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

The principal activity of the Company is that of project management and services and provision of process technology for oil and gas, biomass, biofuels, waste to energy and power plants as well as provision of turnkey services including operation and maintenance services.

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

In accordance with the Company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the Company will be put at a General Meeting.

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

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

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

• select suitable accounting policies and then apply them consistently;

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

• 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 on financial statements

We were engaged to audit the financial statements of KNM Project Services Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, 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 Financial Reporting Standard 101 Reduced Disclosure Framework.

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 for disclaimer of opinion section of our 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

We have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion after considering the implications of the following matters:

1. As disclosed in note 1.2 to the financial statements, the following events and conditions indicate that material uncertainties exist that may cast significant doubt on the company’s ability to continue as a going concern:

• The liabilities of the group include bank funding that the group defaulted on in June 2022. The KNM Group obtained a restraining order from the Malaysian High Court which allows KNM Group Bhd and the Company to negotiate terms of a scheme of arrangement with the Lender without the potential threat of any proceedings and actions being brought against the Group in the process. The restraining order has subsequently been extended and is ongoing.

• Not withstanding the above, the financial statements of the company have been prepared on a going concern basis. At the date of this report, the ability of the company to continue as a going concern is highly dependent on a successful outcome of negotiations. Accordingly the financial statements of the company may require adjustments relating to the recoverability and classification of recorded assets and to the classification and additional amounts of liabilities should the company be unable to achieve the desired outcomes

• In view of the uncertainties, we were not able to obtain sufficient appropriate evidence to determine whether the company’s use of going concern basis of accounting was appropriate

2. The recovery of other receivables is dependent on the assets of other group companies realising value for the property held by those companies and we have not been provided with sufficient appropriate audit evidence to determine the appropriateness of the carrying amount of those receivables and to determine whether any adjustments were necessary.

3. Our independent auditors’ report dated 30 September 2024 contains a disclaimer of opinion on the financial statements for the previous financial period ended 31 December 2023. Consequently, certain matters referred to in the aforementioned disclaimer of opinion are included in the opening balances for the financial year ended 31 December 2024 and we were unable to satisfy ourselves that any subsequent transactions affecting these opening balances do not contain material misstatements that affect the current year’s financial statements. Accordingly, the possible effects of these matters render uncertainty on the comparability of the current year’s figures with the comparative figures.

The matters above formed the basis of our disclaimed of opinion on the financial statements of the company for the financial year ended 31 December 2024.

Key audit matters

Except for the matter described above, we have determined that there are no other key audit matters to be communicated in our report.

Conclusion on going concern

We are unable to conclude on the financial statements as a whole, it is not appropriate for the auditor to conclude on whether the use of the going concern basis of accounting is appropriate.

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

Because of the significance of the matters described in the basis for disclaimer of opinion section of our report, we have been unable to form an opinion, whether based on the work undertaken in the course of our 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.

We have nothing to report in respect of the following matters where 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; or

• the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the Directors' Report and take advantage of the small companies exemption from the requirement to prepare a Strategic Report.

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.

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.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud; 

• Reviewing minutes of meetings of those charged with governance;

• Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection; 

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

• Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias. 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

All (loss)/profit and total comprehensive (expense)/income for the period is attributable to the owners of the Company.

KNM Project Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is C/O Azets, Westpoint, Lynch Wood, Peterborough, Cambridgeshire, United Kingdom, PE2 6FZ.

These financial statements have been prepared in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' (FRS 101) and the Companies Act 2006. The recognition, measurement and disclosure requirements of International Financial Reporting Standard as adopted by the EU (EU-adopted IFRS) have been applied to these financial statements and, where necessary amendments have been made in order to comply with the Companies Act 2006 and The Large and Medium Sized Companies and Groups Regulations 2008/410 ('Regulations').                        

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements as permitted by FRS101 paragraph 8:

(i) The requirements of IAS 7 'Statement of Cash Flows' and IAS 1 'Presentation of Financial Statements' paragraph 10(d), 111 relating to the presentation of a Cash Flow Statement.

The financial statements are prepared in sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.

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

The Company is dependent on the support of its immediate holding company and the wider group. Continuing finance is required both to enable the Company to meet its liabilities as they fall due and to continue operating without immediate realisation of all its assets.

The ultimate holding company, KNM Group Berhad (“KNMG”), had on 7 December 2022 announced the default in payment to Danos Limited (“Lender”) in relation to the EUR68.5 million credit facilities granted by the Lender to the Company, as the extension of time from the Lender to defer the repayment until 30 November 2022 was not extended upon its expiry.

On 15 December 2022, with the support from the majority of the creditors of KNMG, including the Lender, KNMG has obtained a restraining order from the Malaysian High Court which allows KNMG and the Company to negotiate and finalise the terms of a scheme of arrangement with the Lender without the potential threat of any proceedings and actions being brought against the Company in the process. Notwithstanding KNMG has successfully held the Court convened meeting on 11 August 2025 pending the Court sanction. The restraining order has now been further extended to 11 May 2026 and the group continue to work through restructuring its financial position.

The directors of the Company and KNMG acknowledged the current liquidity exposure of the Company and have appointed consultants to explore the opportunity to monetise its investments within the KNMG group of companies. The directors have a reasonable expectation that the Company will be able to meet their liabilities and will have adequate resources to continue in operational existence for the foreseeable future based on the positive outcomes of the above-mentioned disposal of investments, the scheme of arrangement with the Lender and continued  financial support  from its holding company. On this basis, the directors consider that it is appropriate to prepare the financial statements of the Company on a going concern basis.

The accounting period for these financial statements is the year ended 31 December 2024. The previous accounting period was extended to 31 December 2023, representing an 18 month period. The accounting period ended 31 December 2023 was extended to bring it in line with the new accounting period end of the ultimate parent company, KNM Group Berhad. Because of this the comparative amounts presented in these financial statements (including the related notes) are not entirely comparable.

Turnover represents amounts receivable for goods and services net of VAT and trade discounts.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

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

The company has elected to apply the provisions of IFRS 7 ‘Financial Instruments Disclosures’ to all of its financial instruments.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

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

Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

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

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

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

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

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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 taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.

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.

Group Accounts

KNM Project Services Limited is an indirect wholly owned subsidiary of KNM Group Berhad, a company incorporated in Malaysia, and the results of KNM Project Services Limited are included in the consolidated financial statements of KNM Group Berhad.

KNM Group Berhad's Annual Report and financial statements for 31 December 2024 are available online at www.knm-group.com/knm_annual.htm.

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

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

Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £9,307 (2023 - £36,472).

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

The Company has estimated tax losses of £477,558 (2023: £236,212) available for carry forward against future trading profits.

The Company has taken advantage of the exemption in paragraph 8(k) of FRS101 from the requirement to disclose transactions with group companies on the grounds that all group companies which are party to the transactions are wholly owned by the same company in the group.

The parent company is KNM Europa BV, incorporated in Netherlands, who owns 100% of the issued share capital.

The ultimate holding company is KNM Group Bhd who own 100% of the issued share capital of KNM Process Systems Sdn Bhd, who in turn owns 100% of the issued share capital of KNM Europa BV.

KNM Group Bhd and KNM Process Systems Sdn Bhd are both incorporated in Malaysia.