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

On 23rd July 2024, QMCH Limited acquired the share capital of AEROF Craighouse Limited, taking its ownership to 100% of the share capital in the company. On acquisition, AEROF Holdco II Sarl waived share holder loans of £12,052,757 and interest that had accrued thereon.

The company’s turnover increased by 37% compared to the previous year, with the number of residential completions up by 45%. Following the acquisition the directors considered the net realisable value of stock and impaired the carrying values by £4,447,802, £3,458,259 of which has been carried back as a prior year adjustment.

HSBC Plc have provided funding for the company’s only residential development since 2019 and continue to support the development. The term loan expired in January 2025 and following a short-term extension, a further extension was agreed in June 2025 to 31 March 2026 where the current phase of the development will complete and the loan is expected to be repaid in full.

The protracted residential sale process is a source of frustration and uncertainty, with last minute delays or cancellations more frequent than before. The second home and buy to let market has reduced significantly due to higher LBTT and ADS taxes. Whilst interest rates are now stable, they are not as low as many had predicted. This continues to put pressure on the company to reduce borrowing. Construction costs have stabilised in the year and most of the current phase of development is under contract. However, labour shortages, material lead times and other time related delays remain a risk.

To mitigate against the risks, the company are reviewing alternative funding solutions to expedite sales. Some trades have been employed directly to control timing and quality of finishings.

The extension of the company’s development term loan allows the company to continue as normal and complete the current phase of development and sell residential units on the open market. The forecast of costs and sales for the period of at least 12 months from the date of the financial statements supports the going concern assessment.

The company continues to develop the last remaining conversion building on the development and hopes to complete sales in 2025 with the second phase due in early 2026. Sales in 2025 have started well and the remaining stock units are expected to be sold in the year.

Two sites remain undeveloped, following a redesign and subsequent planning submission, the company expects to progress these sites towards the end of the year.

The company’s development term loan expired in January 2025 and following a short-term extension, a further extension was agreed in June 2025 to 31 March 2026 where the current phase of the development will complete and the loan is expected to be repaid in full.

On behalf of the board

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

The principal activity of the company continues to be the development and sales of residential property.

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend (2024: £nil).

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

As at 31 December 2024, the Company had external bank borrowings of £21.5million, due to mature at 31 March 2026. The Company has financed its operations principally through external debt and is reliant on this funding to continue in the development and sale of residential properties. The Company has been supported by their external finance provider, with breaches in financial covenants being waived, the existing financial covenants being restructured and a further extension to the maturity of debt all occurring after the year-end.

The directors have prepared detailed forecasts to 31 December 2028 as part of their going concern assessment. If forecasted sales are not met, there will be a requirement to extend the current loan facility beyond March 2026. The directors believe that, if necessary, they will be able to obtain a further extension to the external finance agreement. In the unlikely event that a further extension was not provided, the directors would consider other sources of external finance. Given the stage of the project, the nature of the funding has changed in that it will no longer be on the development of the site, but rather asset backed funding on the properties themselves. The directors’ believe this provides increased security and thus, increases their likelihood of obtaining external finance if required. However, there are no guarantees that this will be achieved. If funding could not be obtained beyond March 2026, the Company would have insufficient liquidity to fund payment of the amounts that would be due to its lenders and other creditors and there can be no assurance that the Company would continue to be financially viable and continue as a going concern.

The directors have thus prepared the financial statements on a going concern basis. However, these circumstances represent a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern.

Johnston Carmichael LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments, financial risk management objectives and policies.

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 strategic report, 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 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 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; 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 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 AEROF Craighouse Limited (‘the company’) for the year ended 31 December 2024, which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, 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 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.

Material uncertainty related to going concern

We draw attention to Note 1 in the financial statements which notes that as of 31 December 2024, the Company had external bank borrowings of £21.5million, due to mature at 31 March 2026. The Company has financed its operations principally through external debt and is reliant on this funding to continue in the development and sale of residential properties. The Company has been supported by their external finance provider, with breaches in financial covenants being waived, the existing financial covenants being restructured and a further extension to the maturity debt occurring following the year-end.

The directors have prepared detailed forecasts to 31 December 2028 as part of their going concern assessment. If forecasted sales are not met, there will be a requirement to extend the current loan facility beyond March 2026. The directors believe that, if necessary, they will be able to obtain a further extension to the external finance agreement. In the unlikely event that a further extension was not granted, the directors would consider other sources of external finance. Given the stage of the project, the nature of the funding has changed in that it will no longer be on the development of the site, but rather asset backed funding on the properties themselves. The directors’ believe this provides increased security and thus, increases their likelihood of obtaining external finance if required. However, there are no guarantees that this will be achieved. If funding could not be obtained beyond March 2026, the Company would have insufficient liquidity to fund payment of the amounts that would be due to its lenders and other creditors and there can be no assurance that the Company would continue to be financially viable and continue as a going concern.

The directors have thus prepared the financial statements on a going concern basis. However, these circumstances represent a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern.

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Our 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 and Financial Statements 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 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.

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 set out on page 2, 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.

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 assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

• Companies Act 2006;

• Corporate Tax legislation;

• VAT legislation; and

• UK Generally Accepted Accounting Practice.

We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of board meeting minutes as well as submitted returns and relevant supporting documentation.

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:

• Management override of controls

• Revenue recognition

• Valuation of stock

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

• Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;

• Reviewing the level of and reasoning behind the company’s procurement of legal and professional services;

• Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and assessing judgements made by management in their calculation of accounting estimates for potential management bias;

• We tested all of the revenue transactions in the year and up to the date of fieldwork by vouching to agreements with buyers and ultimately a cash collection to verify the date of recognition.

• In response to the risk around manipulation over the valuation of inventory we reviewed the process in which management assessed the net realisable value less costs to complete and assessed it for accuracy. We then compared the accuracy of costs incurred and capitalised during current and prior accounting periods and ensured that these had been accurately recorded and correctly capitalised in line with FRS 102 requirements.

• Completion of appropriate checklists and use of our experience to assess the company’s compliance with the Companies Act 2006; and

• Agreement of the financial statement disclosures to supporting documentation.

Extent to which the audit was considered capable of detecting irregularities, including fraud (continued)

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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.

AEROF Craighouse Limited is a private company limited by shares incorporated in Scotland. The registered office is 5 Melville Street, Edinburgh, United Kingdom, EH3 7PE.

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 company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

As at 31 December 2024, the Company had external bank borrowings of £21.5million, due to mature at 31 March 2026. The Company has financed its operations principally through external debt and is reliant on this funding to continue in the development and sale of residential properties. The Company has been supported by their external finance provider, with breaches in financial covenants being waived, the existing financial covenants being restructured and a further extension to the maturity of debt all occurring after the year-end.true

The directors have prepared detailed forecasts to 31 December 2028 as part of their going concern assessment. If forecasted sales are not met, there will be a requirement to extend the current loan facility beyond March 2026. The directors believe that, if necessary, they will be able to obtain a further extension to the external finance agreement. In the unlikely event that a further extension was not provided, the directors would consider other sources of external finance. Given the stage of the project, the nature of the funding has changed in that it will no longer be on the development of the site, but rather asset backed funding on the properties themselves. The directors’ believe this provides increased security and thus, increases their likelihood of obtaining external finance if required. However, there are no guarantees that this will be achieved. If funding could not be obtained beyond March 2026, the Company would have insufficient liquidity to fund payment of the amounts that would be due to its lenders and other creditors and there can be no assurance that the Company would continue to be financially viable and continue as a going concern.

The directors have thus prepared the financial statements on a going concern basis. However, these circumstances represent a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern.

Revenue is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer. Revenue from the sale of residential property is recognised when the sale has legally completed and transferred to the customer.

It is the Company's policy that all borrowing costs in respect of the bank loan are to be expensed to the profit and loss account throughout the entire development.

Inventories are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to the net realisable value. Cost includes land purchases and associated costs, materials, direct labour and any associated professional fees.

Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. The inventory value is supported by the overall scheme forecast and an external valuation of the site reflecting various market assumptions.

At the end of each reporting period inventories are assessed for impairment. If an item of inventory is impaired, the identified inventory is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the profit and loss account. Where a reversal of this impairment is recognised the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the profit and loss account.

Cash and cash equivalents are basic financial assets and include cash in hand.

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. 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 the Statement of Comprehensive Income.

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 the Statement of Comprehensive Income.

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 and loans from fellow group companies, are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.

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.

Prior Period adjustment

The company has disclosed a restatement in relation to a prior period error in the value of Work In Progress included within stock. An impairment charge of £3,458,259 has now been reflected in the FY23 results within cost of sales with corresponding adjustments to accruals of £857,213 and Work In Progress of £2,601,046. The impact of this prior period adjustment is detailed in note 23 of these accounts.

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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Work in progress, representing trading properties, are carried at the lower of cost and net realisable value. Impairment of £989,543 (2023: £3,458,259) has been recognised in relation to the year end valuation of this work in progress. The net realisable value of such properties is based on the future cost to complete and the amount the company is likely to achieve in a sale to a third party. The Company's estimations are based on the most recent prices achieved for similar properties in a similar location and the build cost per square foot associated with similar properties. In addition to these estimates set out above, the Company takes into account any potential downward revaluation of residential housing market as a result of macro-economic conditions which may have made themselves apparent.

At the reporting date the carrying value of work in progress was £23,113,495 (2023: £33,568,175).

The analysis of the Company's revenue for the year from continuing operations is as follows:

All of the Company's business activities are conducted in the United Kingdom.

During the period, the Company recognised exceptional income and associated interest arising from the waiver of a loan previously due to its former parent entity, AEROF Holdco II S.a r.l. This loan and its associated interest was waived as a result of the controlling interest of the company being transferred. The exceptional income reflects the derecognition of the associated liability.

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

The company had 2 directors in the year ended 31 December 2024. All employees costs are recharged to the company on a monthly basis via a management recharge.

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

A change in the UK Corporation tax rate to 25% took effect from 1 April 2023. This change had a consequential effect on the company's tax charge with the standard rate of tax in the prior year reflective of a marginal tax rate arising from the company's period straddling the 19% and 25% tax rates. Deferred tax has been calculated at 25%.

At the end of the year, the company had losses of £11,694,922 (2023:£6,877,509). Deferred tax assets of £2,923,730 (2023:£3,026,524) have not been recognised on the basis that it is expected that there will not be future taxable profits against which to utilise these losses.

The carrying value of work in progress as at the balance sheet date includes an impairment charge of £989,543 (2023: £2,601,046) included within cost of sales. A prior year adjustment has been recognised in relation to this per note 21.

Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

On 21 May 2019, the Company entered into loan agreements with its parent company, AEROF Holdco II S.a.r.l., and minority shareholder, QMCH Ltd, amounting to facilities of £23,660,582 and £999,959, respectively. These unsecured loans both had an annual interest rate of 8.72%.

During the year, following the acquisition of the Company by QMCH Ltd, the loan from AEROF Holdco II S.a.r.l. was waived in full and interest associated with the loan from QMCH Ltd was waived.

During the year, the Company breached 2 covenants associated with its bank loans.

1) The loan to gross development value; and

2) The loan to current total costs value.

The total amount due at the balance sheet date in respect of these loans were £21,515,487.

The covenant breaches were remedied by the bank removing these covenant via an amendment to the loan agreement. The breach was waived by the lender post year-end and the finance facility has been extended to remain in place until March 2026. As a result, the related borrowings have been classified as current liabilities.

On 1 August 2019, the Company entered into a loan agreement with a facility of £28,000,000. The loan has an annual interest rate equal to SONIA + 3.25% (2023: SONIA + 3.25%) and the original maturity on the facility was 31 July 2023.

Subsequent to this, the loan agreement was amended and the termination date changed to 31 March 2026. The Company will make the repayment of the full loan amount outstanding at the maturity date.

During the year, £25,218 (2023: £44,304) of arrangement fee was amortised and thus released to the statement of comprehensive income.

A debenture remains in place as security for the company’s borrowing facilities as at the reporting date. This debenture includes a fixed charge over all present freehold and leasehold property, a first fixed charge over all present and future book debts, chattels, goodwill, and uncalled capital, and a first floating charge over all other assets and undertakings of the company.

Share premium relates to excess over nominal value of a share at share issue.

Profit and loss reserves represent accumulated comprehensive income and expenditure for the year and prior periods.

On 30 October 2019, the company entered into a guarantee in favour of the City of Edinburgh Council for an amount of £371,040. This guarantee remains in place at the reporting date.

The company’s development term loan expired in January 2025 and following a short-term extension, a further extension was agreed in June 2025 to 31 March 2026 where the current phase of the development will complete and the loan is expected to be repaid in full.

During the year, AEROF Holdco II S.A.R.L. waived an outstanding loan balance of £12,052,757 due from AEROF Craighouse Ltd, along with accrued historical interest of £3,929,859. At the balance sheet date, there were no outstanding balances due to AEROF Holdco II S.A.R.L (2023: £15,982,616).

In addition, accrued interest of £155,353 due to QMCH Limited was waived during the year. At the reporting date, an amount of £500,272 (2023: £655,625) remained outstanding to QMCH Limited.

During the year, the Company incurred management charges of £889,931 from Quartermile Developments Ltd. The amount payable in respect of these charges at the year end was £159,287 (2023: £94,128).

The ultimate controlling parties are directors M Milligan and P Curran.

During the year, QMCH Limited acquired the share capital of AEROF Holdco II Sarl, taking its ownership to 100% of the share capital in the company. The immediate parent company and controlling entity is therefore QMCH Limited, a company incorporated in Scotland, with registered office 5 Melville Street, Edinburgh, Scotland, EH3 7PE.

A prior year adjustment has been recognised in relation to a 2023 Work In Progress impairment charge and unrecorded subcontractor and supplier retention costs.