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

BCEGI Construction (UK) Limited (referred to as "the Company") is a UK construction and infrastructure business. Our strategy has remained consistent throughout our years, with our focus on long term frameworks that allows us to build meaningful relationships with our key customers, and this strategy is reviewed on an annual basis to test its effectiveness. The company works for private and public sector customers on projects and framework and the activities range from small work to the design and delivery of construction projects and we do not expect this to change in the foreseeable future.

Review of Business

This year has been particularly challenging for the Company, with financial results being significantly impacted by a small number of loss making projects, the Company has taken a series of responsive measures, including changes to the Board of Directors, reductions in management fees and other overheads, and a focus on improving profitability, all aimed at securing a stronger and more sustainable future. The Directors emphasise that, with the strong backing and continued support of the Parent Company, BCEGI has a solid platform for future development. With this support, we are confident that performance will improve and the business will move towards a brighter future and a more stable outlook.

During the period, the Company continued to experience the disruptive effects of a number of external factors impacting the construction industry. These included the ongoing impact of post COVID-related delays, geopolitical volatility affecting supply chain pricing and availability, the high inflationary pressures experienced across the UK in recent years, and the well-documented labour shortages across the country. A small number of construction projects were severely impacted by the factors above, resulting in the need to book provisions in the accounts. We are engaging positively with our clients to minimise the financial impact of these loss-making projects and to seek recovery of the provisional losses that have been recognised.

Looking ahead, our continued focus on frameworks and identifying clients with multiple opportunities to create a sustainable pipeline of work to support the continued growth of the Company. While uncertainties still exist, the outlook for the years ahead remains positive.

For the coming year all the projects are in hand as well as new tenders under consideration. All activity is underpinned by the Company's uncompromising focus on embedding its safety culture across all operations and its philosophy of perfect delivery, aligned with a commitment to drive industry standards in innovation and sustainability.

The company continues to develop and seek further opportunities in the North-West and North-East regions, in both residential and commercial buildings. The company continues to focus on internal controls to maintain and improve margins where possible as well as ensuring that organic growth is achieved in a well-managed and controlled manner.

Further IT developments and systems improvements are coming into the business and will assist in further enhancing performances. We will focus on developing our market presence maximising return on capital employed. The business will focus on growing by working with clients and partners whom we believe we can add mutual value.

Financial position

The results of the Company as set out on page 15 show a loss on ordinary activities before taxation of £-5,318,693 (2023: £-7,954,550). The financial position of the Company is presented in the Balance Sheet as set out on page 16 showing net liabilities on 31 December 2024 of £-12,228,238 (2023: £-6,909,545).

Key performance indicators

The Company's financial key performance indicators are described in the business review above. No other key performance indicators are deemed necessary to explain the development, performance or position of the company. The Key financial performance indicators used within the business are Revenue, Number of projects, Number of projects, Gross margins, Debtor days and Cash generation.

The management of the business and the execution of the Company's strategy are subject to a number of risks. The key business risks are uncertainties affecting the Company and are considered to relate to the market and economic environment, inflation, health and safety, contractual risk (including mispricing of contracts, managing changes to contracts and contract disputes, poor project delivery and poor contract selection) and liquidity risks.

Contract risk

The key risks are the general market conditions which accompany the construction sector, loss making projects and ensuring the retention and recruitment of our employees with the appropriate skills. A more focused approach to work winning has been implemented which is vital in such challenging market conditions. Further strengthening of risk management procedures and processes, particularly in relation to certain types of work has contributed to progressing the target of reducing/eliminating loss making contracts. Action has been taken to ensure that all key positions at the business are occupied by employees with required level of skills. Skill shortages and material price inflation continues to present challenges in the current marketplace and need to manage in the tender and procurement process as well as in the delivery of contracts undertaken.

Financial risk management and objectives policies

The Company's operations expose it to a variety of financial risks that include credit risk, liquidity risk, interest rate and price risk.

Price risk

The company has no exposure to equity securities price risk as it holds no listed or other equity investments. We also work closely with clients and suppliers on a project by project basis to manage any price fluctuations. The directors will revisit the appropriateness of this policy should the Company's operation change in size or nature.

Currency risk

The company has minimum exposure to currency risk as our key sub-contractors are mainly UK based and contracts are in Sterling.

Liquidity risk

This is the risk that the company will not be able to meet its financial obligations as they fall due. The Company aims to manage liquidity by ensuring that it will always have sufficient resources to meets its liabilities when they fall due, under both normal and stress conditions, without incurring unacceptable losses or risking damage to the Company's (Ultimate Parent's) reputation. As the Company continues to receive financial support from the ultimate Parent Company in Beijing, China. Liquidity risk is low as the Parent Company remains supportive and committed through cash advances and access to loan facilities..

Credit risk

With regard credit risk the Company has implemented policies that require appropriate credit checks on all potential and existing customers before contracts are commenced. Clients for our current projects are all reputable large organisations who we have very good working relationships with, which proves to be valuable in understanding and managing credit risk.

Interest rate and cash flow risk

The company has both interest-bearing assets and interest bearing liabilities. Interest bearing liabilities include bank loans. The company manages interest rate risk and cash flow risk by actively monitoring its cash requirements through regular forecasts to ensure sufficient cash is available.

The directors acknowledge the potential threat that poor levels of cyber security could present, this could impact on our ability to both deliver our projects and our reputation as a trusted brand. Robust controls and procedures are in place to help mitigate these issues, including continual review of our IT infrastructure and data protection procedures and a whole staff training programme to raise awareness of the potential risks.

Section 172(1) statement of Companies Act 2006

The directors, in line with their duties under section 172 of the Companies Act 2006, in promoting the long-term success of the Company for the benefits of all stakeholders. The following disclosure describes how the directors have had regard to the matters set out in section 172(1)(a) to (f) and forms the directors statement required under the section 414 CZA of the Companies Act 2006.

Stakeholders

The directors consider its shareholder, employees, customers, suppliers and local communities to be its core stakeholder groups. As part of its ongoing activities of engaging with stakeholders, the directors have undertaken the following activities in 2024.

Shareholders

Our ultimate shareholder is the Group. We create value for the group by generating sustainable results which will ultimately translate into dividends. We present our performance in monthly summaries to the board. The directors routinely engage with the Group on topics of strategy, governance and performance and our strategic plans including information on the impact on each of our stakeholders including the community and environment.

Customers

One of our core values is "the customer comes first", this is underpinned by our perfect delivery approach, the cornerstone of this is to develop a customer charter for each project which gives clarity around our customers objectives, ensuring we focus on these at all times and working quickly to resolve any isolated disagreements that may arise from time to time.

Suppliers

Our suppliers and subcontractors are critical to our operations, and we take a long-term collaborative approach to working with them. During the year we have undertaken various events around the country to engage with our suppliers, including sharing with them our strategy and pipeline of work. We have also focused heavily on improving our payment record with our suppliers to ensure that we are meeting and if not exceeding the statistics shown by the government on an annual basis of the Prompt Payment code target of 95%. The Company has targets of a minimum of 70% subcontractors and materials order to be placed within 30 miles of the project, recognising the need to ensure strong supply chains and to support the local economy.

Employment

Our employees are at the forefront of our business. We are proud of our people who have the passion, commitment and range of expertise we need to support and make a difference for our clients. Our key priority is to provide our employees with a fair, respectful and safe environment in which to work, have regard for their health and well-being, invest in their personal development and career progression and create an open and honest cultures that promotes diversity and inclusion. Our employee policies are designed to support these goals and consideration of external legislation, our Code of Conduct and our Core Values so that we can continue to recruit, develop and retain the talent needed to deliver our strategy.

Training and development opportunities are regularly discussed at personal development reviews, and staff

are encouraged to pursue mentoring opportunities and further qualifications within their specialist areas.

Over the past 12 months, our ongoing initiatives have steadfastly prioritized employee health and safety, as well as mental health and wellbeing, particularly as colleagues transitioned from extended remote work and society gradually returned to renewed normalcy. The mental health awareness training highlighted in last year’s reporting remains fully accessible to all employees, reinforcing our commitment to sustaining this vital support

Applications for employment by disabled persons are always fully considered, bearing in mind the respective aptitudes and abilities of the applicant concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the Company continues and the appropriate training is arranged. It is the policy of the Company that the training, career development and promotion of a disabled person should as far as possible, be identical to that of a person who does not suffer from a disability, and will continue to do so as the directors believe that a truly diverse and inclusive workplace will ultimately benefit this company moving forward.

We recognise that diversity of thought, perspectives and experiences drive innovation and provides a competitive advantage and therefore ensure that our employment practices promote a diverse and inclusive work environment. We are committed to creating opportunities for career growth and building a continuous learning culture for all of our employees.

We will continue to invest in our people and seek to be recognised as a leading employer in our sector. Staff developments through investment in both vocational and professional skills have been essential in recruiting, maintaining, and retaining an experience workforce. We believe that the skills and competences of our people are crucial for the continued success of the business and will continue to invest in our development programs. Our aim is to develop a market leading capability and be recognised as a leading employer.

The company recognises the need to ensure effective communication with employees and focuses on three key methods of engagements: virtual briefings, leadership briefings and through in-house newsletters and intranet updates. We have adapted our ways of working to enhance the level of communication and engagement, and continued to focus on adaptable working and employee wellbeing.

BCEGI is committed to acting ethically and with integrity in delivering its business operations and maintains a zero-tolerance approach to Modern Slavery and Human Trafficking. By encouraging transparency within its relationships with its clients and its suppliers and subcontractors BCEGI aims to prevent any opportunity for modern slavery to occur within its supply chain, including servitude, forced or compulsory labour and human trafficking as defined within the Modern Slavery Act 2015.

The Company insists that a policy of equal opportunity employment is always demonstrably evident. Selection criteria, procedures and training opportunities are designed to ensure that all individuals are selected, treated and promoted based on their merits, abilities and potential.

Health, safety & wellbeing

Within the business of construction, the company undertakes activities that have the potential to cause injury or hazards to our workforce, site visitors, member of the public and the environment. To minimise risk, reputational damage or potential liability we work to stringent policies and procedures, which are regularly reviewed.

Continual investment in health, safety and welfare has been a priority for the company this year and will continue to do so in future years as all our workforce and those affected by our activities are fundamental to the success of our business. We promote a health and safety ethos which is fully integrated into our management system and decision-making process by:

- Providing strong and active leadership;

- Providing a safe and healthy working environment;

- Identifying hazards, eliminating the risk where reasonably practicable and implementing robust management arrangements to control those risks which remain;

- Providing information, instructions, training and supervision to enable the safe performance of all our operations and activities; and

- Maintaining effective systems to enable communications and consultations with our workforce, our suppliers, our subcontractors and other interested parties.

Our workforce must be diligent in taking reasonable care for health, safety and wellbeing of themselves and of other who may be adversely affected by their actions or neglect. Everyone has an individual responsibility to challenge unsafe practices, report unsafe conditions and comply with all health and safety requirements. We are committed to preventing injuries and the protection of health and wellbeing buy driving improvements, creating innovation and challenging conventional views and practices.

We bring this policy to the attention of all our Employees, our subcontractors, partners and other interested parties, as collectively their support and professionalism is essential in making it truly effective.

Our number one priority in the business has always been health and safety, where historically this has focused on physical wellbeing. The directors recognise the impact of potential mental health issues especially given poor statistics in our industry. Therefore, we have sought to promote health awareness across our employees as well encouraging several employees to train as mental health first aiders.

We consult local communities impacted by our proposed developments to find out any concern they may have. During 2024, we have engaged with the local communities close to where we work in a number of ways, including local community sessions to discuss plans, project updates via post drops and e-newsletters as well as visits to schools and other charity funded organisations to build engagement. We also ensure that our website, project specific microsites and social media presence promotes the value and reasons why we are working in the area to encourage people to get in touch if they have any concerns.

Principle decisions

We define principal decisions as those that are material to the Company and to the Group and those that are significant to our key stakeholder groups as above. We have given examples of how the directors have considered the outcomes from our stakeholders’ engagements as well as the need to maintain the Company's reputation for high standards of business conduct and to act fairly between the members of the Company in some of the principle decision we have taken during the year.

We continued to promote adaptable working to support the wellbeing of our people utilising the technology we have embedded in our organisation and encouraging engagement as part of our culture and values.

As stated above a significant amount of our workload is undertaken through long term frameworks, for customers typically in the public or private sectors. As part of the procurement process for securing these frameworks there is normally a lot of emphasis on how we engage with our employers, suppliers and the local communities we work in.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024. The annual report comprises the strategic and directors’ report, which together provide the information required by the Companies Act 2006.

The principal activity of the company in the year under review was that of general contractors for construction of roads, bridges, residential and commercial buildings.

Company purpose

The Company's purpose is to inspire talent to deliver excellence in the built environment and this is reinforced through the expertise it offers in construction and infrastructure. Where appropriate, we would collaborate with other divisions within the Group to maximise our offering to our customers. The Group has a common set of core values and Total Commitment for our prefect delivery and 100% safe approach to work forms an integral part of our culture and business strategy. The directors ensure that the values, strategy and culture align, are implemented and communicated consistently through the Company’s work force, for example through inductions for all new starters and regular on-site health and safety briefings for both our employees and supply chain. The Group's philosophy enables the directors the flexibility and autonomy to tailor resources and respond quickly to the needs of our clients.

In line with the companies (Miscellaneous Reporting) Regulation 2018 the following sections sets of the corporate governance arrangements that the Company has had in place during the year. Furter information which demonstrates how the Board makes decision for the long-term success of the Company and its stakeholders, including how the directors ensure that the Company complies with section 172 of the Companies Act 2006 can be found on the Strategic report on page 1 to 5.

Division of responsibilities

The Group’s decentralised philosophy gives the Company’s directors the flexibility and autonomy to tailor resources and respond quickly to the needs of our own clients and partners. The Group’s delegated authorities empower decision making at the appropriate management level dependent on knowledge and industry experience. Delegated authorities ensure that oversight is always maintained and that the directors retain control of key decisions affecting the Company.

Remuneration

The Company’s primary objectives are to set remuneration that is competitive in the marketplace which helps to motivate and retain the calibre of employees required to deliver the Company’s and Group’s strategy. .

There were no interim dividends paid in the current or prior period. The directors do not recommend the payment of a final dividend (2023: nil).

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

The Company indemnifies the directors in its Articles of Association to the extent allowed under section 232 of the Companies Act 2006. Furthermore, the Group maintains liability insurance for its directors of its associated companies.

The Company has not made any qualifying third-party indemnity provisions for the benefits of its directors during the year.

Any relevant information relating to events since the end of the year is given in the notes to the financial statements.

Going concern

The financial statements have been based on a going concern basis which presumes that the Company has adequate resources to remain in operation and that the directors intend it to do so for at least one year from the date the financial statements are signed.

The company is part of Beijing Construction Engineering Group Co, Ltd whose ultimate controlling party is the State-Owned Assets and Administration Commission of the State Council, The People's Republic of China. As the Company is part of a group which participates in BCEG International Investment Co., Ltd (the "Parent") its shares arrangements via its parent and fellow subsidiaries. The company is expected to continue and to be able to obtain finance via intercompany loans to operate for the foreseeable future.

The Parent has significant resources together with its customers portfolio, coupled with the geographically diverse operating footprint of the Parent and breadth of industry groupings, means that the Parent is well placed to manage the direct business impact and the current global economic uncertainty.

In determining the appropriate basis of preparation of the financial statements, the directors are required to consider whether the company can continue in operational existence during the going concern period, which the directors have defined as the date of approval of the 31 December 2024 financial statements through to 31 December 2026.

The directors have reviewed the company's forecasts and projections for the going concern period, to ensure the continuity and sustainability of the company. Each year a detailed cash flow is produced for the year ahead based on the secured contracts, and when there is cashflow shortfall, the Parent company, through its subsidiary BCEGI (Hong Kong) Limited, will provide the funds, to further support our operation and settlement of any liabilities as and when they fall due.

Based on the above, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence to the end of the going concern period, which is 31 December 2026. Thus, they continue to adopt the going concern basis in preparing the financial statements. Further details can be found in the material accounting policy information in the financial statements.

The business has developed a strategic road map detailing how we will operate and identifying the markets in which we believe we can add the most value. The directors have identified the key investments and the areas of focus.

We will focus on developing our market presence as well as working with clients and partners with whom we believe we can add mutual value and together build a strong brand internationally. We will continue to invest in our people seeking to be recognised as a leading employer in our sector.

We will continue our focus on developing innovative solutions, working in partnership with like-minded organisations and we will seek to develop alternate intelligent solutions to business challenges.

DJH Audit Limited, have expressed their willingness to be appointed as auditors of the company. A resolution was proposed at the Annual General Meeting to appoint DJH Audit Limited as the auditors of the company.

To allow for accurate and representative data to include with our Streamline Energy and Carbin Reporting and wider carbon footprint monitoring, strategic procedures continue to determine appropriate calculations for data disclosure. The following methodologies were used to ensure verifiable data was obtained where reasonably practicable:

- Electricity and Water: meter reading data for fixed office locations were obtained directly from the supplier, accessed from invoices provided. At construction sites with an electrical supply, we install electricity meter and where possible smart meters to temporary or permanent supplies feeding site operations, site management personnel submit KWH meter reading through the site diaries on a monthly basis with all the data being gathered by the SHEQ (Safety, Health, Environmental & Quality) team who verify and convert to carbon footprint.

- Transport fuel: Consumption is calculated from vehicle mileage records for vehicles owned by the individuals who are using personal vehicles for business purposes. Mileage covered is converted into kwh data using recognised conversion factors, which then allows a carbon conversion factor per kwh to be applied.

- Fuel: Site management teams submit a record of fuel used in litres in site diaries on a monthly basis with all the data being gathered by the SHEQ team who verify and convert to carbon footprint.

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £1,000 of revenue, the recommended ratio for the sector.

Environment

The Company is committed to sustainable practices that minimise our impact, protect and enhance the environment and create a positive legacy for future generations. We proactively work with our colleagues, clients, supply chain and interested parties to ensure our environmental expectations are managed in that everyone working with us will:

- Identify and control environmental risks through effective measures in a sustainable manner;

- Provide leadership and ensure effective communication and awareness on environmental matters;

- Encourage, promote and adopt environmental best practices across our operations;

- Comply with all applicable legal requirements and continually seek new improved initiatives; and

- Remain focused on technological innovations and change management to assist in meeting or exceeding the requirements.

We aim to achieve continual improvement through:

- Effective leadership, consistent management reviews, leadership engagement and objective and target reviews;

- Planning and evaluation reviews of environmental impacts and aspects and supporting requirements through competent resources;

- Being conscious of the environment both within and out with our immediate operational areas, proactively preventing pollution and maintaining preparedness for emergency situations;

- Providing support and training to our employees and supply chain to encourage and achieve best practice; and

- Promoting efficient use of resources by challenging designers to ensure the most efficient use of energy water or materials.

We bring this policy to the attention of all our employees, all business within our Group, our supply chain and other interested parties, as collectively their support and professionalism is essential in making it truly effective.

We have adopted a local sourcing policy where possible to reduce the carbon emission associated with travel to our projects, we aim to source 70% of subcontract and material trade packages by value within 30 miles of a site.

We have systematically adopted the Group's working attitude and behaviour to allow for a more sustainable working pattern, in line with reducing our energy usage as a company. These adjustments include; reduce our business travel facilitated through virtual communication, flexible working, such as remote working from home has been encouraged to increase production whilst reducing emissions.

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 International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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, International Accounting Standard 1 requires that directors:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

• make an assessment of the company's ability to continue as a going concern.

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.

Each director in office at the date of approval of this annual report confirms that:

• so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

• the director has taken all the steps that he / she ought to have taken as a director in order to make himself / herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

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 financial instruments.

We have audited the financial statements of BCEGI Construction (UK) Ltd (the 'company') for the year ended 31 December 2024 which comprise the income statement, the statement of financial position, 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 UK adopted international accounting standards.

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 loss for the year then ended;

• have been properly prepared in accordance with UK adopted international accounting standards; 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.

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management;

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including legislation such as the Companies Act 2006, taxation legislation, data protection, employment, and health and safety legislation;

- we assessed the extent of compliance with the laws and regulations through making enquiries of management and reviewing legal and professional fee invoices and inspecting legal correspondence; and

- identified laws and regulations were communicated within the audit team and the audit team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries posted during the period and at the period end to identify unusual transactions and agreed to underlying supporting documentation;

- investigated the rationale behind significant or unusual transactions; and

- performed walkthrough tests on major transaction cycles; and

- performed detailed testing relating to the significant accounting estimates.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

- enquiring of management as to actual and potential litigation and claims;

- reviewing correspondence with regulators; and

- reviewing legal and professional fees incurred during the period to identify any potential indications of non-compliance with laws and regulations.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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 income statement has been prepared on the basis that all operations are continuing operations.

In the current year, the following new and revised Standards and Interpretations have been adopted by the company and have an effect on the current period or a prior period or may have an effect on future periods. Their adoption has not had a significant impact on the amounts reported in the financial statements :

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

The Directors do not expect that the adaption of the above standards, amendments and interpretations will have a material impact on the financial statements of the company in future periods.

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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

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

In the application of the company's accounting policies, the directors are required to make judgments, estimates and assumptions about the carrying amounts if the 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 estimates are revised, if the revised amount affects only that period, or in the period of revision and future periods if the revision affects both current and future periods. In categorising leases as finance or operating lease, management makes judgements as to whether significant risk and rewards of ownership have transferred to the Company as lessee.

The company enters into a fixed price construction contract with its customers. At each reporting date the directors perform an assessment to determine the stage of completion of contracts to determine revenue and costs to be recognised. In addition, the directors assess all contracts to identify potential loss making contracts and where full provision for future losses is required. Assessing stage of completion and the future profitability of construction contracts requires the directors to apply estimates and judgements which could differ from actual results.

The company has been loss making in previous accounting periods therefore judgements have been applied by the directors in assessing the recoverability of deferred tax assets relating to tax losses generated. In determining whether to recognise deferred tax assets for tax losses the directors are required to make estimates and assumptions over future trading performance, which can be subjective.

BCEGI Construction (UK) Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Suite 1s-B, First Floor, Trafford House, Chester Road, Old Trafford, Manchester, United Kingdom, M32 0RS. The company's principal activities and nature of its operations are disclosed in the directors' report.

Its parent company is BCEGI Holdings (UK) Limited, incorporated in England and Wales, and the ultimate holding company is Beijing Construction Engineering Group Co Ltd, a company incorporated in The People's Republic of China. Its ultimate controlling party is the State-owned Assets Supervision and Administration Commission of the State Council, the People's Republic of China.

The smallest group to which the results of the company were consolidated was headed by BCEGI Holdings (UK) Limited, the largest group to which the results of the company were consolidated was headed by Beijing Construction Engineering Group Co. Ltd.

The financial statements over the company as an individual entity and are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.

The financial statements have been prepared on the historical cost basis and on a going concern basis. Historical cost is generally based on fair value for the consideration given in exchange for goods and services.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

The principal accounting policies have been applied consistently and are set out below.

In these financial statements the company has applied the exemptions available under IFRS in respect of the following disclosures:

- Certain disclosures required by IFRS 15 Revenue from Contract Customers in respect of information regarding the Company's contracts with its customers, how its revenue is disaggregated, the timing of satisfaction of performance obligation and the transactions price to be allocated to remaining performance obligations.

Further standards may be issued by the International Accounting Standards and standards currently in issue and endorsed by the EU may be subject to interpretations issued by the IFRS IC.

Going concern

The financial statements have been based on a going concern basis which presumes that the Company has adequate resources to remain in operation and that the directors intend it to do so for at least one year from the date the financial statements are signed.

The company is part of Beijing Construction Engineering Group Co, Ltd whose ultimate controlling party is the State-Owned Assets and Administration Commission of the State Council, The People's Republic of China. As the Company is part of a group which participates in BCEG International Investment Co., Ltd (the "Parent") its shares arrangements via its parent and fellow subsidiaries. The company is expected to continue and to be able to obtain finance via intercompany loans to operate for the foreseeable future.

The Parent has significant resources together with its customers portfolio, coupled with the geographically diverse operating footprint of the Parent and breadth of industry groupings, means that the Parent is well placed to manage the direct business impact and the current global economic uncertainty.

In determining the appropriate basis of preparation of the financial statements, the directors are required to consider whether the company can continue in operational existence during the going concern period, which the directors have defined as the date of approval of the 31 December 2024 financial statements through to 31 December 2026.

The directors have reviewed the company's forecasts and projections for the going concern period, to ensure the continuity and sustainability of the company. Each year a detailed cash flow is produced for the year ahead based on the secured contracts, and when there is cashflow shortfall, the Parent company, through its subsidiary BCEGI (Hong Kong) Limited, will provide the funds, to further support our operation and settlement of any liabilities as and when they fall due.

Based on the above, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence to the end of the going concern period, which is 31 December 2026. Thus, they continue to adopt the going concern basis in preparing the financial statements. Further details can be found in the material accounting policy information in the financial statements.

The Company has applied the provisions of IFRS 15, as described, to measure and recognise revenue. Before revenue is recognised, IFRS 15 requires a contract as well as the various performance obligations contained in the contract to be identified. The number of performance obligations depends on the type of contract and activities. Most of the Company's contracts involve only one performance obligation.

Where a contract includes several distinct performance obligations the Company allocates the overall price of the contract to each performance obligation in accordance with IFRS 15. That price corresponds to the amount of the consideration to which it expects to be entitled. Where the price includes a variable component, such as a performance bonus or a claim, the Company only recognises that consideration from the time agreement is reached with the client.

To measure progress towards completion of construction and service contracts, the Company uses either a method based on physical progress towards completion or a method based on the proportion of costs incurred, depending on the type of activity.

Contract amendments (relating to the price and/or scope of the contract) are recognised when approved by the client. Where amendments relate to new goods or services regarded as distinct under IFRS 15, and where the contract price increases by an amount reflecting "stand-alone selling prices" of the additional goods or services, those amendments are recognised as a distinct contract.

Where a third party (such as a subcontractor) is involved in the supply of a distinct good or service, the Company determines whether it obtains control of that good or service before it is transferred to the client. Where control is obtained before transfer to the client, the Company recognises as revenue the gross amount to which it expects to be entitled to in exchange. Where control is not obtained, the Company takes the view that it is not the principal in the transaction and only recognises as revenue the amount corresponding to its remuneration as intermediary.

Revenue is measured based on the consideration specified in a contract with a customer. Where consideration is not specified within the contract and therefore subject to variability, the Company estimates the amount of consideration to be received from its customer. The consideration recognised is the amount which is highly probable not to result in a significant reversal in future periods.

Where a modification to an existing contract occurs, the Company assesses the nature of the modification and whether it represents a separate performance obligation is required to be satisfied or whether it is a modification to the existence of performance obligation.

The Company's activities are wide-ranging, and as such, depending on the nature of the service delivered and the timing of when the control is passed to the customer, the company will account for revenue over time and at a point of time. Where revenue is measured over time the input method is used to measure progress of delivery.

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is amortised evenly over its estimated useful life of 5 years and is now fully amortised.

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

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 recognised in the income statement.

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

Depreciation is recognised to write off the cost of assets less their residual values over their useful lives using the straight line and reducing balance basis. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An item from plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item from plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in the statements of comprehensive income.

At each reporting end date, the company reviews the carrying amounts of its tangible and intangible 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.

Impairment of tangible and intangible assets (continued)

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.

Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value.

In the presentation of the statement of cash flows, cash and cash equivalents including cash on hand and in banks, net of outstanding credit cards and overdrafts. Cash and cash equivalents at the end of the reporting year are shown in the statement of cash flows and can be reconciled to the related items in the statements of financial position.

Financial assets are classified into the following specified categories: financial assets 'at fair value through profit or loss' (FVTPL), 'held-to-maturity' investments, 'available for sale' (AFS) financial assets and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention the marketplace.

Effective interest method

The effective interest method is a method of calculating the amortised costs of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as FVTPL.

Loans and receivables

Loans and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables (including trade and other receivables, bank balances and cash, and others) are measured at amortised cost using the effective interest method less any impairment.

Interest income is recognised by applying the effective interest rate, except for short term receivables when the effect of discounting is immaterial.

Financial assets at fair value through OCI

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

Financial assets classified as available for sale are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income. Where an AFS financial asset is disposed of or determined to be impaired, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss.

Dividends and interest earned on AFS financial assets are included in the investment income line item in the statement of comprehensive income.

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of the investment have been affected.

For AFS equity investments, a significant or prolonged decline in the fair value of the security below its costs is considered to be objective evidence of impairment.

For all other financial assets, objective evidence of impairment could include:

- significant financial difficulty of the issuer or counterparty;

- breach of contract, such as default or delinquency in interest or principle payments;

- it becoming probable that the borrower will enter bankruptcy or financial re-organisation; or

- the disappearance of an active market for that financial asset because of financial difficulties.

For certain categories of financial assets, such as trade receivables, assets are assessed for impairment on a collective basis even if they were assessed not to be impaired individually. Objective evidence of impairment for a portfolio of receivables could include the company's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

For financial assets that are carried at cost, the amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectable, it is written off against the allowance account. Changes in the carrying amount of the allowance account are recognised in the statement of comprehensive income.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date of impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

The company derecognises a financial asset when the contractual rights to the cash flow from the asset expire or are settled, or when it transfers substantially all the risks and rewards of ownership to another entity. If the company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the company retains substantially all the risks and rewards of ownership of a transferred asset, the company will continue to recognise the financial asset and also recognises a collateralised borrowing for proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivables and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.

On derecognition of a financial asset other than in its entirety (e.g. when the company retains an option to repurchase part of a transferred asset) the company allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss.

Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Financial liabilities are classified as either financial liabilities at 'FVTPL' or 'other financial liabilities'.

Financial liabilities at amortised cost

Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and allocating the interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of financial liabilities

The company derecognises financial liabilities when, and only when, the company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability is derecognised when the consideration is paid or payable is recognised in the statement of comprehensive income.

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds received, net of direct issue costs.

Repurchase of the company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the company's own equity instruments.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are classified as current.

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 income statement 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

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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 inventories or non-current 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.

The company operates a defined contribution pension scheme. Payments to the defined retirement benefit plans are recognised as an expense when employees have rendered services entitling them to the contributions.

Short term and long-term employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at an undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognised in respect of other long-term employee benefit are measured at the present value of the estimated future cash outflows expected to be made by the company in respect of service provided by employees up to the reporting date.

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

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

Leases (continued)

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is reassessed at each financial period end to reflect lease modifications and any changes to the factors considered at initial measurement, as set out above. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

The company's revenue for the year was entirely from construction contracts within the United Kingdom.

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

Their aggregate remuneration comprised:

As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.

The charge for the year can be reconciled to the loss per the income statement as follows:

The main rate of corporation tax for the 2024 financial year was 25%

No deferred tax asset has been recognised in respect of material tax losses amounting as it is not considered probable that there will be future taxable profits available. Losses may be carried forward indefinitely.

Property, plant and equipment includes right-of-use assets, as follows:

Depreciation on plant and equipment is recognised in administrative expenses within the statement of total comprehensive income.

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

No significant receivable balances are impaired at the reporting end date.

Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

The loans to fellow group undertakings are unsecured, non interest bearing and repayable on demand.

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

The operating lease commitments represents leases from third parties. During the year the company vacated the business premises following the end of the lease term and moved into short-term serviced offices.

Related parties and group undertakings

Loans from related are unsecured and will not be recalled for at least 12 months. All loans from the related parties are denominated in Sterling.

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.

Contributions totalling £18,539 (2023: £43,968) were payable to the fund at the year end and are included in creditors.

The profit and loss reserves contains the balance of retained earnings to carry forward. It is fully distributable to the owners and is shown as part of the shareholders reserves on the balance sheet.

Financial instruments

Financial instruments utilised by the company during the year's ended 31 December 2024 and 31 December 2023, together with information regarding the methods and assumptions used to calculate fair values, can be summarised as follows:

Financial assets

The company classifies all financial assets which comprise trade and other receivables (excluding prepayments and accrued income), amounts due from customers under construction contracts and cash and cash equivalents, as loans and receivables.

Financial liabilities

The company classifies all financial liabilities, which comprise trade and other payables (excluding accruals & deferred income and lease incentives), amounts due to customers under construction contracts and borrowings as financial liabilities measured at amortised cost.

2024         2023        

Carrying amounts of financial assets                 £      £         

Financial assets measured at amortised costs            12,568,862    18,491,885        

Carrying amounts of financial liabilities

Measured at amortised cost                    20,622,150 10,458,435    

The company has commenced a High Court claim against several defendants in relation to a project. In line with IAS 37, the Company’s legal advisors have advised that further disclosure could prejudice its position; accordingly, no additional details are provided given the confidential and ongoing nature of the litigation.

The company is not subject to any externally imposed capital requirements.

The company's objective when managing capital are to safeguard the company's ability to continue as a going concern in order to provide returns for Shareholders and benefits for other stakeholders

Financial risk management

The company's activities expose it to a variety of financial risks: market risks (including cash flow interest rate risk and fair value interest rate risk), credit risk and liquidity risk. The overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the company's financial performance.

Risk management is carried out by the directors. The directors identify, evaluate and hedges financial risk as appropriate. The directors have written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

a) Market risk

As the company has no significant interest-bearing assets, the company's income and operating cash flows are substantially independent of changes in market interest rates.

The company's interest rate risk arises from long-term borrowing. Borrowing issued at variable rates expose the company to cash flow interest rate risk. Borrowings issued at fixed rates expose the company to fair value interest rate risk.

b) Credit risk

Credit risk is managed at a company level for both. Credit risk arises from cash and cash equivalent and deposits with banks and financial institutions, as well as credit exposure to customers, including outstanding receivables and committed transactions.

For banks and financial institutions, only independently rated parties with a minimum rating of 'A-2' are accepted. If customers are independently rated, these ratings are used. If there is no independent rating, risk control assesses the credit quality of the customer, taking into accounts its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the directors. The utilisation of credit limit is regularly monitored.

c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash reserves and maintaining the availability of funding through an adequate amount of committed credit facilities and loans from related parties.

d) Interest rate risk

The Group's interest rate risk arises from borrowings. The Group reviews its exposure to interest rates on a regular basis and borrow from related parties at fixed rates.

The following amounts were outstanding at the reporting end date:

The following amounts were outstanding at the reporting end date:

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No expense has been recognised in the current year or prior year for bad or doubtful debts in respect of the amounts owed by the related parties.

The company's immediate parent company is BCEGI Holdings (UK) Limited, a company incorporated in England, and a company which is the parent undertaking of the smallest group to consolidate these financial statements.

The company's ultimate parent company is Beijing Construction Engineering Group Co, Ltd, a company incorporated and registered in the Peoples Republic of China. Beijing Construction Engineering Group Co. Ltd is the parent undertaken of the largest Group to consolidate these financial statements.

The company's ultimate controlling party is the State-Owned Assets and Administration Commission of the State Council, The People's Republic of China.

The company has no capital commitments.