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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 29 FEBRUARY 2024

FOR

ERG PROCESS TECHNOLOGIES LIMITED

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024










Page

Group Strategic Report 1

Report of the Directors 3

Report of the Independent Auditors 4

Consolidated Statement of Comprehensive Income 7

Consolidated Balance Sheet 8

Company Balance Sheet 9

Consolidated Statement of Changes in Equity 10

Company Statement of Changes in Equity 11

Consolidated Cash Flow Statement 12

Notes to the Consolidated Financial Statements 13


ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024


The directors present their strategic report of the company and the group for the year ended 29 February 2024.

REVIEW OF BUSINESS PERFORMANCE
Overall consolidated group sales reported for the year are £13,493,918. This is a 4% increase compared to sales the previous year of £12,987,926. This modest growth belies the underlying healthy orderbook, and performance was expected to be higher but has been tempered by client-side project delays.

Some reduction in profit compared to 2023 was expected due to increased overheads is balanced with maintaining the proportion of gross profit to turnover when compared to previous years. ERG has made significant investments in the period with recruitment of additional staff and other resources needed to support a very healthy order book for 2024-2025 financial year that has increased our overheads, temporarily decreasing profitability.

Trading conditions during the year have slightly eased with a gradual reduction in inflationary pressures, price instability and interest rates. The group has largely been successful in being able to navigate through these headwinds and pass on price increases to customers and has managed to slightly increase our overall gross profit margins. The company'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 company's thermal systems technology and engineering expertise have also been significant in winning business where clients require total systems solutions and gives ERG a competitive advantage.

- The Middle East division continues to be a major contributor to the group strategy and its performance. The Middle East team are 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 repeat business contracts in Algeria. Hitherto we have been operating from our regional office in Jordan with a branch office in Dubai. The company has now opened a fully trading subsidiary in Dubai. This will strengthen our ability to qualify for local government contracts in the UAE.

- 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 management team has now been strengthened and the medium-term strategy is to target faster growth which has largely been held back by our delivery capacity.

- 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.

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 in 2021 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


ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024

BRANCHES
The group has branches in Jordan and in Dubai.

ON BEHALF OF THE BOARD:





P I Batt - Director


22 November 2024

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 29 FEBRUARY 2024


The directors present their report with the financial statements of the company and the group for the year ended 29 February 2024.

DIVIDENDS
The total distribution of dividends for the year ended 29 February 2024 will be £ 138,332 .

DIRECTORS
The directors shown below have held office during the whole of the period from 1 March 2023 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 - appointed 23 November 2023

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:





P I Batt - Director


22 November 2024

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 29 February 2024 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, 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 29 February 2024 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.

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


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.

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;
- Comparison of the property valuation accounting estimate to market data;
- Review of journal entries, non-sales bank receipts and non-purchase bank payments for unusual accounting
entries; and
- Review of contracts and contract balance substantive testing 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.

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


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

25 November 2024

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

CONSOLIDATED
STATEMENT OF COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 29 FEBRUARY 2024

2024 2023
Notes £    £   

TURNOVER 3 13,493,918 12,987,926

Cost of sales 8,460,865 8,342,694
GROSS PROFIT 5,033,053 4,645,232

Administrative expenses 4,789,595 4,056,019
OPERATING PROFIT 5 243,458 589,213

Interest receivable and similar income 29,484 6,189
272,942 595,402

Interest payable and similar expenses 6 191,397 88,676
PROFIT BEFORE TAXATION 81,545 506,726

Tax on profit 7 (51,596 ) 64,269
PROFIT FOR THE FINANCIAL YEAR 133,141 442,457

OTHER COMPREHENSIVE INCOME
Freehold property revaluation 837,246 -
Income tax relating to other comprehensive
income

(158,435

)

-
OTHER COMPREHENSIVE INCOME FOR
THE YEAR, NET OF INCOME TAX

678,811

-
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

811,952

442,457

Profit attributable to:
Owners of the parent 133,141 442,457

Total comprehensive income attributable to:
Owners of the parent 811,952 442,457

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

CONSOLIDATED BALANCE SHEET
29 FEBRUARY 2024

2024 2023
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 10 - -
Tangible assets 11 5,337,211 4,480,272
Investments 12 - -
5,337,211 4,480,272

CURRENT ASSETS
Stocks 13 214,003 39,972
Debtors 14 3,612,032 4,065,473
Cash at bank and in hand 1,292,942 1,485,812
5,118,977 5,591,257
CREDITORS
Amounts falling due within one year 15 5,517,334 5,820,793
NET CURRENT LIABILITIES (398,357 ) (229,536 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

4,938,854

4,250,736

CREDITORS
Amounts falling due after more than one
year

16

(2,092,991

)

(2,126,971

)

PROVISIONS FOR LIABILITIES 21 (196,988 ) (148,510 )
NET ASSETS 2,648,875 1,975,255

CAPITAL AND RESERVES
Called up share capital 22 50,000 50,000
Revaluation reserve 678,811 -
Retained earnings 1,920,064 1,925,255
SHAREHOLDERS' FUNDS 2,648,875 1,975,255

The financial statements were approved by the Board of Directors and authorised for issue on 22 November 2024 and were signed on its behalf by:





P I Batt - Director


ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

COMPANY BALANCE SHEET
29 FEBRUARY 2024

2024 2023
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 10 - -
Tangible assets 11 - -
Investments 12 102 102
102 102

CURRENT ASSETS
Debtors 14 821,861 1,044,008
Cash at bank 12,722 200,255
834,583 1,244,263
CREDITORS
Amounts falling due within one year 15 477,412 390,074
NET CURRENT ASSETS 357,171 854,189
TOTAL ASSETS LESS CURRENT
LIABILITIES

357,273

854,291

CAPITAL AND RESERVES
Called up share capital 22 50,000 50,000
Retained earnings 307,273 804,291
SHAREHOLDERS' FUNDS 357,273 854,291

Company's (loss)/profit for the financial year (358,686 ) 479,508

The financial statements were approved by the Board of Directors and authorised for issue on 22 November 2025 and were signed on its behalf by:





P I Batt - Director


ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2024

Called up
share Retained Revaluation Total
capital earnings reserve equity
£    £    £    £   
Balance at 1 March 2022 50,000 1,646,015 - 1,696,015

Changes in equity
Profit for the year - 442,457 - 442,457
Total comprehensive income - 442,457 - 442,457
Dividends - (163,217 ) - (163,217 )
Balance at 28 February 2023 50,000 1,925,255 - 1,975,255

Changes in equity
Profit for the year - 133,141 - 133,141
Other comprehensive income - - 678,811 678,811
Total comprehensive income - 133,141 678,811 811,952
Dividends - (138,332 ) - (138,332 )
Balance at 29 February 2024 50,000 1,920,064 678,811 2,648,875

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2024

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 March 2022 50,000 488,000 538,000

Changes in equity
Dividends - (163,217 ) (163,217 )
Total comprehensive income - 479,508 479,508
Balance at 28 February 2023 50,000 804,291 854,291

Changes in equity
Dividends - (138,332 ) (138,332 )
Total comprehensive income - (358,686 ) (358,686 )
Balance at 29 February 2024 50,000 307,273 357,273

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 29 FEBRUARY 2024

2024 2023
Notes £    £   
Cash flows from operating activities
Cash generated from operations 27 (474,313 ) 637,634
Tax paid (82,764 ) 43,908
Net cash from operating activities (557,077 ) 681,542

Cash flows from investing activities
Purchase of tangible fixed assets (241,639 ) (108,050 )
Sale of tangible fixed assets 6,151 5,208
Interest received 29,484 6,189
Net cash from investing activities (206,004 ) (96,653 )

Cash flows from financing activities
New loans in year 1,439,982 -
Loan repayments in year (537,642 ) (729,276 )
Amount introduced by directors - 1,108
Amount withdrawn by directors (2,400 ) -
Equity dividends paid (138,332 ) (163,217 )
Interest paid (191,397 ) (88,676 )
Net cash from financing activities 570,211 (980,061 )

Decrease in cash and cash equivalents (192,870 ) (395,172 )
Cash and cash equivalents at beginning
of year

28

1,485,812

1,880,984

Cash and cash equivalents at end of year 28 1,292,942 1,485,812

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024


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 as modified by the revaluation of certain assets.

The financial statements have been prepared in pound sterling.

Reduced disclosures
The parent company has taken advantage of the exemption from disclosing the following information, as permitted by the reduced disclosure regime within FRS 102, since the financial statements of the parent company are consolidated in the group financial statements:

- Section 7 ‘Statement of Cash Flows’ - Presentation of a Statement of Cash Flow and related notes and disclosures

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.

Freehold property valuation
The freehold property fair value is an estimate based on the open market value of similar properties in the local area. The estimation involves assumptions related to the effect of the economy and market demand on the property's value.

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


2. ACCOUNTING POLICIES - continued

Changes in accounting policies
The group has changed its accounting policy for freehold property from the cost model to the revaluation model. Under the cost model, the freehold property was carried at cost less accumulated depreciation. Under the revaluation model, the property is carried at a revalued amount, being its fair value at the date of revaluation less any subsequent accumulated depreciation.

The change in accounting policy is not required to be retrospectively applied.

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.

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


2. ACCOUNTING POLICIES - continued

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
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, except freehold property, 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 freehold property is carried at a revalued amount, being its fair value at the date of revaluation less any subsequent accumulated depreciation.

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.

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 Statement of Comprehensive Income, 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.

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


2. ACCOUNTING POLICIES - continued

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.

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:

2024 2023
£    £   
Projects 10,839,491 10,176,288
Maintenance 2,609,079 2,757,449
Thermal oxidisers 45,348 54,189
13,493,918 12,987,926

An analysis of turnover by geographical market is given below:

2024 2023
£    £   
United Kingdom 10,906,668 9,094,698
Asia - 2,349,526
Middle East 2,587,250 1,543,702
13,493,918 12,987,926

An analysis of turnover by category of revenue is given below:
2024 2023
£    £   
Sale of goods 41,167 15,147
Rendering of services 13,452,751 12,972,779
13,493,918 12,987,926

Rendering of services includes £10,798,324 (2023: £10,161,141) relating to turnover from construction contracts.

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


4. EMPLOYEES AND DIRECTORS
2024 2023
£    £   
Wages and salaries 4,656,852 3,840,453
Social security costs 511,617 433,230
Other pension costs 331,999 205,523
5,500,468 4,479,206

The average number of employees during the year was as follows:
2024 2023

Administration 19 21
Production 83 60
102 81

2024 2023
£    £   
Directors' remuneration 338,831 205,472
Directors' pension contributions to money purchase schemes 20,185 10,748

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

Money purchase schemes 4 2

Information regarding the highest paid director is as follows:
2024 2023
£    £   
Emoluments etc 120,271 103,825
Pension contributions to money purchase schemes 9,403 7,268

During the year, the group made payments of £84,160 (2023: £74,444) to a third party for services of a director.

5. OPERATING PROFIT

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

2024 2023
£    £   
Other operating leases 30,135 23,762
Depreciation - owned assets 221,962 177,689
Profit on disposal of fixed assets (6,167 ) (5,208 )
Auditors' remuneration 10,000 10,500
Foreign exchange differences 9,656 (53,922 )

6. INTEREST PAYABLE AND SIMILAR EXPENSES
2024 2023
£    £   
Bank interest 193,556 86,516
Interest payable (2,159 ) 2,160
191,397 88,676

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


7. TAXATION

Analysis of the tax (credit)/charge
The tax (credit)/charge on the profit for the year was as follows:
2024 2023
£    £   
Current tax:
UK corporation tax - 104,972
Overprovision in prior year (41,639 ) (39,648 )
Total current tax (41,639 ) 65,324

Deferred tax (9,957 ) (1,055 )
Tax on profit (51,596 ) 64,269

UK corporation tax has been charged at 24.49 % (2023 - 19 %).

Reconciliation of total tax (credit)/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:

2024 2023
£    £   
Profit before tax 81,545 506,726
Profit multiplied by the standard rate of corporation tax in the UK of 24.490
% (2023 - 19 %)

19,970

96,278

Effects of:
Expenses not deductible for tax purposes (147 ) (105 )
Income not taxable for tax purposes - (990 )
Utilisation of tax losses (53,314 ) -
Adjustments to tax charge in respect of previous periods (41,639 ) (39,648 )
Taxed at different rates 6,654 8,734
Deferred tax asset not provided 16,880 -
Total tax (credit)/charge (51,596 ) 64,269

Tax effects relating to effects of other comprehensive income

2024
Gross Tax Net
£    £    £   
Freehold property revaluation 837,246 (158,435 ) 678,811

From 1 April 2023, the corporation tax rate increased from 19% to 25%.

8. INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME

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
2024 2023
£    £   
Interim 138,332 163,217

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


10. INTANGIBLE FIXED ASSETS

Group
Goodwill
£   
COST
At 1 March 2023
and 29 February 2024 164,056
AMORTISATION
At 1 March 2023
and 29 February 2024 164,056
NET BOOK VALUE
At 29 February 2024 -
At 28 February 2023 -

11. TANGIBLE FIXED ASSETS

Group
Fixtures
Freehold Plant and and
property machinery fittings
£    £    £   
COST OR VALUATION
At 1 March 2023 4,336,202 328,397 86,754
Additions - 26,359 19,515
Disposals - (3,971 ) -
Revaluations 663,798 - -
At 29 February 2024 5,000,000 350,785 106,269
DEPRECIATION
At 1 March 2023 86,724 258,247 66,921
Charge for year 86,724 44,559 19,193
Eliminated on disposal - (3,971 ) -
Revaluation adjustments (173,448 ) - -
At 29 February 2024 - 298,835 86,114
NET BOOK VALUE
At 29 February 2024 5,000,000 51,950 20,155
At 28 February 2023 4,249,478 70,150 19,833

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


11. TANGIBLE FIXED ASSETS - continued

Group

Motor Computer
vehicles equipment Totals
£    £    £   
COST OR VALUATION
At 1 March 2023 176,054 453,870 5,381,277
Additions 135,030 60,735 241,639
Disposals (22,435 ) - (26,406 )
Revaluations - - 663,798
At 29 February 2024 288,649 514,605 6,260,308
DEPRECIATION
At 1 March 2023 130,454 358,659 901,005
Charge for year 36,938 34,548 221,962
Eliminated on disposal (22,451 ) - (26,422 )
Revaluation adjustments - - (173,448 )
At 29 February 2024 144,941 393,207 923,097
NET BOOK VALUE
At 29 February 2024 143,708 121,398 5,337,211
At 28 February 2023 45,600 95,211 4,480,272

The freehold property cost includes capitalised borrowing costs of £166,509 (2023 £166,509).

The freehold property, with a carrying value of £5,000,000 (2023: £4,249,478) has been pledged as security for the bank loans (see note 19).

The freehold property has been fair valued by the directors based on a post year end professional valuation. The fair value is based on the open market valuation of similar properties in the local area.

Revaluations: £   
29 February 2024 837,246

The historic cost, depreciation and net book value of the freehold property are:

2024 2023
£    £   
Cost 4,336,203 4,336,202
Accumulated depreciation (173,448 ) (87,724 )
Net book value 4,162,755 4,248,478

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


12. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£   
COST
At 1 March 2023
and 29 February 2024 102
NET BOOK VALUE
At 29 February 2024 102
At 28 February 2023 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) has claimed exemption from audit under section 479A of the Companies Act 2006, whereby ERG Process Technologies Limited provides a guarantee under section 479C of the Companies Act 2006.

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) has claimed exemption from audit under section 479A of the Companies Act 2006, whereby ERG Process Technologies Limited provides a guarantee under section 479C of the Companies Act 2006.

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 29 FEBRUARY 2024


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
2024 2023
£    £   
Raw materials 180,098 39,972
Work-in-progress 33,905 -
214,003 39,972

14. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2024 2023 2024 2023
£    £    £    £   
Trade debtors 1,953,571 2,332,584 174,530 -
Amounts owed by group undertakings - - 318,425 1,044,008
Amounts recoverable on
contracts 1,377,131 1,583,556 209,513 -
Other debtors 8,731 25,113 - -
Tax 19,431 - 10,875 -
VAT 126,744 - 79,725 -
Prepayments and accrued income 126,424 124,220 28,793 -
3,612,032 4,065,473 821,861 1,044,008

15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2024 2023 2024 2023
£    £    £    £   
Bank loans and overdrafts (see note 17) 954,685 18,365 - -
Payments on account 2,503,943 3,516,493 - -
Trade creditors 1,479,906 1,544,047 275,342 245,663
Amounts owed to group undertakings - - 201,969 51,838
Tax - 104,972 - 71,656
Social security and other taxes 127,005 102,534 - -
VAT - 124,451 - -
Other creditors 79,211 62,705 101 101
Directors' current accounts - 2,400 - -
Accruals and deferred income 372,584 344,826 - 20,816
5,517,334 5,820,793 477,412 390,074

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


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

Group
2024 2023
£    £   
Bank loans (see note 17) 2,092,991 2,126,971

17. LOANS

An analysis of the maturity of loans is given below:

Group
2024 2023
£    £   
Amounts falling due within one year or on demand:
Bank loans 954,685 18,365
Amounts falling due between two and five years:
Bank loans - 1-5 years 2,092,991 2,126,971

The mortgage of £2,127,735 (2023: £2,145,336) 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 £919,941 (2023: £nil) 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
2024 2023
£    £   
Within one year 5,687 6,323

Company

Non-cancellable operating
leases
2024 2023
£    £   
Within one year 9,695 9,695

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


19. SECURED DEBTS

The following secured debts are included within creditors:

Group
2024 2023
£    £   
Bank loans 3,047,676 2,145,336

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.

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 group had no commitments (2023: US$748,437, £152,769 and €86,400 and pay a fixed sterling amount and a fixed $ amount). At the prior year end, the outstanding contracts all matured within 12 months of the year end.

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 £nil (2023: £23,488 liability).

21. PROVISIONS FOR LIABILITIES

Group
2024 2023
£    £   
Deferred tax
Accelerated capital allowances 43,305 48,510
Other timing differences 153,683 -
196,988 48,510
Other provisions
Provision for loss making contracts - 100,000

Aggregate amounts 196,988 148,510

Group
Deferred Other
tax provisions
£    £   
Balance at 1 March 2023 48,510 100,000
Provided during year 148,478 -
Unused amounts reversed during year - (100,000 )
Balance at 29 February 2024 196,988 -

The net deferred tax liability expected to reverse in 2024/25 is £15,088. This relates to the reversal of timing differences on acquired tangible assets and capital allowances through depreciation.

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


22. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2024 2023
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 £331,999 (2023: £205,522).

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 £1,038,222 (2023: £887,705).

Company
At the year end, the company had performance guarantee bonds in place relating to projects that took place during the year. The bonds outstanding at the year end totalled £665,359 (2023: £nil).

At the year end, the company had unlimited multilateral guarantees in place with the other companies within the group. At 28 February 2024, the total borrowings of all other group companies was £3,047,676 (2023: £2,145,336).

25. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

During the year, the group made advances of £nil (2023: £25,803) to a director and they made repayments of £nil (2023: £25,803). At the year end, the director owed the group £nil (2023: £nil). The advances were interest-free, unsecured and repayable on demand.

26. RELATED PARTY DISCLOSURES

Parent company
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

During the year, the company voted dividends to a director amounting to £138,332 (2023: £163,217).

Group
During the year, the group voted dividends to a director amounting to £138,332 (2023: £163,217). The group owed a director £nil (2023: £2,400) which is interest-free, unsecured and repayable on demand.

During the year, the group made payments of £84,160 (2023: £74,444) to a company controlled by a director. There were no amounts outstanding at the year end.

During the year, a total of key management personnel compensation of £ 923,401 (2023 - £ 672,954 ) was paid.

ERG PROCESS TECHNOLOGIES LIMITED (REGISTERED NUMBER: 04171774)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 29 FEBRUARY 2024


27. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2024 2023
£    £   
Profit before taxation 81,545 506,726
Depreciation charges 221,962 177,690
Profit on disposal of fixed assets (6,167 ) (5,208 )
Increase/(decrease) in provisions (100,000 ) (66,347 )
Finance costs 191,397 88,676
Finance income (29,484 ) (6,189 )
359,253 695,348
Increase in stocks (174,031 ) (373 )
Decrease/(increase) in trade and other debtors 472,872 (986,100 )
(Decrease)/increase in trade and other creditors (1,132,407 ) 928,759
Cash generated from operations (474,313 ) 637,634

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 29 February 2024
29.2.24 1.3.23
£    £   
Cash and cash equivalents 1,292,942 1,485,812
Year ended 28 February 2023
28.2.23 1.3.22
£    £   
Cash and cash equivalents 1,485,812 1,880,984


29. ANALYSIS OF CHANGES IN NET DEBT

At 1.3.23 Cash flow At 29.2.24
£    £    £   
Net cash
Cash at bank and in hand 1,485,812 (192,870 ) 1,292,942
1,485,812 (192,870 ) 1,292,942
Debt
Debts falling due within 1 year (18,365 ) (936,320 ) (954,685 )
Debts falling due after 1 year (2,126,971 ) 33,980 (2,092,991 )
(2,145,336 ) (902,340 ) (3,047,676 )
Total (659,524 ) (1,095,210 ) (1,754,734 )