety, fair employment practices and environmental compliance. In addition, we are constantly reviewing our supply chain for compliance and will continue to support local businesses that encourage the fair employment of the disadvantaged and those that adopt fair ethical trading initiatives within the goods and services they supply the company. We pay our suppliers on time, and maintain close relationships with them, providing support where it may be required.
We fully recognise our responsibility to protect the environment and we have strong environmental policy objectives and guidelines in place which we review and update regularly.
The following disclosures cover the financial year from 1 October 2023 to 30 September 2024 and is inclusive of the results for CHAP Group (Aberdeen) Limited. All of the company’s operating activities are included. During this period the company’s energy usage and emissions were as follows:
We are committed to energy efficiency and have a number of policies and programs to decrease energy usage where possible.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Greenhouse gas emissions are reported in tonnes carbon dioxide equivalents CO2e. Calculations are performed using the emission factors which are in accordance with the current guidelines from the UK Government GHG Conversion Factors for Company Reporting 2020.
Definitions Electricity: Electricity is the amount consumed in the UK resulting from the purchase of electricity for our own use, including for transport purposes. Gas combustion: Gas combustion is the amount consumed in the UK resulting from stationary or mobile activities for which the business is responsible. Gas is defined in the guidance but covers methane, ethane, propane, butane, hydrogen & carbon monoxide. Transport: Transport is the amount of energy consumed from activities which the business is responsible and covers all energy used by site based vehicles, used to support the logistical operations as well as offsite spend through reimbursed employee travel. Ratios We believe the best method of assessment is total revenues for the company based on the value used for financial reporting purposes. Based on this value reported our key ratio is 6.6321 tCO2e per £1,000 of revenues.
The auditor, Anderson Anderson & Brown Audit LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHAP GROUP (ABERDEEN) LTD
We have audited the financial statements of CHAP Group (Aberdeen) Ltd (the 'company') for the year ended 30 September 2024, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHAP GROUP (ABERDEEN) LTD (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHAP GROUP (ABERDEEN) LTD (CONTINUED)
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 Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were Construction, Employment, Health & Safety, Taxation legislation and the Companies Act 2006. We identified the greatest risk of material impact on the financial statements from irregularities including fraud to be:
∙Management override of controls to manipulate the company's key performance indicators to meet targets;
∙Timing and completeness of revenue recognition, specifically including managements estimate of amount recoverable on long term contracts;
∙Management judgement applied in calculating provisions; and
∙Compliance with relevant laws and regulations which directly impact the financial statements and those that the company needs to comply with for the purpose of trading.
Our audit procedures to respond to these risks included:
∙Testing of journal entries and other adjustments for appropriateness;
∙Evaluating the business rationale of significant transactions outside the normal course of business;
∙Reviewing judgements made by management in their calculation of accounting estimates, including amounts recoverable on long term contracts, for potential management bias;
∙Enquiries of management about litigation and claims and inspection of relevant correspondence;
∙Reviewing legal and professional fees to identify indications of actual or potential litigation, claims and any non-compliance with laws and regulations; and
∙Performing a disclosure checklist on the financial statements to ensure Companies Act 2006 requirementsare satisfied.
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 Auditor's report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHAP GROUP (ABERDEEN) LTD (CONTINUED)
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditor
Kingshill View
Prime Four Business Park
Kingswells
AB15 8PU
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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BALANCE SHEET
AS AT 30 SEPTEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 27 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
CHAP Group (Aberdeen) Limited (the `company`) is a limited liability company incorporated in Scotland. The registered office is Enterprise Drive, Westhill Industrial Estate, Westhill, Aberdeenshire, AB32 6TQ.
The principal activities of the company are that of building & civil engineering contracting and property development.
2.Accounting policies
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of CHAP (Holdings) Limited as at 30 September 2024 and these financial statements may be obtained from Companies House, Crown Way, Cardiff. CF14 3UZ.
The directors remain pleased with the ongoing commitment of the CHAP group to its debt reduction plans as well as its current strong performance across committed and proposed projects. The CHAP group has currently zero net debt and noted the good relationship the group has with its bankers. The directors, therefore, have made an informed judgement at the time of approving the financial statements, that there is a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. As a result, the directors have continued to adopt the going concern basis of accounting in preparing the annual financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
The amount of profit attributable to the stage of completion of a long term contract is recognised when the outcome of the contract can be foreseen with reasonable certainty. Turnover for such contracts is stated at the cost appropriate to their stage of completion plus attributable profits, less amounts recognised in previous years. Provision is made for losses as soon as they are foreseen. Contract work in progress is stated at costs incurred, less those transferred to the profit and loss account, after deducting foreseeable losses and payments on account not matched with turnover. Amounts recoverable on contracts are included in debtors and represent turnover recognised in excess of payments on account. Other house sales turnover is recognised on legal completion and when construction is complete.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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 profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's Balance sheet when the company becomes party to the contractual provisions of the instrument.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
9.Taxation (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Share premium account
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The company is a subsidiary undertaking of CHAP (Holdings) Limited. The ultimate controlling company is
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