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

The principal activity of the company continued to be that of acquiring and executing contracts in the UK in the infrastructure building sector.

The results for the year are set out on page 6.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

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

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 note that the auditor has issued a disclaimer of opinion in respect of the financial statements for the year ended 31 December 2024, due to limitations in the audit scope relating to the tax treatment of certain items. The directors have explained their judgement on this matter in Note 2: Critical Judgements - Uncertainty over income tax treatments, provided all relevant information and supporting documentation to the auditor, and continue to believe that the financial statements present a true and fair view of the company's financial position and performance.

Given the statutory filing deadline, the directors have concluded that it is necessary to proceed with finalising and filing the financial statements together with the audit report in its current form. The directors will continue to engage with the appropriate parties to resolve the issues surrounding the audit opinion.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; 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.

Disclaimer of opinion

We were engaged to audit the financial statements of PORR UK LTD for the year ended 31 December 2024 which comprise the Income Statement, the Statement of Financial Position, the Statement of Changes in Equity 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 FRS 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).

We do not express an opinion on the accompanying financial statements of the company. Because of the significance of the matter described in the basis of disclaimer of opinion section of our audit report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

Basis for disclaimer of opinion

Notes 2, 3 and 4 to the financial statements refer to revenue of £12,499,815 attributable to the Somerset precast slab facility as being recognised in the Income Statement. The company has applied the tax treatment of capital contribution to expenditure on fixed assets to £11,287,534 of the relevant income, which has been treated as non-taxable for corporation tax purposes. In addition, note 25 to the financial statements discloses a contingent liability in relation to a potential tax liability arising from treating contract income as a capital receipt. We were unable to agree with management a basis to proceed with undertaking the necessary audit work to:-

• form an opinion as to the accuracy and validity of the aforementioned disclosures made in notes 2, 3, 4 and 25 to the financial statements; and

• verify a conclusive legislative basis or case law precedent to support the tax treatment adopted.

As a result of this limitation imposed by management, we were unable to determine whether any adjustments may be necessary to the recognition or tax treatment of this revenue. If adjustments were required, notes 2, 3, 4 and 25 would need to be amended. In addition, based on the current standard rate of corporation tax in the UK of 25%, an increase of £2,821,884 would need to be recognised to both the corporation tax charge in the Income Statement and the related corporation tax liability in the Statement of Financial Position.

Opinions on other matters prescribed by the Companies Act 2006

Notwithstanding our disclaimer of an opinion on the financial statements. In our opinion, based on the work undertaken in the course of the audit:

• the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the directors’ report has been prepared in accordance with applicable legal requirements.

Notwithstanding our disclaimer of an opinion on the financial statements. In light of the knowledge and understanding of the company and its environment obtained in the course of the audit performed subject to the pervasive limitation described above, we have not identified material misstatements in the directors’ report.

Arising from the limitation of our work referred to above:

• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

• we were unable to determine whether adequate accounting records have been kept.

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:

• 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.

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 responsibility is to conduct an audit of the company’s financial statements in accordance with International Standards on Auditing (UK) and to issue an auditor's report.

However, because of the matter described in the basis for disclaimer of opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

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 FRC’s Ethical Standard and we have fulfilled our ethical responsibilities in accordance with these requirements.

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 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 opinion we have formed.

PORR UK LTD is a private company limited by shares incorporated in England and Wales. The registered office is 4 Longwalk Road, Stockley Park, Uxbridge, UB11 1FE, United Kingdom.

The company's principal activities and nature of its operations are disclosed in the directors' report.

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

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. In preparing these financial statements, the company applies the measurement and recognition requirements of UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006. The principal accounting policies adopted are set out below.

The following exemptions from the requirements of IFRS have been applied in the preparation of these financial statements and, where relevant, equivalent disclosures have been made in the group accounts of the ultimate parent company, in accordance with FRS 101:

• the requirements of IFRS 7 Financial Instruments: Disclosures;

• the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;

• the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of: (i) paragraph 79(a) (iv) of IAS 1, and (ii) paragraph 73(e) of IAS 16 Property Plant and Equipment;

• the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 39 to 40, 111 and 134-136 of IAS 1 Presentation of Financial Statements;

• the requirements of IAS 7 Statement of Cash Flows;

• revenue disclosures, including:

  • disaggregated and total revenue from contracts with customers; [FRS 101.8(eA), IFRS 15.113(a), 114 & 115]

  • explanation of significant changes in contract assets and liabilities; [FRS 101.8(eA), IFRS 15.118]

  • description of when performance obligations are satisfied, significant payment terms, and the nature of goods and services to be transferred; [FRS 101.8(eA), IFRS 15.119(a)to(c)]

  • aggregate transaction price allocated to unsatisfied performance obligations and when revenue is expected to be recognised; [FRS 101.8(eA), IFRS 15.120-122]

  • significant judgements in determining the amount and timing of revenue recognition and the amount of capitalised costs to obtain or fulfil a contract; [IFRS 101.8(eA), IFRS 15.123,125 & 127 (a)]

  • methods used to recognise revenue over time, determine transaction price and amounts allocated to performance obligations and determine amortisation of capitalised cost to obtain or fulfil a contract; [FRS 101.8(eA), IFRS 15.124, 126 & 127(b)]

• the requirements of paragraph 17 of IAS 24 Related Party Disclosures;

• the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member;

• the requirements of paragraph 58 of IFRS 16 to disclose a maturity analysis of lease liabilities.

• the requirements of paragraphs 88C and 88D of IAS 12 Income taxes.

The financial statements of PORR UK Ltd are consolidated into the financial statements of PORR AG, the ultimate parent company. PORR AG is listed on the Vienna stock exchange. The consolidated statements of PORR AG are available from Abserggasse 47, 1100 Vienna, Austria and are also available on the company's website.

The company hadtrue cash and cash equivalents of £9,526,701, net current assets of £3,405,285 and net assets of £2,864,058 at the balance sheet date, included within which is a liability due in less than one year to group undertakings of £186,219 and contract liabilities of £5,542,341. The directors have prepared forecasts for current ongoing projects which take account of current economic conditions and determined that the company has or can expect to have sufficient working capital for its need for at least the next 12 months from the date of approval of these financial statements. In view of this, the directors consider it appropriate to prepare the accounts on the going concern basis.

Revenue is recognised at an amount that reflects the consideration to which the company is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the company: identifies the contract with a customer, identifies the performance obligations in the contract, determines the transaction price which takes into account estimates of variable consideration and the time value of money, allocates the transaction price to each distinct good or service to be delivered, and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

The company has long-term performance obligations which are due to be fully satisfied in 2030. Revenue from production is recognised and invoiced on delivery of each produced element. Revenue from engineering services is recognised over time according to the nature of the performance obligation. Progress towards completion is measured by the output method and total revenue is recognised by means of the percentage of completion method according to the degree of completion at the relevant cut-off date. Payments of engineering revenue are received per an agreed payment plan and therefore the timing of payments do not directly relate to the performance obligations. Where payments are received in advance the income is deferred. Where performance is in advance of schedule payments income is accrued.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

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

Software 20% straight line

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

Right-of-use assets are recognised at commencement of the lease and initially measured at the amount of the lease liability, plus any incremental costs of obtaining the lease and any lease payments made at or before the leased asset is available for use by the company.

Assets under construction represent costs incurred in relation to construction of the factory. These costs are not depreciated until the accounting period in which the factory is brought into use.

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

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

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.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

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

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

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

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognised initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

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.

The company recognises an allowance for Expected Credit Losses, or an ECL, for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between contractual cash flows due in accordance with the contract and all the cash flows that the company expects to receive, discounted at an approximation of the original effective interest rate.

ECLs are recognised in two stages. For credit exposure for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12 month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

Impairment losses and any subsequent reversals of impairment losses, are adjusted against the carrying amount of the receivable and are recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Financial liabilities are classified as measured at fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:

• it has been incurred principally for the purpose of selling or repurchasing it in the near term, or

• on initial recognition it is part of a portfolio of identified financial instruments that the company manages together and has a recent actual pattern of short-term profit taking, or

• it is a derivative that is not a financial guarantee contract or a designated and effective hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss.

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.

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

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 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.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event and it is probable that the company will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

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.

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

On commencement of a contract (or part of a contract) which gives the company the right to use an asset for a period of time in exchange for consideration, the company recognises a right-of-use asset and a lease liability unless the lease qualifies as a ''short-term'' lease or a ''low-value'' lease.

The lease liability is initially measured at the present value of the lease payments during the lease term discounted using the interest rate implicit in the lease, or the incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined.

The lease term is non-cancellable period of the lease plus extension periods that the company is reasonably certain to exercise and termination periods that the company is reasonably certain not to exercise.

Lease payments include fixed payments, less any incentives receivable, variable lease payments dependent on an index or a rate (such as those linked to LIBOR) and any residual value guarantees. Variable lease payments are initially measured using the index or rate when the leased asset is available for use.

Termination penalties are included in the lease payments if the lease term has been adjusted because the company reasonably expects to exercise an option to terminate the lease.

The lease liability is subsequently increased for a constant periodic rate of interest on the remaining balance of the lease liability and reduced for lease payments.

Interest on the lease liability is recognised in the statement of comprehensive income.

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.

All translation differences are taken to the profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.

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.

The Company's financial statements reflect a significant judgement by the directors regarding the UK corporate tax treatment of costs and revenue associated with the aborted construction of the Somerset precast slab facility. This judgement affects the determination of taxable profit, specifically whether the expenditure is deductible and whether the reimbursement should be treated as taxable income or as a capital receipt.

Revenue of £12,499,815 and related costs of £11,287,534 have been recognised in the Income Statement, refer to Note 3. The directors, drawing their own assessment and supported by independent tax advice, together with consideration of applicable legislation, HMRC guidance, and established principles, concluded that the expenditure is capital in nature and the reimbursement should be treated as a capital receipt. On this basis, no additional taxable profit arises beyond the reported surplus.

In accordance with IFRIC 23, the directors have assessed the likelihood of HMRC challenging this position and, taking into account external advices, consider the risk to be remote. Accordingly, no provision has been recognised. For transparency, the potential financial effect has been presented as a contingent liability. If HMRC were to successfully challenge the Company's position, the maximum potential tax exposure, excluding penalties and interest, is estimated at £2.8 million.

The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residue values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 13 for the carrying amount of property, plant and equipment and note 1.5 for the useful economic lives for each class of asset.

In determining the lease term, the company assesses whether it is reasonably certain to exercise, or not to exercise, options to extend or terminate the lease. This assessment is made at the start of the lease and is re-assessed if significant events of changes in circumstances occur that are within the lessee's control.

The company uses judgement to assess whether the interest rate implicit in the lease is readily determinable. When the interest rate implicit in the lease is not readily determinable, the company estimates the incremental borrowing rate based on its external borrowing secured against similar assets, adjusted for the term of the lease.

The Company recognises revenue under IFRS 15. For the long-term construction and service agreements, the percentage of completion method is applied according to the degree of completion at the relevant cut-off date.

The Contract income of £20,033,966 recognised during the reporting period includes £12,499,815 of revenue attributable to the Somerset precast slab facility costs of £11,287,534. Refer to Note 4. For UK tax purposes, the Company has applied the tax treatment of capital contribution to expenditure on fixed assets to £11,287,534 of the relevant income, refer to Note 2.

The total revenue of the company for the period has been derived from its principal activity wholly undertaken in the United Kingdom.

During the year, an impairment charge of £7,220,804 was recognised in respect of costs incurred on the planned Somerset precast slab facility.

This facility was integral to fulfilling one of the Company’s contracts with a major customer. In June 2024, the Company agreed with the customer on significant modifications to the contract terms. These changes were aimed at increasing the overall efficiency of the project, and, as a result, the planned construction of the facility was canceled. According to the management’s assessment, the cancellation of the facility's construction represents a triggering event for impairment under IAS 36, as the carrying amount of these capitalised assets will no longer be used or contribute to future cash flows and is no longer recoverable.

Consequently, all irrecoverable facility-related costs, totaling £11,287,534, were recognised within the reporting period and recorded in the Income Statement under:

• Exceptional cost - Loss on impairment of fixed assets of £7,220,804 – costs capitalised as Assets under Construction, refer to Note 14,

• Cost of sales of £4,066,730 – facility-related costs incurred after the contract modification, primarily comprised of termination-related expenses.

The related expenditure was reimbursed by the customer under the terms of the contract. These receipts are included in the revenue as capital contributions to expenditure on fixed assets, reflecting their direct link to the costs incurred, refer to Note 3.

Accordingly, while the impairment is reported as an exceptional charge in the income statement, it has been fully offset by the related reimbursement. The presentation, as an exceptional item, highlights the one-off and non-recurring nature of the impairment, but the transaction had no net impact on cash flows or the Company’s overall financial position.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023: 2).

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

*The most significant component of expenses not deductible for tax purposes is £11,287,534 of facility-related costs, refer to Note 4. For tax purposes, these costs are treated as Capital expenditure, not revenue expenditure. This initial non-deductibility is offset by the corresponding Capital contribution treatment of the revenue attributable to this expenditure.

**Capital contribution to expenditure on fixed assets of £11,287,534 was classified as a non-taxable Capital receipt.

This approach results in the surplus of £1,212,281 being subject to corporation tax in the reporting period, aligning the tax treatment with the economic substance and the matching principle, refer to Note 2.

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

* The contract assets shown here do not correspond to the 2023 financial statements and reflect the adjustments made.

During the period, a review of the contracts was undertaken and an alignment with the group's policies was performed. Based on that and in accordance with IFRS 15, it was concluded that remaining rights and performance obligations in a contract should be accounted for and presented on a net basis as either a contract asset or a contract liability. This approach reflects the interdependencies between the rights to receive consideration and the obligations to perform under the contract. The comparative figures have been restated to net off the contract assets and liabilities in relation to a single contract. As a result, a reduction in contract assets and contract liabilities for the comparative period amounting to £2,323,450 was made. There has been no impact on the prior year profit as a result of this restatement. Refer to Note 26.

*The contract liabilities shown here do not correspond to the 2023 financial statements and reflect the adjustments made. Refer to Note 15 and Note 26.

Contract liabilities relate to consideration received in advance of the performance obligation being satisfied, net of any contract assets that predominantly relate to fulfilled obligations which have not yet been invoiced. At the point where completed work is invoiced, the contract asset element of the above is derecognised, and a corresponding receivable recognised.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

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

At the balance sheet date, included in other creditors was £14,429 (2023: £15,862) payable in respect of defined contributions.

The company has taken advantage of the exemption under FRS 101 from the requirements in 'IAS 24 Related Party Disclosures' to disclose related party transactions entered into between two or more members of a group.

An amount of £nil (2023: £5,146) was owed to the company at the balance sheet date by the directors of the company.

The immediate parent company is PORR Bau GmbH, a company incorporated in Austria.

The ultimate parent company is PORR AG, a company incorporated in Austria, which is the largest and smallest group to consolidate these financial statements. PORR AG is listed on the Vienna stock exchange. The consolidated financial statements of PORR AG are available from Absberggasse 47, A-1100 Vienna, Austria and are also available on the company's website.

The directors do not consider there to be one ultimate controlling party.

The Company has adopted a specific tax position regarding the costs and revenue associated with the aborted construction of the Somerset precast slab. This position treats the expenditure as capital expenditure and the corresponding contract income as a capital receipt.

In accordance with IFRIC 23, the directors assessed the risk of HMRC challenging this tax treatment to be remote. Consequently, no provision has been recognised in these financial statements. Refer to Note 2.

For transparency, should HMRC successfully challenge the Company's adopted position, the maximum potential tax liability is estimated at £2.8 million.

The comparative figures have been restated to net off the contract assets and liabilities in relation to a single contract. There has been no impact to the prior year profit as a result of this restatement.