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Registered number: 11230849 EGIS ROAD OPERATION M40 LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
EGIS ROAD OPERATION M40 LIMITED CONTENTS
| Page
Company information | 1
Strategic report | 2
Directors' report | 3 - 4
Independent auditor's report | 5 - 8
Statement of Profit or Loss and Other Comprehensive Income | 9
Statement of financial position | 10 - 11
Statement of changes in equity | 12
Statement of cash flows | 13
Notes to the financial statements | 14 - 36
EGIS ROAD OPERATION M40 LIMITED COMPANY INFORMATION
Directors | X R P Odolant
| P Viellard
Registered number | 11230849
Registered office | 3 Valentine Place
| Southwark
| London
| SE1 8QH
Independent auditor | Menzies LLP
| Chartered Accountants & Statutory Auditor
| 2nd Floor, Origin One
| 108 High Street
| Crawley
| RH10 1BD
Bankers | HSBC
| RMS Dept level 2
| 62-76 Park Street
| London
| SE1 9DZ
Solicitors | Clyde & Co.
| The St. Botolph Building
| 138 Houndsditch
| London
| United Kingdom
| EC3A 7AR
Page 1
EGIS ROAD OPERATION M40 LIMITED STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2024
Introduction
The directors submit their strategic report together with the audited financial statements for Egis Road Operation M40 Limited for the year ended 31 December 2024.
Review of the business and future developments
Turnover for the year amounted to £16.8m (2023: £14.7m). The profit before tax amounted to £0.9m (2023: £0.6m). The Company did not pay a dividend in the year under review (2023: £Nil). The directors consider turnover and profit before tax to be key performance indicators. The development and enhancement of the Company’s existing activities will continue to be the main area of attention. The Company seeks to achieve industry best practice standards of health and safety. We recognise that this is a critical issue for all our stakeholders particularly for our employees and contractors.
Financial risk management
Details of the Company’s principal financial and other risks and the risk management policies are outlined in Note 22 to the financial statements.
Principal activity
The Company's principal activity is the Operation and Maintenance (O&M) of the motorway between London and Birmingham (M40). This report was approved by the board and signed on its behalf.
X R P Odolant Director
Date: 10 March 2026
Page 2
EGIS ROAD OPERATION M40 LIMITED DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 The directors present their report and the financial statements for the year ended 31 December 2024.
Directors' responsibilities statement
The directors are responsible for preparing the Strategic report, Directors' report and the financial statements, in accordance with applicable law. Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK. 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 the financial statements, the directors are required to: ∙select suitable accounting policies and then apply them consistently; ∙make judgments and estimates that are reasonable and prudent; ∙state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements; ∙assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and ∙use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. 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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Going concern
The directors have assessed the company’s ability to continue as a going concern for a period of at least 12 months from the date of approval of these financial statements. The Company’s only revenue-generating contract is scheduled to be completed in January 2027. The directors have performed a review of the future pipeline and are satisfied that the Company will continue trading for the foreseeable future through additional works from future contracts and/or any additional variations or extensions of the existing contract. The directors have confirmed that the Company will continue to meet its liabilities as they fall due and contractual obligations and operations will continue until the completion of the existing contract. Further, the parent company has confirmed that they are willing and able to provide financial support as required to enable the Company to meet its obligations. Accordingly, the going concern basis of accounting has been used in preparing the financial statements.
Profits, dividends and reserves
The profit for the year, after taxation, amounted to £594,431 (2023: £583,849). The directors did not recommend a dividend (2023: £Nil).
Events since the year end
There have been no significant events affecting the Company since the year end, other than the contract reaching completion in January 2027 as mentioned in the going concern disclosure above. Page 3
EGIS ROAD OPERATION M40 LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
Directors
The directors who served during the year were:
X R P Odolant
P Viellard
The directors benefit from a third party qualifying indemnity provision in the form permitted by Section 234 of the Companies Act 2006 in respect of certain third party actions against directors. No claim or notice of claim in respect of these indemnities has been received in the period. The qualifying indemnity provision was in force throughout the financial period and up to the date of approval of the Directors' Report.
Matters covered in the strategic report
The Company has chosen, in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, to set out within the Company's Strategic Report the Company's Strategic Report Information required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties.
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors' report is approved has confirmed 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 ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Auditor
Under section 487(2) of Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier. This report was approved by the board and signed on its behalf.
X R P Odolant Director
Date: 10 March 2026
3 Valentine Place
Southwark
London
SE1 8QH
Page 4
EGIS ROAD OPERATION M40 LIMITED INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF EGIS ROAD OPERATION M40 LIMITED
Qualified opinion
We have audited the financial statements of Egis Road Operation M40 Limited for the year ended 31 December 2024 which comprise the Statement of profit or loss and other comprehensive income, the Statement of financial position, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policies set out on pages 14 - 19. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. Except for the effects of the matter described in the basis for qualified opinion section, the financial statements: ∙give a true and fair view of the state of the Company's affairs as at 31 December 2024 and of its profit for the year then ended; ∙have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; and ∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
We were unable to attend the stock count at 31 December 2024 and thus did not observe the counting of physical inventories at the end of the year. We were unable to satisfy ourselves by alternative means concerning inventory quantities held at 31 December 2024, which are included in the balance sheet at £315,347, by using other audit procedures. Consequently, we were unable to determine whether any adjustment to this amount was necessary. 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 United Kingdom, including the Financial Reporting Council'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 qualified opinion.
Conclusions relating to going concern
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. As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the inventory quantities of £315,347 held at 31 December 2024. We have concluded that where the other information refers to the inventory balance or related balances such as cost of sales, it may be materially misstated for the same reason. Page 5
EGIS ROAD OPERATION M40 LIMITED INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF EGIS ROAD OPERATION M40 LIMITED (CONTINUED)
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit: ∙the information given in the 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. Matters on which we are required to report by exception Except for the material misstatement described in the basis for qualified opinion on other matters prescribed by the Companies Act 2006 section of our report, 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 and the Directors' report. Arising solely from the limitation on the scope of our work relating to inventory, 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. Responsibilities of directors As explained more fully in the directors' responsibilities statement on page 35, 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. Page 6
EGIS ROAD OPERATION M40 LIMITED INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF EGIS ROAD OPERATION M40 LIMITED (CONTINUED) Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: ∙The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including: −The Companies Act 2006; −International Financial Reporting Standards; −UK employment legislation; −UK health and safety legislation; −UK tax legislation; and −General Data Protection Regulations. ∙We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. ∙We understood how the Company is complying with those legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures. We corroborated our inquiries through our review of management meeting minutes. ∙The engagement responsible individual assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area. ∙We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included: −Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud; −Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; −Challenging assumptions and judgements made by management in its significant accounting estimates; and −Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations. ∙As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: −The application of inappropriate judgements or estimation to manipulate the Company's financial position; −Posting of unusual journals and complex transactions; and −The use of management override of controls to manipulate results, or to cause the Company to enter into transactions not in its best interests. Page 7
EGIS ROAD OPERATION M40 LIMITED INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF EGIS ROAD OPERATION M40 LIMITED (CONTINUED) 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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: 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. Caroline Milton (Senior Statutory Auditor) for and on behalf of Menzies LLP Chartered Accountants Statutory Auditor 2nd Floor, Origin One 108 High Street Crawley RH10 1BD 10 March 2026 Page 8
EGIS ROAD OPERATION M40 LIMITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024
|  |  |  |  | As restated
|  |  |  | 2024 | 2023
|  |  | Note | £ | £
Revenue | 5 | 16,781,118 | 14,698,093
Cost of sales |  | (14,270,826) | (14,658,830)
Gross profit |  | 2,510,292 | 39,263
Other operating income/(expense) |  | (1,039,293) | 776,964
Administrative expenses |  | (698,675) | (176,999)
Profit from operations |  | 772,324 | 639,228
Finance income | 9 | 152,628 | 67,778
Finance expense | 9 | (26,324) | (63,035)
Profit before tax |  | 898,628 | 643,971
Tax expense | 10 | (304,197) | (60,122)
Total comprehensive income |  | 594,431 | 583,849
The notes on pages 14 to 36 form part of these financial statements.
Page 9
EGIS ROAD OPERATION M40 LIMITED REGISTERED NUMBER: 11230849 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024
|  | As restated
| 2024 | 2023
Note | £ | £
Assets |  |
Non-current assets |  |  |
Property, plant and equipment | 12 | 500,625 | 908,256
Intangible assets | 11 | 943,233 | 1,395,985
Deferred tax assets | 10 | 52,632 | 194,953
|  | 1,496,490 | 2,499,194
Current assets |  |  |
Inventories | 13 | 315,347 | 257,660
Trade and other receivables | 14 | 6,485,222 | 3,221,896
Cash and cash equivalents | 24 | 1,786,774 | 2,598,298
|  | 8,587,343 | 6,077,854
Total assets |  | 10,083,833 | 8,577,048
Non-current liabilities |  |  |
Lease liabilities | 16 | 161,947 | 386,351
|  | 161,947 | 386,351
Current liabilities |  |  |
Bank overdraft | 24 | 12,867 | -
Trade and other liabilities | 15 | 3,534,568 | 2,124,198
Lease liabilities | 16 | 178,346 | 464,825
|  | 3,725,781 | 2,589,023
Total liabilities |  | 3,887,728 | 2,975,374
Net assets |  | 6,196,105 | 5,601,674
Page 10
EGIS ROAD OPERATION M40 LIMITED REGISTERED NUMBER: 11230849 STATEMENT OF FINANCIAL POSITION (CONTINUED) AS AT 31 DECEMBER 2024
|  | As restated
| 2024 | 2023
Note | £ | £
Issued capital and reserves |  |  |
Share capital | 18 | 1 | 1
Retained earnings |  | 6,196,104 | 5,601,673
Total Equity |  | 6,196,105 | 5,601,674
The financial statements on pages 9 to 36 were approved and authorised for issue by the board of directors and were signed on its behalf by:
X R P Odolant
Director
Date: 10 March 2026
The notes on pages 14 to 36 form part of these financial statements. Page 11
EGIS ROAD OPERATION M40 LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
| Share capital | Retained earnings | Total equity
| £ | £ | £
At 1 January 2023 | 1 | 5,017,824 | 5,017,825
Comprehensive income for the year |  |  |
Profit for the year | - | 583,849 | 583,849
Total comprehensive income for the year | - | 583,849 | 583,849
At 31 December 2023 | 1 | 5,601,673 | 5,601,674
At 1 January 2024 | 1 | 5,601,673 | 5,601,674
Comprehensive income for the year |  |  |
Profit for the year | - | 594,431 | 594,431
Total comprehensive income for the year | - | 594,431 | 594,431
At 31 December 2024 | 1 | 6,196,104 | 6,196,105
The notes on pages 14 to 36 form part of these financial statements.
Page 12
EGIS ROAD OPERATION M40 LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024
|  |  |  |  | As restated
|  |  |  | 2024 | 2023
|  |  | Note | £ | £
Cash flows from operating activities |  |  |
Profit for the year |  | 594,431 | 583,849
Adjustments for |  |  |
Depreciation of tangible assets | 12 | 331,364 | 536,959
Amortisation of intangible fixed assets | 11 | 452,752 | 434,285
Loss/(gain) on disposal of fixed assets | 11 | (64,833) | (6,771)
Non cash movements relating to lease adjustments |  | 333,892 | -
Interest charge |  | 26,324 | 63,035
Interest receivable |  | (23,235) | (67,778)
Taxation charge |  | 304,197 | 60,122
(Increase)/decrease in stock |  | (57,687) | 75,211
(Increase)/decrease in debtors |  | (3,446,784) | (555,599)
Increase/(decrease) in creditors |  | 1,845,004 | (739,356)
Tax (paid)/received |  | (513,210) | (116,652)
|  | (217,785) | 267,305
Cash generated from operations |  | (217,785) | 267,305
Net cash (used in)/from operating activities |  | (217,785) | 267,305
Cash flows from investing activities |  |  |
Purchase of tangible fixed assets |  | (257,625) | -
Sale of tangible fixed assets |  | 64,833 | 54,700
Interest received |  | 123,393 | 67,778
Net cash (used in)/from investing activities |  | (69,399) | 122,478
Cash flows from financing activities |  |  |
New/repayment of finance leases |  | (510,883) | (522,427)
Interest paid on finance lease |  | (26,324) | (63,035)
Net cash used in financing activities |  | (537,207) | (585,462)
Net decrease in cash and cash equivalents |  | (824,391) | (195,679)
Cash and cash equivalents at the beginning of year |  | 2,598,298 | 2,793,977
Cash and cash equivalents at the end of the year | 24 | 1,773,907 | 2,598,298
The notes on pages 14 to 36 form part of these financial statements. Page 13
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
1. | General information
Egis Road Operation M40 Limited ("the Company") is a private company limited by shares, incorporated and domiciled in the UK and registered in England and Wales. The registered office can be found on the Company Information page. The principal place of business is Unit 15, Wildmere Road, Banbury, OX16 3JU. 2.Accounting policies
| 2.1 | Basis of financial statements
The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretation as adopted by the UK (collectively IFRSs). The financial information has been prepared in Sterling (£), the functional currency of the Company and rounded to the nearest £, being the functional currency of the Company. The accounting policies set out below have been applied consistently by the Company to all periods presented in these financial statements.
| 2.2 | Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Statement of Financial Position date are translated to GBP at the foreign exchange ruling at that date. Foreign exchange differences arising on translation are recognised in the Statement of Comprehensive Income.
| 2.3 | Going concern
The directors have assessed the company’s ability to continue as a going concern for a period of at least 12 months from the date of approval of these financial statements. The Company’s only revenue-generating contract is scheduled to be completed in January 2027. The directors have performed a review of the future pipeline and are satisfied that the Company will continue trading for the foreseeable future through additional works from future contracts and/or any additional variations or extensions of the existing contract. The directors have confirmed that the Company will continue to meet its liabilities as they fall due and contractual obligations and operations will continue until the completion of the existing contract. Further, the parent company has confirmed that they are willing and able to provide financial support as required to enable the Company to meet its obligations. Accordingly, the going concern basis of accounting has been used in preparing the financial statements.
| 2.4 | Revenue
In relation to revenue based on the fixed price operation and maintenance contract, partial payments received on this contract, before the corresponding works have been completed, are recognised in contract liabilities. A contract asset arises when the company transfers the services to the customer before it has an unconditional right to consideration under the main contract. This is disclosed as accrued income in the statement of financial position. Revenue is recognised on ad-hoc major maintenance as and when the work is completed. The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
| 2.5 | Financial instruments
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments. Page 14
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued) Financial assets Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Financial assets are classified into the following specified categories: financial assets at fair value through profit or loss; held-to-maturity investments; loans and receivables; and available-for-sale financial assets. The classification depends on the nature and purpose for which these financial assets were acquired and is determined at the time of initial recognition. Loans and receivables The Company’s loans and receivables comprise trade and other receivables, amounts due from group and related parties and bank balances. Such loans and receivables are non-derivatives with fixed or determinable payments that are not quoted in an active market. They are measured at amortised cost, using the effective interest method less impairment. Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. Impairment of financial assets The Company always recognises lifetime Expected Credit Losses (“ECL”) for amounts due from trade receivables. The ECL on these financial assets are estimated using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to the receivables, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. When there has not been a significant increase in credit risk since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL which represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date; except for assets for which simplified approach was used. The Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date. A financial instrument is determined to have low credit risk if: (a) The financial instrument has a low risk of default, (b) The debtor has a strong capacity to meet its contractual cash flow obligations in the near term, and (c) Adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations. The Company considers a financial asset to have low credit risk when the asset has external credit rating of ‘investment grade’ in accordance with the globally understood definition or if an external rating is not available, the asset has an internal rating of ‘performing’. Performing means that the counterparty has a strong financial position and there is no past due amounts. Page 15
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
|  | Financial assets (continued)
Derecognition of financial assets The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset 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 financial asset, the company continues to recognise the financial asset and also recognises a collateralised bonowing for the proceeds receivables.
| Financial liabilities and equity
Classification as debt or equity Debt and equity instruments issued by an 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. Equity instruments 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 an entity are recognised at the fair value, net of direct issue costs. Ordinary share capital Ordinary share capital is classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity. Share premium The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses.
| (i) Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. Other financial liabilities Trade and other payables Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, where applicable, using the effective interest method, with interest expense recognised on an effective yield basis. Derecognition of financial liabilities The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. Page 16
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.6 | Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:
|  | Plant and machinery | 33%
|  | Fixtures and fittings | 33%
|  | Computer equipment | 33%
|  | Right of use assets | Lower of the useful life of the asset or the lease term
Depreciation is charged to cost of sales in the Statement of comprehensive income.
| 2.7 | Intangible assets
Intangible assets are stated at cost less accumulated amortisation and impairment losses. The intangible asset represents the contract value acquired. The contract is amortised on a straight line basis over its useful life, being 8.75 years. Amortisation is charged to the Statement of comprehensive income.
| 2.8 | Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, 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). Intangible assets are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs of disposal 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. When an impairment loss subsequently reverses, the carrying amount of the asset (or a 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. Page 17
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.9 | Current and deferred taxation
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the Statement of Comprehensive Income except to the extent that it relates to items recognised directly to equity, where it is recognised in equity. Current tax is the expected tax payable on the taxable profit for the year, using tax rates enacted or substantially enacted at the Statement of financial position date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the Statement of financial position liability method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes and differences arising on the initial recognition of assets or liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the Statement of financial position date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
| 2.10 | Other retirement benefits
The Company is part of the parent company’s pension plans which cover certain Company employees through contributions to defined contribution schemes. The amount charged to the Statement of Comprehensive Income in respect of pension costs is the amount payable in the year. Differences between contributions payable in the year and contributions actually paid are included in either debtors or creditors in the Statement of Financial Position.
| 2.11 | Leasing
At inception of a contract, the company assesses whether a contract is, or contains, a lease. 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. The Company recognises a right-of-use asset and a lease liability at the lease commencement date. 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 incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. 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 property and equipment. In addition, 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 not paid 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. Generally, the company uses its incremental borrowing rate as the discount rate. Page 18
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.11 | Leasing (continued)
| The Company as a lessee (continued)
Lease payments included in the measurement of the lease liability comprise: ∙fixed lease payments (including in-substance fixed payments), less any lease incentives; ∙variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date; and ∙the amount expected to be payable by the lessee under residual value guarantee. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee. 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 presents right-of-use assets that do not meet the definition of investment property in 'property, plant and equipment', and lease liabilities in trade and other payables in the statement of financial position. Right-of-use asset of office rentals is presented under ‘property, plant and equipment’. The movement of right-of-use of the assets of the company during the years is disclosed in Note 12. Short-term leases and leases of low-value assets The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of offices and licenses that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
| 2.12 | Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Page 19
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
3. | Accounting estimates and judgements
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. 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 year 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. Key sources of estimation uncertainty The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows: Accrued income relating to insurance recovery The directors apply judgement regarding the estimated value of future insurance claims based on historical performance regarding recoveries. The current year recovery rate has been estimated at 94%. Revenue indexation The directors apply judgement regarding the estimated monthly Operation & Maintenance Incident Service Unit revenue based on anticipated indexation of the BCIS Civil Engineering Series of Indexation. When the information is available, the directors either receive of pay the customer for the balancing amount between the estimate and the actual. Incremental borrowing rate Where the interest rate in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the company estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of similar value to the right-to-use asset, with similar terms, security and economic environment. S tage of completion Revenue is recognised on a percentage of completion basis using costs as the input basis, when the outcome of the project can be reasonably foreseen. The directors note that under the percentage completion method there is estimation around the total forecast costs required to complete the project. The directors consider that using cost as the basis for measurement appropriate, as this is the most meaningful way to assess progress towards complete satisfaction of the performance obligations under IFRS 15.
4. | New standards and interpretations
The following new standards, interpretations and amendments, which are not yet effective and have not been adopted early in these financial statements, are not anticipated to have a material impact on the Company financial statements in the period of initial application: IAS 21 - Lack of exchangeability - amendments - 1 January 2025 Amendments to the SASB standards to enhance their international applicability - 1 January 2025 Page 20
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
5. | Revenue
| The following is an analysis of the Company's revenue for the year from continuing operations:
|  |  |  |  |  | As restated
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Operation and maintenance | 15,911,204 | 13,280,138
| Insurance recovery | 869,914 | 1,417,955
|  | 16,781,118 | 14,698,093
| Analysis of revenue by country of destination:
|  |  |  |  |  | As restated
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| United Kingdom | 16,781,118 | 14,698,093
|  | 16,781,118 | 14,698,093
6. | Operating profit
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Depreciation of property, plant and equipment | 331,364 | 536,959
| Amortisation of intangible assets | 452,752 | 434,285
| Stock recognised as an expense | 564,994 | 211,376
| (Profit)/Loss on disposal of property, plant and equipment | (64,883) | (6,771)
7. | Auditor's remuneration
| During the year, the Company obtained the following services from the Company's auditor:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Fees payable to the Company's auditor for the audit of the Company's financial statements | 27,600 | 26,000
| The audit remuneration is borne within another company of the Egis Group.
Page 21
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
8. | Staff costs
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Employee benefit expenses comprise: |  |
| Wages and salaries | 4,468,042 | 4,578,899
| Social welfare costs | 481,643 | 464,472
| Pension costs | 138,886 | 142,919
|  | 5,088,571 | 5,186,290
| During the year, there was no directors remuneration (2023: £nil).
| Key management personnel compensation Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including the directors of the Company listed on page 1.
| The monthly average persons, including the directors, employed by the Company during the year was as follows:
|  |  |  |  | 2024 | 2023
| Operatives | 65 | 71
| Management | 13 | 14
| Administration | 29 | 28
|  | 107 | 113
Page 22
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
9. | Finance income and expense
| Recognised in profit or loss
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
Finance income |  |
| Interest on: |  |
| - Bank deposits | 86,604 | 67,778
| Total interest income arising from financial assets measured at amortised cost | 86,604 | 67,778
| Interest receivable from group companies | 66,024 | -
| Total finance income | 152,628 | 67,778
| Finance expense |  |
| Interest on lease liabilities | 26,324 | 63,035
| Total finance expense | 26,324 | 63,035
| Net finance income recognised in profit or loss | 126,304 | 4,743
Page 23
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
10. | Tax expense
| 10.1 Income tax recognised in profit or loss
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Current tax |  |
| Current tax on profits for the year | 246,441 | 255,075
| Adjustments in respect of prior years | (84,565) | -
| Total current tax | 161,876 | 255,075
| Deferred tax expense |  |
| Origination and reversal of timing differences | 139,561 | (194,953)
| Adjustments in respect of prior years | 2,760 | -
| Total deferred tax | 142,321 | (194,953)
|  | 304,197 | 60,122
| Total tax expense |  |
| Tax expense | 304,197 | 60,122
|  | 304,197 | 60,122
| The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Profit for the year | 594,431 | 583,849
| Income tax expense (including income tax on associate, joint venture and discontinued operations) | 304,197 | 60,122
| Profit before income taxes | 898,628 | 643,971
| Tax using the Company's domestic tax rate of 25% (2023:23.52%) | 224,657 | 151,462
| Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment | 200 | 15,826
| Capital allowances for the year in excess of depreciation | 171,145 | 102,146
| Other tax adjustments, reliefs and transfers | (10,000) | -
| Movement in deferred tax not recognised | - | (210,215)
| Adjustments to tax charge in respect of prior periods | (84,565) | -
| Adjustments to tax charge in respect of previous periods - deferred tax | 2,760 | -
| Remeasurement of deferred tax for changes in tax rates | - | 903
| Total tax expense | 304,197 | 60,122
Page 24
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
11. | Intangible assets
|  | Contract costs
|  | £
| Cost |
| At 1 January 2023 | 3,864,930
| At 31 December 2023 | 3,864,930
| At 31 December 2024 | 3,864,930
| Accumulated amortisation |
| At 1 January 2023 | 2,034,660
| Charge for the year | 434,285
| At 31 December 2023 | 2,468,945
| Charge for the year | 452,752
| At 31 December 2024 | 2,921,697
| Net book value |
| At 1 January 2023 | 1,830,270
| At 31 December 2023 | 1,395,985
| At 31 December 2024 | 943,233
12. | Property, plant and equipment
|  | Right of use | Fixtures and fittings | Computer equipment | Plant and machinery | Total
|  | £ | £ | £ | £ | £
| Cost or valuation |  |  |  |  |
| At 1 January 2023 | 2,819,293 | 31,802 | 55,211 | 263,200 | 3,169,506
| Disposals | (132,510) | - | - | - | (132,510)
| At 31 December 2023 | 2,686,783 | 31,802 | 55,211 | 263,200 | 3,036,996
| Additions | - | - | - | 73,528 | 73,528
| Disposals | (299,279) | - | - | (50,000) | (349,279)
| Transfers between classes | (736,386) | - | - | 736,386 | -
| At 31 December 2024 | 1,651,118 | 31,802 | 55,211 | 1,023,114 | 2,761,245
Page 25
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 12.Property, plant and equipment (continued)
| Accumulated depreciation and impairment |  |  |  |  |
| At 1 January 2023 | 1,408,075 | 6,275 | 55,211 | 206,801 | 1,676,362
| Charge for the year | 502,763 | 22,362 | - | 11,834 | 536,959
| Disposals | (84,581) | - | - | - | (84,581)
| At 31 December 2023 | 1,826,257 | 28,637 | 55,211 | 218,635 | 2,128,740
| Charge for the year | 264,841 | 3,165 | - | 63,358 | 331,364
| Disposals | (193,031) | - | - | (6,453) | (199,484)
| Transfers between classes | (552,290) | - | - | 552,290 | -
| At 31 December 2024 | 1,345,777 | 31,802 | 55,211 | 827,830 | 2,260,620
| Net book value |  |  |  |  |
| At 1 January 2023 | 1,411,218 | 25,527 | - | 56,399 | 1,493,144
| At 31 December 2023 | 860,526 | 3,165 | - | 44,565 | 908,256
| At 31 December 2024 | 305,341 | - | - | 195,284 | 500,625
13. | Inventories
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Spare parts | 315,347 | 257,660
Page 26
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
14. | Trade and other receivables
|  | 2024 | As restated 2023
|  | £ | £
| Current |  |
| Trade receivables | 134,385 | -
| Trade receivables - net | 134,385 | -
| Receivables from related parties | 2,600,000 | 700,656
| Total financial assets other than cash and cash equivalents classified as loans and receivables | 2,734,385 | 700,656
| Prepayments | 80,070 | 102,824
| Accrued income | 3,249,543 | 2,037,355
| Other receivables | 421,224 | 381,061
| Total current trade and other receivables | 6,485,222 | 3,221,896
| At 31 December 2024, the Company has reviewed the lifetime Expected Credit Losses (“ECL”). The ECL is based on the company’s historical credit loss experience, adjusted for factors that are specific to the receivables. The ECL is deemed to be £60,000 (2023: £Nil).
15. | Trade and other payables
|  | 2024 | As restated 2023
|  | £ | £
| Current |  |
| Trade payables | 976,595 | 214,395
| Payables to related parties | 1,412,555 | 243,718
| Accruals | 658,292 | 925,892
| Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost | 3,047,442 | 1,384,005
| Other payables - tax and social security payments | 487,126 | 740,193
| Total current trade and other payables | 3,534,568 | 2,124,198
Page 27
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
16. | Loans and borrowings
|  | 2024 | 2023
|  | £ | £
| Non-current |  |
| Lease liabilities | 161,947 | 386,351
|  | 161,947 | 386,351
| Current |  |
| Overdrafts | 12,867 | -
| Lease liabilities | 178,346 | 464,825
|  | 191,213 | 464,825
| Total loans and borrowings | 353,160 | 851,176
Page 28
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
17. | Leases
| (i) Leases as a lessee
| Lease liabilities are due as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Contractual undiscounted cash flows due |  |
| Not later than one year | 161,947 | 386,351
| Between one year and five years | 178,346 | 464,825
|  | 340,293 | 851,176
| Lease liabilities included in the Statement of Financial Position at 31 December | 340,293 | 851,176
| Non-current | 161,947 | 386,351
| Current | 178,346 | 464,825
| The movement in the Company's lease liability is as follows:
|  |  |  | 2024 | 2023
|  |  |  | £ | £
| Opening liability | 851,176 | 1,373,603
| Lease liability disposed | (165,925) | -
| Interest for the year | 26,324 | 63,035
| Payment on finance lease | (342,233) | (505,638)
| Operating lease expense for the year | (29,048) | (79,824)
| Closing lease liability | 340,293 | 851,176
| The operating lease terms are for periods of 36-60 months. The effective interest rates charged during the financial year is 6% per annum which reflects the incremental borrowing rate of the Company. The movement of the carrying amount of right-of-use assets of the Company at the start and end of each reporting period is disclosed in Note 12.
Page 29
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
18. | Share capital
| Authorised |
|  | 2024 | 2024 | 2023 | 2023
|  | Number | £ | Number | £
| Shares treated as equity |  |  |  |
| Ordinary shares of £1.00 each | 1 | 1 | 1 | 1
|  | 1 | 1 | 1 | 1
| Issued and fully paid |
|  | 2024 | 2024 | 2023 | 2023
|  | Number | £ | Number | £
| Ordinary shares of £1.00 each |  |  |  |
| At 1 January and 31 December | 1 | 1 | 1 | 1
Page 30
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
19. | Related party transactions
|  |  |  |  | 2024 | 2023*
|  |  |  |  | £ | £
| Amounts owed from group undertakings |  |
| Egis Projects SAS | - | 700,656
| Egis SA | 2,600,000 | -
| Total | 2,600,000 | 700,656
| During the year, the company recognised an expense of £1,039,293 (2023: income of £776,964) from Egis Projects SAS.
| Amounts owed from group undertakings are in connection with an intragroup cash pooling arrangement which is unsecured, attracts interest at 4.40% on the net receivable, and repayable on demand. Intercompany trading balances are unsecured, interest free and repayable on demand.
|  |  |  |  | 2024 | 2023*
|  |  |  |  | £ | £
| Amounts owed to group undertakings |  |
| Egis Road Operations SA | 57,509 | 57,509
| Egis UK - Consulting and Engineering Limited | 62,082 | 110,204
| Egis SA | - | 61,339
| Egis Transport Solutions Limited | 1,703 | -
| Egis Mobility IBI Egis Limited | - | 14,666
| Egis Projects SAS | 1,268,126 | -
| Egis Projects UK Limited | 23,135 | -
| Total | 1,412,555 | 243,718
| During the year, the company incurred the following expenses with companies under common control: £233,790 in relation to services provided by Egis Projects UK Limited £787 in relation to services provided by Egis Project Ireland £1,933 in relation to services provided by Egis Road Operations UK Limited £31,711 in relation to services provided by Egis Road Operations SA £124,915 in relation to services provided by Egis Projects SAS £22,336 in relation to services provided by Egis SA *During the preparation of the financial statements for the year-ended 31 December 2024, it was noted that amounts owed from group had been erroneously disclosed as amounts owed to group and vice versa. This did not affect the underlying figures in the Statement of Financial Position.
20. | Change in accounting policy
The Company has voluntarily corrected its accounting policy for the classification of management charges from cost of sales to administrative expenses. The new policy has been applied to show a more representative classification of the nature of these costs. This has led to a reclassification of cost of sales to administrative expenses of £698,675 (2023: £176,999). There has been no impact to retained earnings, current tax or deferred tax as a result of a change in accounting policy. Page 31
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
21. | Prior period adjustment
The Company has adjusted the prior period contract balances as there was an error relating to the classification of these items. As per IFRS 15 a contract must present a single contract asset or liability as a net figure. In the prior year accounts, there were separate contract asset balances of £1,149,640 and contract liabilities of £619,020, however the two should have been presented net and so the classification of these has been adjusted in notes 14 and 15 of the financial statements. There has been no impact to retained earnings, current tax or deferred tax as a result of the prior period adjustment. During the year-ended 31 December 2024, it was identified that material intercompany recharges had been incorrectly included as revenue in the financial statements for the year-ended 31 December 2023. An adjustment has been made to correct the error of £776,964 and to include these as other operating expenses, affecting note 5 of the financial statements. There has been no impact to retained earnings, current tax or deferred tax as a result of this adjustment.
| Statement of financial position Year ended 31 December 2023
|  | As previously stated | Restated | Adjustment
|  | £ | £ | £
| Assets |  |  |
| Property, plant and equipment | 908,256 | 908,256 | -
| Intangible assets | 1,395,985 | 1,395,985 | -
| Deferred tax asset | 194,953 | 194,953 | -
| Inventories | 257,660 | 257,660 | -
| Trade and other receivables | 3,840,916 | 3,221,896 | (619,020)
| Cash and cash equivalents | 2,598,298 | 2,598,298 | -
| Lease liabilities > 1 year | (386,351) | (386,351) | -
| Trade and other payables | (2,124,198) | (2,124,198) | -
| Contract liabilities | (619,020) | - | 619,020
| Lease liabilities < 1 year | (464,825) | (464,825) | -
| Net assets | 5,601,674 | 5,601,674 | -
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EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
21. | Prior period adjustment (continued)
| Statement of profit or loss Year ended 31 December 2023
|  | As previously stated | Restated | Adjustment
|  | £ | £ | £
| Revenue | 15,475,057 | 14,698,093 | (776,964)
| Cost of sales | (14,835,829) | (14,658,830) | 176,999
| Other operating income/(expense) | - | 776,964 | 776,964
| Administrative expenses | - | (176,999) | (176,999)
| Finance income | 67,778 | 67,778 | -
| Finance expenses | (63,035) | (63,035) | -
| Tax expense | (60,122) | (60,122) | -
|  | 583,849 | 583,849 | -
| 22. | Financial instruments - fair values and risk management
| The Company recognises financial instruments in line with IFRS 9 Financial Instruments.
Exposure to credit, liquidity and interest rate risk arises in the normal course of the Company’s business. The Company has little exposure to foreign currency risk as purchases and sales are predominantly transacted in UK Sterling. Insignificant transactions in other currencies are not hedged in any way by the use of derivative contracts. If the Company's operations were to change such that trading in foreign currencies was to reach a significant level; then the directors would review the current policies in place. Interest rate risk The Company is exposed to interest rate fluctuations in respect of interest earned on its cash deposits and paid on its borrowing. Sensitivity analysis In managing interest rate risk the Company aims to reduce the impact of short-term fluctuations on the Company’s earnings. Over the long term, however, permanent changes in interest rates would have an impact on earnings. At 31 December 2024, it is estimated that a general increase of one percentage point in interest rates would not have a material effect on the Company’s earnings. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, both under normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. Page 33
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 22.Financial instruments - fair values and risk management (continued)
| (continued)
Fair values The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial instruments whose carrying amount approximate fair value. Management has determined that the carrying amounts of cash and bank balances, trade and other receivables and trade and other payables reasonably approximate their fair values because these are mostly short-term in nature. The fair values of other classes of financial assets and liabilities are disclosed in their respective notes to these financial statements. Credit risk Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Company, as and when they fall due. The Company’s exposure to credit risk is minimal as they are largely transacting with one company. Management has a credit policy in place and exposure to credit risk is monitored on an ongoing basis. At 31 December 2024, the company has reviewed the lifetime Expected Credit Losses (“ECL”). The ECL is based on the company’s historical credit loss experience, adjusted for factors that are specific to the receivables. The ECL is deemed to be £60,000 (2023: £Nil). The following are contractual maturities of financial liabilities, including interest payments and excluding the impact of netting arrangements: Page 34
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 22.Financial instruments - fair values and risk management (continued) Cash Pooling Arrangement The Company participates in a Group cash pooling arrangement. Under this arrangement, surplus cash of participating entities are transferred to a central account, managed by Egis SA. Amounts owed from or to the pool are presented as intercompany receivables or payables as the Company does not have legal title to the pooled funds. These balances are measured at amortised cost in accordance with IFRS 9 and are subject to the expected credit loss model. At year-end, the Company had a net receivable of £2,600,000 (2023: £NIL) from the cash pool. Access to these funds is subject to Group Treasury policies and may be restricted for local use. Page 35
EGIS ROAD OPERATION M40 LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
23. | Controlling party
The Company is a subsidiary of Egis Operations SAS. The Company’s ultimate parent company is Egis SA. The consolidated accounts can be obtained from their registered office - 15 Avenue Du Centre, 78286 Guayancourt Cedex, France.
24. | Notes supporting statement of cash flows
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Cash at bank available on demand | 1,786,774 | 2,598,298
| Cash and cash equivalents in the statement of financial position | 1,786,774 | 2,598,298
| Bank overdrafts used for cash management purposes | (12,867) | -
| Cash and cash equivalents in the statement of cash flows | 1,773,907 | 2,598,298
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