The directors present the strategic report for the year ended 31 December 2024.

The Castle Building Services Organisation Limited provides design, supply, installation, commissioning and setting to work Construction Services and Building Works including specialist fit out, Mechanical, Electrical and Plumbing services (MEP) predominantly throughout the Northeast & Yorkshire, Northwest of England, Scotland and occasionally further afield within the UK, on selected projects and with key clients.

Our Head Office is based in Hebburn, Tyne and Wear, where we have been for 22 years. All our central support staff and departments are based here. We also have regional offices based across the North of England and Central Scotland.

2024 was a year of high achievement and memorable milestones for Castle and we have announced strong financial reporting for the year ended 31 December 2024.

We have set targets over many years and the strategic direction we have put in place has seen turnover increase to £53 million for 2024, secured turnover of £73 million for 2025 and a forecast of £100 million for 2026.

This is a great achievement and reflects the hard work and dedication of all our employees. We are achieving the Groups strategy, focusing on sustainable growth and a strong future.

We have positioned ourselves perfectly over the past three years, developing a business model that allows us to springboard with our projected growth.

As well as turnover, gross profit remains strong at 19.4% and with a pre-tax margin at 8%

Alongside growth in revenue, our order book has continued to grow and is secured at £151 million over the course of 2025 and 2026, with a small number of secured sales in 2027. Our year-end cash position was more than £10 million, positioning Castle as a finically strong business.

We have a clear vision for the future and confidence is high. Many thanks to our colleagues, clients and supply chain for the continued loyalty and collaborative approach, as we look set to deliver on a very strong year ahead.

Principal Contracting

We have largely expanded the size of the team, gained further prestigious projects and our contribution to the overall turnover of the Castle business has grown exponentially.

We have fulfilled our objective of steady growth within the Build division and reinforced our position as a regional Tier 1 contractor, operating in sectors such as health, leisure, retail, education, office and industrial/manufacturing. Indeed, in 2025 Build will contribute 50% of sales within the business, which is as per our target and expectation.

We are a go-to contractor for professional, technical, financially stable and experienced project delivery and, unlike many contractors, we specialise in low volume, high value projects that come with their own unique challenges.

In the last 12 months we have embarked on projects across the North East and it is particularly satisfying that it is in our home borough of South Tyneside that we are gaining real traction and growth.

Most notably, we have been chosen to deliver the relocation of South Tyneside College and South Shields Marine College to South Shields town centre. This is a hugely important regeneration project for the borough and is a two-year contract across four sites. (More comprehensive details on the project can be found on page 6 in this Strategic Report).

Following the successful completion of Legrand for UK Land Estates, our valued client chose to negotiate a further contract with us for the 50,000sq. ft. Unit 5 Didcot Way, Boldon Business Park.

Incorporating office accommodation and warehousing.

Principal Contracting (continued)

Elsewhere in the region we have successfully delivered the Wynyard Trade and Retail Park contract and are working closely with Northumberland Estates on potential future projects.

Specialist MEP

Our MEP division has maintained its position as the ‘go-to’ contractor for a raft of key clients, continuing to forge strong relationships that ensure we always have a consistent and high level of secured and projected workstreams.

Great credit goes to all staff who deliver a top-quality service in often very challenging scenarios. It is their passion and skills that sees clients turn to Castle for support time after time.

Across both the North of England and Scotland we are working on a number of prestigious projects, each at various stages of development.

In Scotland, our teams are currently working on a number of Passivhaus-certified educational projects for schools across the region with clients Kier Construction and Morrison Construction. We are also at the outset of a key partnership with Morgan Sindall.

It is always a pleasure to be involved in delivering high-quality projects that support regional economic growth and limit the impact the development has on the environment and the local community.

In the North East, we are working on high-profile projects, including our appointment by Sir Robert McAlpine to supply full mechanical, electrical, public health and renewable services for the game-changing North East Space Skills Technology Centre (NESST) and the exciting Culture House project in Sunderland with Kier Construction. We have also embarked on exciting joint ventures with our Build Division.

In addition, we are nearing completion of our role as building services and internal fit out contractor at the Sofia Onshore converter station, at Wilton, Teesside. We undertook the full mechanical, electrical public health services and all aspects of the internal fit-outs of the buildings.

Forward Outlook

Castle is embarking on South Tyneside’s largest ever stakeholder and community engagement exercise with the contract to relocate South Tyneside College and South Shields Marine College.

This is a game-changing project that will transform South Shields town centre and, as a South Tyneside business, we are extremely proud to take this project forward.

The main college building comprises the construction of a 15,000 sq m campus accessed on King Street with a double-height glass atrium behind the reception entrance. A Grade-II listed building on Barrington Street will be refurbished to house offices for staff.

One Harton Quay has been earmarked for a 125 - bed student accommodation block.

The level of stakeholder and community engagement reflects the huge importance of the relocation to the regeneration of South Tyneside.

We have a dedicated website to provide up-to-date information.

This will include:

Progress of works being made on site

• Any implications for local traffic, such as road closures or diversions at certain times during the contract period

• Opportunities for local businesses to supply services to the project

• Job opportunities that become available

• To provide the local media with an access point for latest news and developments

• Update meetings with local community groups, residents and businesses

• Donations by Castle to local worthy causes and charities specifically related to this project

We continue to work on a fabulous and diverse range of projects.

Forward Outlook (continued)

We have offered a wide range of services to existing and new clients, in the capacity of principal and specialist fit out contractor, whilst maintaining our position of MEP contractor of choice.

Some of the many services utilised in these projects include:

Our inhouse architectural expertise

• Statutory services

• Civil and structural services including earthworks, groundworks frame and envelop. MEP services including associated roads and car parks

• Renewable energy measures include EV charging points

• Battery Energy Storage System (BESS)

• Photo Voltaic array

• Electrical works include, LV installations, small power, fire and intruder alarms, security systems, lighting, including controls, earthing and bonding, lightning protection, data, induction loops and EV charging.

• Energy-efficient VRF air conditioning, providing heating and cooling throughout.

• Sustainable drainage to include a swales and drainage retention pond backed up with underground attenuation tanks and permeable paving to avoid flooding.

WYNARD TRADE AND RETAIL PARK

Appointed as principal contractor to a new retail and trade park in the Tees Valley.

Northumberland Estates obtained planning permission for 52,000 sq ft of retail space and a 45,000 sq ft trade park within Wynyard Business Park in Stockton-on-Tees.

The retail park is set to attract key retailers such as Starbucks and will be anchored by a 46,000 sq ft Sainsbury’s superstore. The trade park will feature seven new units, which will be occupied by a range of businesses, including Howdens, Screwfix and Doves.

CULTURE HOUSE

Main contractor, Kier, appointed us to supply all mechanical, electrical and public health services at the 72,000 sq ft Sunderland development. Culture House will feature exhibition, learning and community spaces. Led by Sunderland City Council, its overarching goal is to recognise the city’s heritage, while inspiring a passion for learning and knowledge, offering opportunities to try new technologies.

NORTH EAST SPACE SKILLS TECHNOLOGY CENTRE (NESST)

We were appointed by main contractor, Sir Robert McAlpine, with the project led by Northumbria University, to supply full MEP services at the new world leading £50 million space skills, research and development centre.

Located in the heart of Northumbria University’s Newcastle city campus, NESST will be a new, national space asset, that brings together industry and academia to collaborate on internationally significant space research and technological developments.

CURRIE COMMUNITY HIGH SCHOOL

We secured a number of Passivhaus projects having been appointed as mechanical and electrical contractor for a variety of school projects across Scotland, including Currie Community High School, one of Scotland’s most energy efficient high schools.

We were appointed by principal contractor by Kier, with Edinburgh City Council being the end user of the building. The school is being built to replace and upgrade the existing building. It is the first Passivhaus designed secondary school in Scotland.

LEGRAND

We were appointed by UK Land Estates as principal contractor for 43,000 sq ft facility associated with the clean energy sector, which will boost the local econony and also have strong, sustainable, credentials. The decision to locate this fantastic facility in Cramlington is a real confidence booster for Northumberland and the region as a whole.

Whilst there is always some level of risk and uncertainty within the apparent volatile world we are now living in, thankfully, we are seeing the risk and uncertainties subside within our industry. With inflation stabilising, material and sub-contracting prices are far easier to predict, and entering longer term fixed price contracts with our supply chain is becoming easier and standard market conditions. Material shortages and longer deliveries are also on the decline, and we are benefiting from receiving materials more swiftly. Clients are learning, and we are now engaging with more flexible terms further de-risking our projects.

Gross profit percentage: 2024: 19.4%; 2023: 32.82%

Net profit before tax percentage: 2024: 8%; 2023: 12.68%

Current ratio: 2024: 1.12; 2023: 1.27

On 28 November 2023 the group was restructured whereby a holding company, CBSO Holdings Limited, was inserted above this company.

Energy and Carbon Usage

Sustainability is fundamental to our business operations, from our office to the projects we build. We monitor our sustainability in all aspects of the work we do from sourcing Low carbon materials, the reduction and reuse of waste, the carbon monitoring of our vehicle fleet, to the utilisation of alternative forms of energy on projects by obtaining Client buy in at design stage where practical. This allows us to look at how we can influence and increase a projects sustainability and carbon footprint.

Castle records their waste recycling performance as part of the Quality Environmental Management System (QEMS). These measures also form part of our executive dashboard and are monitored monthly. We set a target for <2% of our waste going to landfill, which we have achieved consistently since September 2019. Currently we are achieving a level of recycling at 99% (by weight) and are noticing increasing levels of our waste being used for ‘refuse derived fuel’ (diverting 4% of waste produced away from landfill) or ‘energy from waste’ (diverting another 5% of waste). This helps to keep our waste to landfill at significantly low levels.

Each construction site is governed by a Site Waste Management Plan (SWMP) and the Aspects and Impacts Register. Both documents are tailored for its site and are working documents for the life of the project. Before a project commences on site the SWMP is drawn up by our management team along with the Aspects and Impacts Register, as both documents feed into each other to ensure a unified approach to our waste management and material reuse goals. Targets for waste reduction and recycling are defined during this planning and design stage of the project and we work closely with our list of approved waste contractors to ensure that all parties involved, work to reduce the environmental and carbon impacts that our business has. Supporting this activity are the checks carried out by our Health, Safety and Environmental Managers.

In line with our QEMS, Castle considers the whole lifecycle of a potential project before establishing best practice. We consider the lifecycle of components that make up the whole project, from buying low carbon materials through to anticipated maintenance which will eventually lead to replacement and final disposal. For example, all timber products within the build will only be purchased from sustainable & validated sources and concrete products will be used with constituent recycled stone etc. The anticipated energy use of the completed project is also considered when deciding upon preferred insulation products, alternative energy sources and boiler types etc.

When evaluating the information provided, it can be proven that Castle places a significant amount of time and effort into reducing the company’s overall carbon footprint and general environmental impact. In fact, our Plant & Transport Department are currently underway with the longer-term replacement of traditional diesel vehicles with an electric fleet, the first of which arrived last year. With initiatives on our sites, without fleet of vehicles and the office environment, we are improving and will continue to improve upon our own carbon footprint as well as the on sites and within buildings we deliver for clients.

Embracing Technology in Construction

As we reflect on the past year, it is clear our commitment to integrating advanced technology within our construction processes has been successful.

One of the most noteworthy advancements is the use of Augmented Reality (AR) and Virtual Reality (VR) technologies. These tools have been invaluable in enhancing collaboration, particularly when interfacing with Mechanical, Electrical, and Plumbing (MEP) services, as well as Builders Work in Connection (BWIC) openings and interfaces.

This innovative approach allows our teams to visualise and interact with project components in a 3D environment, enabling us to identify and resolve potential clashes before they occur on- site. Such foresight is critical as it significantly reduces the risk of costly delays and reworks where challenges are far more expensive to rectify. Our site teams experience in ensuring our BIM team and designers detail things correctly, remains an essential part of how Castle operates. Key personnel have played a vital role in championing this technological shift. Tim Spencer, our BIM Manager, has led the charge in ensuring our Building Information Modelling (BIM) strategies are effectively implemented, maximising the advantages of AR and VR. His expertise has helped us all understand how to take site reality and best reproduce things in the 3D environment and then, ultimately, produce information our site teams can use on site.

Mark Lindsey, Engineering Director, has been instrumental in aligning our technological capabilities with practical onsite applications. Our onsite teams play an essential part in translating these advancements into daily practices. Their hands-on involvement has ensured that our IT and BIM technology delivers real- world advantages, hopefully facilitating smoother operations and construction processes. Their commitment to using these tools effectively contributed to a marked increase in productivity across various projects.

Our ongoing collaboration with like-minded main contractors and designers has helped our understanding of best practices in the industry. By investing time in upskilling our teams on details from industry leaders such as British Gypsum, we are assisting our clients to produce a better end product and assisting with productivity on our sites throughout the country.

Transformational working space inspires staff collaboration

Led by our senior design lead/ architect, Sarah Sabin, we have an exceptional environment that staff look forward to working in each day and which leads to greater productivity.

The space is highly flexible and interactive with high-tech, open plan spaces to work, with collaboration zones and booths for colleagues to break off to take virtual meetings or calls.

The office combines the Castle corporate brand with softer finishes and high-quality design and furnishings.

The kitchen is a real highlight, occupying a central space on the ground floor, providing a friendly, welcoming area for colleagues to converse.

The upper level also offers lots of open space and with a large modern boardroom, it is ideal for client and team meetings.

Sustainability and environmental considerations were a key driver for this project and this has been incorporated in the following ways:

• PV system installed at roof level with future expansion planned

• Variable refrigerant volume system enables energy flow from one part of the building to another

• Mechanical supply and extract systems with high efficiency heat recovery

• Additional EV charger stations added - we now have 7 EV stations around the building

• LED lighting throughout the building

• PIR (Passive Infrared) lighting control systems reduce energy consumption

• Flexible meeting areas specifically for staff utilising video conferencing, reducing the need for physical travel

• Black-out blinds provide staff with solar glare control at their work station

• Hot desking reduces the overall office footprint and associated energy consumption

Top of the class for Sustainability

We have been appointed by main contractor, Morrison Construction, to supply full mechanical, electrical, public health and renewable services for the new Passivhaus-certified, Paisley Grammar School in Renfrewshire.

Paisley Grammar School will replace the existing school. Boasting a 300-seat theatre, it is the first Passivhaus school in the local authority.

Richard Farrel, Divisional Director, MEP, discusses the project.

How heavily will sustainability feature within the project?

Very heavily. The project will encompass sustainability within its construction. From air source heat pumps, energy efficient heating, high efficiency heat recovery and 174kwp photovoltaics spanning 1000 sq metre array.

Why is the school being built to Passivhaus standards?

Renfrewshire Council set the objective. They want the school to feature cutting-edge facilities with a strong focus on energy efficiency. The building will improve energy efficiency with the internal spaces designed to maximise natural light throughout the day while providing a year-round fresh air supply and temperature control. This will enhance alertness and reduce fatigue—no more mid- afternoon slumps!

The structure of the building is to be sealed to a higher standard. It is less permeable, therefore, needs less heating. Overall, the environment is much better with improved ventilation.

How important is it that Castle is Passivhaus accredited?

As we continue to look at ways to future proof the business through upskilling and investing, we want to ensure our workforce is equipped with both the skills and knowledge on sustainable methods of design, procurement and construction.

As such, becoming Passivhaus accredited was a natural progression for us. We are passionate about sustainable construction methods and the Passivhaus standard is one of the leading construction methodologies, focused on delivering Net-Zero-ready buildings, reducing carbon emissions and creating high quality internal environments which maximise occupant comfort.

What is your favourite aspect of the project?

We have built a long-standing relationship with Morrison Construction who brought us into the project. It’s good to work alongside familiar team members from design and pre-construction problem solving to ensure the best possible delivery of the project.

People and Value

2024 was the year when we really put the focus on our people.

Reaching the 200 staff headcount, with key appointments across the business, was a real milestone for us.

We have a fantastic, loyal, team and it is down to their talent that we are the company we are today. They are based at our headquarters in Hebburn and at our offices in Scotland and Teesside.

The growth in headcount is one clear indicator we are delivering, in collaboration with our customers and suppliers, a consistently high service. We have a strong board of directors providing strategic guidance and an experienced and ambitious senior management team who ensure we are always operating at the highest level. Their key focus is the development of a unified team culture, in which every individual has the opportunity to thrive.

It is crucial that, as our footprint grows, our people remain at the heart of the journey. We want them to stay with us for the long term and to continue to develop new skills. An example of this is that, as part of our own sustainable journey, we have developed a programme in which we continue to invest and upskill our team, with members of each department achieving Passivhaus Institute certification. This construction methodology enables us to deliver modern, forward-looking projects, that support regional economic growth and limit the impact the development has on the environment and the local community.

Showcasing how our people grow will also have the added benefit of demonstrating to prospective employees that we are a caring business, an employer of choice and champions of an inclusive work environment.

People and Value (continued)

In the last year we have played our part in ensuring a continuous flow of young people into the construction sector. We support regional and national initiatives to heighten the profile of the sector to school pupils and college students and we are keen and active advocates of the PlanBEE higher apprenticeship programme, for which we have a dedicated team in place to offer guidance and support.

All in a very good cause

Throughout 2024 we supported a range of inspiring causes, many of which have a special meaning for members of our team.

One, in particular, stands out.

Colleagues, along with our furry friend, Jasper, put their best foot (and paw) forward for the South Shields Alzheimer’s Society Memory Walk.

Starting at Bents Exhibition Park, the 7k walk was filled with fun, laugher and amazing views of the coastline

Thriving partnership with North East colleges

We have a skills shortage in the construction sector and it is crucial we all support, encourage and highlight the career routes that are available.

At Castle we always aim to showcase an industry that is exciting to work in and that people entering it have the opportunity to forge amazing careers. It is important to us that, as well as delivering high quality projects, we give back to the communities in which we operate by way of high-quality jobs.

That is why we have partnered with Hartlepool, Tyne Coast and Gateshead Colleges, to offer students real-life work experience.

Led by our operations director, Shaun Powell, we have welcomed students studying T-Level placements in Construction and Built Environment, to visit our sites at Wynyard Trade and Retail Park where we were appointed as principal contractor to oversee the creation of 52,000 sq ft of retail space and a 45,000 sq ft for trade.

Gateshead College students have been enjoying regular site visits to Plot 2, Cramlington, where we were chosen by developer, UK Land Estates, as principal contractor for a 43,000 sq ft facility, associated with the clean energy sector.

They get to see, at first-hand, how theory is put into practice and to hear of the exceptional career opportunities opening up.

They observe various stages of the construction process, interact with professionals and gain a better understanding of the industry and its real-world challenges and solutions.

Laying the foundations for the future with PlanBEE higher apprenticeship programme.

We are a long-term supporter of the PlanBEE higher apprenticeship programme and 2024 saw the appointment of Ryan Taylor as a trainee BIM coordinator and Ethan Chambers as trainee construction site engineer.

PlanBEE, is a higher apprenticeship programme that allows apprentices to experience a diverse mix of roles within the architecture, engineering and construction (AEC) sector.

It focuses on the technical and managerial aspects of design and construction and is accredited by the Institute for Apprenticeships and Technical Education and underpinned with HNC and HND qualifications at level 4 and 5.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

Particulars of recommended dividends are detailed in note ... to the financial statements.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

[Amend this as an introductory paragraph or use as an explanation concerning lower user status] As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and 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;

• 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 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.

We have audited the financial statements of The Castle Building Services Organisation Limited (the 'company') for the year ended 31 December 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and 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 our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, 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 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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, or returns adequate for our audit have not been received from branches not visited by us; or

• the 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.

As explained more fully in the directors' responsibilities statement, 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 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 company or to cease operations, or have no realistic alternative but to do so.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Fraud and breaches of laws and regulations - ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud ("fraud risks") we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

- Enquiring of Directors, the Audit and Risk Committee, internal audit, compliance officers and inspection of policy documentation as to the Company's high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Company's channel for "whistleblowing", as well as whether they have knowledge of any actual, suspected or alleged fraud.

- Reading Board and all relevant Committee minutes.

- Considering remuneration incentive schemes (primarily the annual incentive plan) and performance targets for management and Directors, including underlying profit from operations targets for management remuneration.

- Using analytical procedures to identify any unusual or unexpected relationships.

- Using our own forensic specialists to assist us in identifying fraud risks based on discussions of the circumstances of the Company.

We communicated identified fraud risk factors throughout the audit team and remained alert to any indications of fraud throughout the audit. This included communication from the Company component audit teams of relevant fraud risks identified at the Company level and request to component audit teams to report to the Company audit team any instances of fraud that could give rise to a material misstatement at the Company.

As required by auditing standards, and taking into account possible pressures to meet profit targets and our overall knowledge of the control environment, we performed procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular the risk that revenue earned from construction and support services is recorded in the wrong period and the risk that Company and component management may be in a position to make inappropriate accounting entries, and the risk of bias in accounting estimates and judgements such as the estimation of forecast costs and the recognition of variable consideration.

On this audit we do not believe there is a fraud risk related to revenue recognition in the Infrastructure Investments segment based on the contractual nature of the segment's revenue with no significant judgement or estimation required in recognising revenue.

We also performed procedures including:

- Identifying journal entries and other adjustments to test for all full scope components based on specific risk-based criteria and comparing the identified entries to supporting documentation. These included those posted to unusual accounts, those posted by users who post journals infrequently and those with missing user identification; and

- Assessing significant accounting estimates for bias.

We discussed with the Audit and Risk Committee matters related to actual or suspected fraud, for which disclosure is not necessary, and considered any implications for our audit.

Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the Directors and other management (as required by auditing standards), and from inspection of the Company's regulatory and legal correspondence and discussed with the Directors and other management the policies and procedures regarding compliance with laws and regulations.

As the Company is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity's procedures for complying with regulatory requirements.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. This included communication to audit teams of relevant laws and regulations identified at the Company level, and a request to report any instances of non-compliance with laws and regulations that could give rise to a material misstatement at the Company.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related company legislation), distributable profits legislation, and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Company's license to operate. We identified the following areas as those most likely to have such an effect: health and safety, anti-bribery, employment law and environmental law. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

We discussed with the Audit and Risk Committee matters related to actual or suspected breaches of laws or regulations, for which disclosure is not necessary, and considered any implications for our audit.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as this may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

· Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Consolidated Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the Consolidated Financial Statements, including the disclosures, and whether the Consolidated Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

· Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

Use of our report

This report is made solely to the 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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 22 to 35 form part of these financial statements.

The notes on pages 22 to 35 form part of these financial statements.

The notes on pages 22 to 35 form part of these financial statements.

The notes on pages 22 to 35 form part of these financial statements.

The notes on pages 22 to 35 form part of these financial statements.

The Castle Building Services Organisation Limited is a private company limited by shares incorporated in England and Wales. The registered office is 6 Merchant Court, Monkton Business Park South, Hebburn, Tyne and Wear, NE31 2EX.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the entity.

The financial statements have been prepared under the historical cost convention.

The principal accounting policies adopted are set out below.

The company meets its day-to-day working capital requirements through its bank facilities. The company's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the company should be able to operate within the level of its current facilities. After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

The turnover shown in the statement of income represents amounts applied for during the year in respect of mechanical and electrical services provided, based upon the value of work completed to date, exclusive of Value Added Tax.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the company 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell 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.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or 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.

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ 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.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 10 (2023 - 1).

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Details of the company's subsidiaries at 31 December 2024 are as follows:

Short term creditors are measured at the transaction price.

Included in creditors is a bank loan of £400,000 (2023: £400,000) which is secured by fixed and floating charges on the assets of the company.

The obligations under finance leases and hire purchase contracts of £Nil (2023: £9,185) is secured by way of a fixed charge over the assets acquired.

Long term creditors are measured at the transaction price.

Included in creditors is a bank loan of £166,667 (2023: £566,667) which is secured by fixed and floating charges on the assets of the company.

The obligations under finance leases and hire purchase contracts of £Nil (2023: £64,710) is secured by way of a fixed charge over the assets acquired.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The deferred tax liability set out above is expected to reverse and relates to accelerated capital allowances that are expected to mature within the same period.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

During the year management charges of £Nil (2023: £263,000) were charged to Castle (Green) Services Limited and £1,154,500 (2023: £416,215) to Castle Building Services (South) Limited. Both companies are included within the consolidated accounts.

The company's ultimate controlling party is CBSO Holdings Limited, whose registered office address is 6 Merchant Court, Merchant Court, Monkton Business Park South, Hebburn, Tyne and Wear, NE31 2EX.

The company is exempt from the requirement to prepare consolidated accounts by virtue of section 400 of the Companies Act 2006. The results of the company and its subsidiaries are included in the consolidated accounts of CBSO Holdings Limited, a company registered in England, whose consolidated accounts are publicly available from Companies House.