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REGISTERED NUMBER: 04171774 (England and Wales)










GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2023

FOR

ERG PROCESS TECHNOLOGIES LIMITED

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023










Page

Group Strategic Report 1

Report of the Directors 3

Report of the Independent Auditors 4

Consolidated Statement of Income and Retained
Earnings

6

Consolidated Balance Sheet 7

Company Balance Sheet 8

Consolidated Cash Flow Statement 9

Notes to the Consolidated Financial Statements 10


ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023


The directors present their strategic report for the year ended 28 February 2023.

Review of business performance
Overall consolidated group sales reported for the year are £12,987,926. This is a 19% decrease compared to sales the previous year of £16,084,741. This follows on from two successive years of significant top line growth of greater than 25% year on year, and primarily reflects the cyclic nature of the underlying large projects undertaken during the year, rather than a business downturn.

Included in the above top line sales are £2,349,526 arising from the company's own trading activity, which generated a profit before tax of £543,954.

Trading conditions during the year have been marked by inflationary pressures, price instability and high interest rates. The group has largely been successful in being able to navigate through these headwinds and pass on price increases to customers and to actually increase our overall gross profit margins. The group's strong financial position and tight cash management has minimised working capital borrowing cost pressures from interest rates.

The board therefore is confident in asserting that the business has a solid foundation and is well-placed for future growth.

- The Projects division has continued its strategy for growth in industrial air pollution contracts. These have a
high technology and engineering design content and generate higher margins. The group's thermal systems
technology and engineering expertise have also been significant in winning business where clients require total
systems solutions and has given ERG a competitive advantage.

- The Middle East division continues to be an important contributor to the group strategy and its performance.
Following the ending of several 2022 FIFA World Cup infrastructure projects in Qatar, the Middle East team are
now fully focussed on the twin strategy of repeat business with current customers as well as extending the
customer base, and during the year have been successful in gaining more contracts in Saudi Arabia and
winning our first contract in Algeria.

- The Maintenance division continues to perform in line with expectation and remains a key business bedrock
with steady income flow and solid gross margins. It also acts as an important generator for new project sales
for our UK odour control projects.

- The Plastic Fabrication division continues to support the Projects division supplying the majority of the
specialist plastic fabrication required for their projects. Vertical integration with regard to plastic fabrication
continues to prove a successful strategy, and the Plastic Fabrication division continues to perform a vital role
within the group and allows ERG to control and maintain high quality manufacturing. The physical location of
the new factory workshop on the same site as the new group HQ offices at Slinfold has given the expected
benefits of better manufacturing scheduling and quality control.

- For completion the group also includes ERG APC Property Ltd., as a special purpose vehicle that was created
purely to acquire, build and manage the company's property estate. It has no trading role.

Research and Development
ERG has carried out a number of projects qualifying for R&D tax credit. These include the development, design and implementation of novel techniques and equipment/system solutions for treating specific air pollution control challenges for a variety of customers and conducting pilot scale trials on behalf of customers to establish the ideal approach for their pollution problems.

Risks and uncertainties
In line with standard practice in our industry, ERG accrues provisions for possible post commissioning challenges in the plants we supply and install. These provisions are kept under review by the board, and the directors think that the current provisions level offers appropriate cover for any foreseeable costs.

In order to undertake the volume of international export contracts that we win, ERG enjoys the support of our corporate bankers, HSBC. HSBC continues to support ERG through the provision of trading facilities which include credit lines for: bank guarantees, import letters of credit and working capital loans secured against confirmed export letters of credit. With ERG's many years of export experience, together with access to the expertise of HSBC's international trade relationship directors, ERG is content that any risks are identified, and appropriate mitigated,

ERG benefits from a 15 year capital repayment mortgage that was taken out to enable site purchase and construction of a new purpose built office and factory. The mortgage is on normal commercial terms, and the loan to value ratio is well under the maximum bank limits for the type of property.

Branches

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023

The group has branches in Jordan and in Dubai.

ON BEHALF OF THE BOARD:





J R Scott-Bowden - Director


28 November 2023

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 28 FEBRUARY 2023


The directors present their report with the financial statements of the company and the group for the year ended 28 February 2023.

DIVIDENDS
The total distribution of dividends for the year ended 28 February 2023 will be £ 163,217 .

DIRECTORS
The directors shown below have held office during the whole of the period from 1 March 2022 to the date of this report.

J R Scott-Bowden
R J Hanson
P I Batt

Other changes in directors holding office are as follows:

E J Hooper was appointed as a director after 28 February 2023 but prior to the date of this report.

DISCLOSURE IN THE STRATEGIC REPORT
The company has chosen, in accordance with the Companies Act 2006 s414C(11), to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

ON BEHALF OF THE BOARD:





J R Scott-Bowden - Director


28 November 2023

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ERG PROCESS TECHNOLOGIES LIMITED


Opinion
We have audited the financial statements of ERG Process Technologies Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 28 February 2023 which comprise the Consolidated Statement of Income and Retained Earnings, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the group's and of the parent company affairs as at 28 February 2023 and of the group's profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent 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 directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

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:
- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
- the parent company financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ERG PROCESS TECHNOLOGIES LIMITED


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the company and industry, we considered the risk of non-compliance with laws and regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls). Audit procedures performed included:

- Enquiring of management whether there were instances of non-compliance with laws and regulation or fraud;
- Review of legal expenses for evidence of fees relating to non-compliance;
- Reviewing journal entries, non-sales bank receipts and non-purchase bank payments for unusual accounting entries; and
- Reviewing contracts to confirm that revenue had been correctly recognised.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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 Report of the Auditors.

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 a Report of the Auditors 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.




Colin Young BA FCA (Senior Statutory Auditor)
for and on behalf of Galloways Accounting
Statutory Auditor
Atlas Chambers
33 West Street
Brighton
East Sussex
BN1 2RE

29 November 2023

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

CONSOLIDATED
STATEMENT OF INCOME AND
RETAINED EARNINGS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2023 2022
Notes £    £   

TURNOVER 3 12,987,926 16,084,741

Cost of sales (8,342,694 ) (12,189,624 )
GROSS PROFIT 4,645,232 3,895,117

Administrative expenses (4,056,018 ) (3,506,573 )
OPERATING PROFIT 5 589,214 388,544

Interest receivable and similar income 6,189 274
595,403 388,818

Interest payable and similar expenses 6 (88,676 ) (51,494 )
PROFIT BEFORE TAXATION 506,727 337,324

Tax on profit 7 (64,269 ) (16,206 )
PROFIT FOR THE FINANCIAL YEAR 442,458 321,118

Retained earnings at beginning of year 1,646,015 1,435,632

Dividends 9 (163,217 ) (110,735 )

RETAINED EARNINGS FOR THE GROUP
AT END OF YEAR

1,925,256

1,646,015

Profit attributable to:
Owners of the parent 442,458 321,118

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

CONSOLIDATED BALANCE SHEET
28 FEBRUARY 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 10 - -
Tangible assets 11 4,480,273 4,549,912
Investments 12 - -
4,480,273 4,549,912

CURRENT ASSETS
Stocks 13 39,972 39,599
Debtors 14 4,065,473 3,123,280
Cash at bank and in hand 1,485,812 1,880,984
5,591,257 5,043,863
CREDITORS
Amounts falling due within one year 15 5,820,793 5,533,342
NET CURRENT LIABILITIES (229,536 ) (489,479 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

4,250,737

4,060,433

CREDITORS
Amounts falling due after more than one
year

16

(2,126,971

)

(2,148,507

)

PROVISIONS FOR LIABILITIES 21 (148,510 ) (215,911 )
NET ASSETS 1,975,256 1,696,015

CAPITAL AND RESERVES
Called up share capital 22 50,000 50,000
Retained earnings 1,925,256 1,646,015
SHAREHOLDERS' FUNDS 1,975,256 1,696,015

The financial statements were approved by the Board of Directors and authorised for issue on 28 November 2023 and were signed on its behalf by:





J R Scott-Bowden - Director


ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

COMPANY BALANCE SHEET
28 FEBRUARY 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 10 - -
Tangible assets 11 - -
Investments 12 102 102
102 102

CURRENT ASSETS
Debtors 14 1,044,008 1,787,853
Cash at bank 200,255 743,019
1,244,263 2,530,872
CREDITORS
Amounts falling due within one year 15 390,074 1,992,974
NET CURRENT ASSETS 854,189 537,898
TOTAL ASSETS LESS CURRENT
LIABILITIES

854,291

538,000

CAPITAL AND RESERVES
Called up share capital 22 50,000 50,000
Retained earnings 804,291 488,000
SHAREHOLDERS' FUNDS 854,291 538,000

Company's profit for the financial year 479,508 246,023

The financial statements were approved by the Board of Directors and authorised for issue on 28 November 2023 and were signed on its behalf by:





J R Scott-Bowden - Director


ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 28 FEBRUARY 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 27 637,634 3,095,235
Interest paid (88,676 ) (51,494 )
Tax paid 43,908 276,112
Net cash from operating activities 592,866 3,319,853

Cash flows from investing activities
Purchase of tangible fixed assets (108,050 ) (921,720 )
Sale of tangible fixed assets 5,208 833
Interest received 6,189 274
Net cash from investing activities (96,653 ) (920,613 )

Cash flows from financing activities
New loans in year - 2,325,000
Loan repayments in year (729,276 ) (3,623,840 )
Amount introduced by directors 1,108 40,454
Equity dividends paid (163,217 ) (110,735 )
Net cash from financing activities (891,385 ) (1,369,121 )

(Decrease)/increase in cash and cash equivalents (395,172 ) 1,030,119
Cash and cash equivalents at beginning
of year

28

1,880,984

850,865

Cash and cash equivalents at end of year 28 1,485,812 1,880,984

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023


1. STATUTORY INFORMATION

ERG Process Technologies Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address are as below:

Registered number: 04171774

Registered office: Bridge House Environmental Centre
Bridge House Lane
Five Oaks Road
Slinfold
West Sussex
RH13 0QW

The presentation currency of the financial statements is the Pound Sterling (£).


The group's principal activities are the supply, maintenance and manufacture of industrial air pollution control and odour control systems..

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared in pound sterling.

Basis of consolidation
The consolidated financial statements incorporate the financial statements of the company and entities controlled by the group (its subsidiaries). Control is achieved where the group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in total comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate using accounting policies consistent with those of the parent. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Investments in subsidiaries are accounted for at cost less impairment in the individual financial statements.

Significant accounting judgements and key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include:

Construction contract turnover
Turnover from contracts is calculated using an estimation of the outcome of ongoing contracts and the cost towards their completion based on management's judgement.

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


2. ACCOUNTING POLICIES - continued

Turnover
Turnover is measured at the fair value of the consideration received or receivable net of VAT and trade
discounts. The policies adopted for the recognition of turnover are as follows:

Maintenance contracts
When the outcome of a transaction can be estimated reliably, turnover from the start date of the period of the maintenance contract is recognised by reference to the stage of completion at the balance sheet date on a straight line basis over the period of the contract. Stage of completion is measured by reference to the maintenance contract end date.

Where the outcome cannot be measured reliably, turnover is recognised only to the extent of the expenses recognised that are recoverable.

Construction contracts
When the outcome of a construction contract can be estimated reliably, contract costs and turnover are
recognised by reference to the stage of completion at the balance sheet date. Stage of completion is measured by reference to the contract.

Where the outcome cannot be measured reliably, contract costs are recognised as an expense in the period in which they are incurred and contract turnover is recognised to the extent of costs incurred that it is probable will be recoverable.

When it is probable that contract costs will exceed the total contract turnover, the expected loss is recognised as an expense immediately, with a corresponding provision.

Sale of goods
Turnover from the sale of equipment is recognised when significant risks and rewards of ownership of the goods have transferred to the buyer, the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the company and the costs incurred or to be incurred in respect of the transaction can be measured reliably. This is usually on delivery.

Goodwill
Goodwill recognised represents the excess of the fair value and directly attributable costs of the purchase consideration over the fair values of the Group’s interest in the identifiable net assets acquired.

Goodwill has been fully amortised.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.
Freehold property - 2% straight line and Straight line over 50 years
Plant and machinery - 33% on cost and 33% straight line
Fixtures and fittings - 50% on cost, 50% straight line and 33% on cost
Motor vehicles - 33% on cost, 25% on cost and 25% straight line
Computer equipment - 33% on cost

Tangible fixed assets are stated at cost (or deemed cost) or valuation less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

The group has adopted a policy of capitalising borrowing costs that are directly attributable to the acquisition and construction of its freehold property. Directly attributable borrowing costs are those costs that would have been avoided if the expenditure on the qualifying asset had not been made. Capitalisation of the borrowing costs cease when substantially all the activities necessary to prepare the qualifying asset for its intended use are complete.

Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs in bringing stock to its present location and condition. Cost is calculated using the first in, first out formula,. provision is made for damaged, obsolete and slow-moving stock where appropriate.

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


2. ACCOUNTING POLICIES - continued

Financial instruments
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.

Recognition of financial instruments
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost less any impairment.

De-recognition of financial instruments
Financial instruments are de-recognised only when the contractual rights to the cash flows from the instrument expire, are settled, or transferred.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable/receivable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development
Expenditure on research and development is written off in the year in which it is incurred.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Leasing commitments
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the group.

An analysis of turnover by class of business is given below:

2023 2022
£    £   
Projects 10,176,288 14,042,349
Maintenance 2,757,449 1,980,376
Thermal oxidisers 54,189 62,016
12,987,926 16,084,741

An analysis of turnover by geographical market is given below:

2023 2022
£    £   
United Kingdom 9,094,698 8,382,670
Asia 2,349,526 2,350,250
Middle East 1,543,702 5,351,821
12,987,926 16,084,741

An analysis of turnover by category of revenue is given below:
2023 2022
£    £   
Sale of goods 15,147 53,758
Rendering of services 12,972,779 16,030,983
12,987,926 16,084,741

Rendering of services includes £10,161,141 (2022: £13,982,693) relating to turnover from construction contracts.

4. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 3,840,453 3,350,960
Social security costs 433,230 368,813
Other pension costs 205,523 187,164
4,479,206 3,906,937

The average number of employees during the year was as follows:
2023 2022

Administration 21 18
Production 60 55
81 73

2023 2022
£    £   
Directors' remuneration 205,472 198,337
Directors' pension contributions to money purchase schemes 10,748 11,114

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


4. EMPLOYEES AND DIRECTORS - continued

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 2 2

Information regarding the highest paid director for the year ended 28 February 2023 is as follows:
2023
£   
Emoluments etc 103,825
Pension contributions to money purchase schemes 7,268

5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2023 2022
£    £   
Other operating leases 23,762 126,461
Depreciation - owned assets 177,689 70,775
(Profit)/loss on disposal of fixed assets (5,208 ) 16,952
Auditors' remuneration 10,500 7,000
Foreign exchange differences (53,922 ) 154,138

6. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank interest 86,516 51,494
Interest payable 2,160 -
88,676 51,494

7. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax 104,972 39,648
Overprovision in prior year (39,648 ) (48,142 )
Total current tax 65,324 (8,494 )

Deferred tax (1,055 ) 24,700
Tax on profit 64,269 16,206

UK corporation tax has been charged at 19 % (2022 - 19 %).

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


7. TAXATION - continued

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£    £   
Profit before tax 506,727 337,324
Profit multiplied by the standard rate of corporation tax in the UK of 19 %
(2022 - 19 %)

96,278

64,092

Effects of:
Expenses not deductible for tax purposes (105 ) 8,331
Income not taxable for tax purposes (990 ) -
Depreciation in excess of capital allowances 8,106 4,739
Utilisation of tax losses - (8,651 )
Adjustments to tax charge in respect of previous periods (39,648 ) (48,142 )
Capitalised costs deducted - (4,163 )
Other timing differences 628 -
Total tax charge 64,269 16,206

From 1 April 2023, the corporation tax rate increased from 19% to 25%. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.

8. INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements.


9. DIVIDENDS
2023 2022
£    £   
Interim 163,217 110,735

10. INTANGIBLE FIXED ASSETS

Group
Goodwill
£   
COST
At 1 March 2022
and 28 February 2023 164,056
AMORTISATION
At 1 March 2022
and 28 February 2023 164,056
NET BOOK VALUE
At 28 February 2023 -
At 28 February 2022 -

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


11. TANGIBLE FIXED ASSETS

Group
Fixtures
Freehold Plant and and
property machinery fittings
£    £    £   
COST
At 1 March 2022 4,327,391 286,993 85,804
Additions 8,812 41,404 950
Disposals - - -
At 28 February 2023 4,336,203 328,397 86,754
DEPRECIATION
At 1 March 2022 - 228,768 52,002
Charge for year 86,724 29,479 14,919
Eliminated on disposal - - -
At 28 February 2023 86,724 258,247 66,921
NET BOOK VALUE
At 28 February 2023 4,249,479 70,150 19,833
At 28 February 2022 4,327,391 58,225 33,802

Motor Computer
vehicles equipment Totals
£    £    £   
COST
At 1 March 2022 162,114 433,776 5,296,078
Additions 36,790 20,094 108,050
Disposals (22,850 ) - (22,850 )
At 28 February 2023 176,054 453,870 5,381,278
DEPRECIATION
At 1 March 2022 129,597 335,799 746,166
Charge for year 23,707 22,860 177,689
Eliminated on disposal (22,850 ) - (22,850 )
At 28 February 2023 130,454 358,659 901,005
NET BOOK VALUE
At 28 February 2023 45,600 95,211 4,480,273
At 28 February 2022 32,517 97,977 4,549,912

The freehold property cost includes capitalised borrowing costs of £166,509 (2022 £166,509).

The freehold property, with a carrying value of £4,249,479 (2022: £4,327,391) has been pledged as security for the bank loans (see note 20).

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


12. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£   
COST
At 1 March 2022
and 28 February 2023 102
NET BOOK VALUE
At 28 February 2023 102
At 28 February 2022 102

The group or the company's investments at the Balance Sheet date in the share capital of companies include the following:

Subsidiaries

ERG (Air Pollution Control) Limited
Registered office: Bridge House Environmental Centre, Bridge House Lane, Five Oaks Road, Slinfold, West Sussex RH13 0QW
Nature of business: Supply of cooling and ventilation equipment
%
Class of shares: holding
Ordinary 100.00

ERG APC Maintenance Limited
Registered office: Bridge House Environmental Centre, Bridge House Lane, Five Oaks Road, Slinfold, West Sussex RH13 0QW
Nature of business: Maintenance of cooling and ventilation equipment
%
Class of shares: holding
Ordinary 100.00

ERG APC Maintenance Limited (company number 09990146) is exempt from the requirements of the Companies Act 2006 relating to the audit of individual accounts by virtue of section 479A.

ERG (Plastic Fabrication) Limited
Registered office: Bridge House Environmental Centre, Bridge House Lane, Five Oaks Road, Slinfold, West Sussex RH13 0QW
Nature of business: Manufacture of cooling and ventilation equipment
%
Class of shares: holding
Ordinary 100.00

ERG (Plastic Fabrication) Limited is a subsidiary of ERG (Air Pollution Control) Limited.

ERG (Plastic Fabrication) Limited (company number 04238669) is exempt from the requirements of the Companies Act 2006 relating to the audit of individual accounts by virtue of section 479A.

ERG APC Property Limited
Registered office: Bridge House Environmental Centre, Bridge House Lane, Five Oaks Road, Slinfold, West Sussex RH13 0QW
Nature of business: Construction of group headquarters
%
Class of shares: holding
Ordinary 100.00

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


12. FIXED ASSET INVESTMENTS - continued

APC Process Engineering Limited
Registered office: Bridge House Environmental Centre, Bridge House Lane, Five Oaks Road, Slinfold, West Sussex RH13 0QW
Nature of business: Dormant
%
Class of shares: holding
Ordinary 100.00

APC Process Engineering Limited is a subsidiary of ERG (Air Pollution Control) Limited.


All of the subsidiaries are included within these consolidated financial statements.

13. STOCKS

Group
2023 2022
£    £   
Raw materials 39,972 33,577
Work-in-progress - 6,022
39,972 39,599

14. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2023 2022 2023 2022
£    £    £    £   
Trade debtors 2,332,584 1,408,605 - -
Amounts owed by group undertakings - - 1,044,008 1,786,005
Amounts recoverable on contract 1,583,556 1,520,207 - -
Other debtors 25,113 5,636 - -
Tax - 43,908 - -
VAT - 18,061 - 1,848
Prepayments and accrued income 124,220 126,863 - -
4,065,473 3,123,280 1,044,008 1,787,853

15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2023 2022 2023 2022
£    £    £    £   
Bank loans and overdrafts (see note 17) 18,365 726,105 - 609,500
Payments on account 3,516,493 2,577,669 - 468,871
Trade creditors 1,544,050 1,054,110 245,663 33,886
Amounts owed to group undertakings - - 51,838 51,838
Tax 104,972 39,648 71,656 7,210
Social security and other taxes 102,534 93,530 - -
VAT 124,451 - - -
Other creditors 62,705 39,456 101 101
Directors' current accounts 2,400 1,292 - -
Accruals and deferred income 344,823 1,001,532 20,816 821,568
5,820,793 5,533,342 390,074 1,992,974

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group
2023 2022
£    £   
Bank loans (see note 17) 2,126,971 2,148,507

17. LOANS

An analysis of the maturity of loans is given below:

Group Company
2023 2022 2023 2022
£    £    £    £   
Amounts falling due within one year or on demand:
Bank loans 18,365 726,105 - 609,500
Amounts falling due between two and five years:
Bank loans - 1-5 years 2,126,971 2,148,507 - -

The mortgage of £2,145,336 (2022: £2,265,112) is repayable over five years, from August 2021, with monthly instalments of capital and interest and a final repayment of the outstanding balance. The interest rate is 3.25% per annum over the Bank of England Base Rate payable on the outstanding principal amount of the loan on a monthly basis and on the final repayment date.

Trade loans amounting to £nil (2022: £609,500) are short-term loans to specifically meet funding requirements of the group's projects.

18. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group
Non-cancellable operating leases
2023 2022
£    £   
Within one year 6,323 9,582

19. SECURED DEBTS

The following secured debts are included within creditors:

Group
2023 2022
£    £   
Bank loans 2,145,336 2,874,612

Bank borrowings are secured by a debenture including a fixed charge over all present freehold and leasehold property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and first floating charge over all assets and undertakings both present and future.

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


20. FINANCIAL INSTRUMENTS

The group enters into forward foreign currency contracts to mitigate the exchange rate risk for certain foreign currency payables. At the year end, the outstanding contracts all mature within 12 months (2022: 12 months) of the year end. At the year end, the group was committed to buy $748,437, €86,400 and £152,769 and pay a fixed $ and a fixed sterling amount (2022: US$233,500, £482,687 and €93,750 and pay a fixed sterling amount and a fixed AUD$ amount).

The forward currency contracts are measured at fair value, which is determined using valuation techniques that utilise observable inputs. The key inputs used in valuing the derivatives are the forward exchange rates for GBP:USD and GBP:EUR. The fair value of the forward-foreign currency contracts is a liability of £23,488 (2022: £25,877 asset).

21. PROVISIONS FOR LIABILITIES

Group
2023 2022
£    £   
Deferred tax
Accelerated capital allowances 48,510 49,564
Other provisions
Provision for loss making contracts 100,000 166,347

Aggregate amounts 148,510 215,911

Group
Deferred Other
tax provisions
£    £   
Balance at 1 March 2022 49,564 166,347
Credit to Income Statement during year (1,054 ) (66,347 )
Balance at 28 February 2023 48,510 100,000

The net deferred tax liability expected to reverse in 2023/24 is £14,803. This relates to the reversal of timing differences on acquired tangible assets and capital allowances through depreciation.

The other provision is an onerous contract provision for contracts expected to make a loss on completion. The timing of completion is uncertain.

22. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
50,000 Ordinary £1 50,000 50,000

There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.

23. PENSION COMMITMENTS

The group operates a defined contribution pension plan for its employees. The amount recognised as an expense in the year was £205,522 (2022: £187,164).

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


24. CONTINGENT LIABILITIES

Group
At the year end, the group had performance guarantee bonds in place relating to projects that took place during the year. The bonds outstanding at the year end totalled £887,705 (2022: £1,401,279).

Company
At the year end, the company had unlimited multilateral guarantees in place with the other companies within the group. At 28 February 2023, the total borrowings of all other group companies was £2,145,336 (2022: £2,265,112).

25. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

During the year, the group made advances of £25,803 (2022: £51,538) to a director and they made repayments of £25,803 (2022: £90,700). At the year end, the director owed the group £nil (2022: £nil). The advances were interest-free, unsecured and repayable on demand.

26. RELATED PARTY DISCLOSURES

Key management personnel of the entity or its parent (in the aggregate)

During the year, the company voted dividends to a director amounting to £163,217 (2022: £110,735).

During the year, a total of key management personnel compensation of £ 672,954 (2022 - £ 721,735 ) was paid.

27. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
2023 2022
£    £   
Profit before taxation 506,727 337,324
Depreciation charges 177,690 70,775
(Profit)/loss on disposal of fixed assets (5,208 ) 16,952
Increase/(decrease) in provisions (66,347 ) 166,347
Finance costs 88,676 51,494
Finance income (6,189 ) (274 )
695,349 642,618
Increase in stocks (373 ) (15,064 )
(Increase)/decrease in trade and other debtors (986,100 ) 3,962,453
Increase/(decrease) in trade and other creditors 928,758 (1,494,772 )
Cash generated from operations 637,634 3,095,235

28. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 28 February 2023
28.2.23 1.3.22
£    £   
Cash and cash equivalents 1,485,812 1,880,984
Year ended 28 February 2022
28.2.22 1.3.21
£    £   
Cash and cash equivalents 1,880,984 850,865


ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 28 FEBRUARY 2023


29. ANALYSIS OF CHANGES IN NET DEBT

At 1.3.22 Cash flow At 28.2.23
£    £    £   
Net cash
Cash at bank and in hand 1,880,984 (395,172 ) 1,485,812
1,880,984 (395,172 ) 1,485,812
Debt
Debts falling due within 1 year (726,105 ) 707,740 (18,365 )
Debts falling due after 1 year (2,148,507 ) 21,536 (2,126,971 )
(2,874,612 ) 729,276 (2,145,336 )
Total (993,628 ) 334,104 (659,524 )