Company registration number 09007893 (England and Wales)
ETG ENGINEERING SOLUTIONS LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
ETG ENGINEERING SOLUTIONS LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
ETG ENGINEERING SOLUTIONS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Current assets
Stocks
260,031
265,803
Debtors
3
1,294,530
1,071,431
Cash at bank and in hand
1,160
-
0
1,555,721
1,337,234
Creditors: amounts falling due within one year
4
(1,293,579)
(1,092,505)
Net current assets
262,142
244,729
Capital and reserves
Called up share capital
5
1
1
Profit and loss reserves
262,141
244,728
Total equity
262,142
244,729

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

The financial statements were approved by the board of directors and authorised for issue on 18 April 2025 and are signed on its behalf by:
A Maher
M J Doyle
Director
Director
Company registration number 09007893 (England and Wales)
ETG ENGINEERING SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information

ETG Engineering Solutions Limited is a private company limited by shares incorporated in England and Wales (Registration No. 09007893). The registered office is Wellesbourne Distribution Park, Unit 16, Loxley Road, Wellesbourne, Warwickshire, CV35 9JY.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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

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

The financial statements of the company are consolidated in the financial statements of The Engineering Technology Group Holdings Limited. These consolidated financial statements are available from its registered office, Wellesbourne Distribution Park, Unit 16, Loxley Road, Wellesbourne, Warwickshire, CV35 9JY.

1.2
Going concern

Although, as anticipated at the end of 2022, activity levels increased during 2023, due to general UK and Worldwide economic pressures, margins were inevitably squeezed. Also, because of the decision to acquire additional machine stock on the back of the success of 2022 and then customers delaying making capital goods investment, cashflow management once again became the focus for the management team. Unfortunately, by the end of 2023, the Group had breached one of the financial covenants required by its bankers and as a consequence its bank loan has been shown in the Balance Sheet as at 31 December 2023 as falling due on demand due to this technical default. However, the bank has subsequently issued a waiver in relation to this breach. true

 

The Group entered the start of 2024 with a positive position however subsequent growth in sales has not been at the level anticipated, due to a combination of customers delaying purchasing decisions and the Group facing the challenges of an under-resourced sales force. Consequently, at the time of approving these financial statements, further breaches of the bank’s financial covenants have been noted and there have been additional pressures on the Group’s cash flows which continue to be managed with the support of creditors, including HMRC, and the shareholders.

ETG ENGINEERING SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -

Going concern (continued)

The Directors have prepared short term cashflow forecasts and profit forecasts covering the year to 31 December 2026 and consider that these are based on attainable activity levels, despite the current uncertainty levels in the UK manufacturing sectors and the forthcoming increases in employment costs. These forecasts have been subject to sensitivity analysis to understand the possible impact should there be a slowdown in machine sales. This analysis indicates that should the Group see a very significant downturn in sales orders compared to that forecast or compared to that achieved in 2024 it would need to consider sourcing additional headroom, either through changing their working capital finance model; extension of creditor and HMRC payment terms and/or financial support from the shareholders. The Board are already positively exploring alternative working capital models which may be more appropriate to deal with the volatility in the day to day working capital requirements which capital goods distributors typically experience. This volatility usually arises due to the quantum values associated with purchases of machinery as well as the need to hold some stock levels ready to meet customer demand. However, the value of machine order sales in the first quarter of 2025 reveals an increase over that achieved in the same period for 2024 and, based on current economic forecasts, the Directors believe that there is likely to be opportunity to see a further increase towards the end of 2025. At the time of concluding this assessment, the USA have announced the potential implementation of tariffs on goods imported to the USA. The announcements have created worldwide economic uncertainty and it is not yet possible to conclude what the future impact might be on the UK economy, particularly as changes are continuing to be announced. The Directors have reviewed the Group’s customer base to understand how many could be impacted by the imposition of significant import tariffs, primarily those connected to the UK car manufacturing sector. Whilst it is acknowledged that some are likely to be negatively impacted, the Directors also recognise that some other customers may nevertheless gain a competitive advantage over their competitors who manufacture in countries who may face the imposition of higher tariff rates than the UK.

 

Having, to date, demonstrated their ability to manage working capital whilst experiencing fluctuating sales patterns and together with their belief and confidence that appropriate funding resources will be made available for the foreseeable future and there being a return to suitable activity levels throughout 2025 and beyond, the Directors have continued to adopt the going concern basis of accounting for the preparation of these financial statements.

1.3
Turnover

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

Turnover is recognised on despatch of goods and completion of services. Amounts are recognised over the period for which the income relates.

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

ETG ENGINEERING SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -

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

1.4
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.5
Cash and cash equivalents

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

1.6
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

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

ETG ENGINEERING SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 5 -
Classification of financial liabilities

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

Basic financial liabilities

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

 

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

 

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

1.7
Equity instruments

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

1.8
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Employees

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

2023
2022
Number
Number
Total
-
0
-
0
ETG ENGINEERING SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Employees
(Continued)
- 6 -

A portion of the overheads arising during the year for ETG Engineering Solutions Limited have been paid by The Engineering Technology Group Limited.

 

The proportion of these overheads which relate ETG Engineering Solutions Limited and other group companies were then recharged to the respective companies at the end of the year.

3
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,077,559
850,087
Amounts owed by group undertakings
216,971
222,352
Other debtors
-
0
(1,008)
1,294,530
1,071,431
4
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
37,184
74,680
Trade creditors
441,385
331,840
Amounts owed to group undertakings
186,701
38,019
Taxation and social security
95,954
-
0
Other creditors
532,355
647,966
1,293,579
1,092,505

Creditors totalling £37,184 (2022 - £74,680) are secured by an unlimited debenture. Creditors totalling £428,580 (2022 - £399,940) are secured by a charge over trade debtors.

5
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share of £1 each
1
1
1
1
ETG ENGINEERING SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
6
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006.

The auditor's report is unqualified and includes the following:

Opinion

In our opinion the financial statements:

Senior Statutory Auditor:
Wende Hubbard FCCA
Statutory Auditor:
Burgis & Bullock
Date of audit report:
18 April 2025
7
Financial commitments, guarantees and contingent liabilities

An unlimited debenture has been given by the company in favour of the group’s bankers in respect of loans and overdrafts due by group undertakings. The balance on other group companies' bank loans and overdrafts at the year end was £1,602,457 (2022 - £2,505,629).

 

A further debenture has been given by the company in respect of securing loan notes issued by the ultimate parent company to J Temple, a company director. The balance on loan notes, including accrued interest, amounted to £500,000 (2022 - £500,000) at the year end.

 

Four of the directors have given a personal indemnity in favour of the group's bankers in respect for any potential losses on the company's invoice discounting agreement.

8
Related party transactions

Intercompany balances are repayable on demand.

 

The company has taken advantage of the exemption available in FRS102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.

ETG ENGINEERING SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
9
Parent company

The largest and smallest group within which the company are consolidated is the company's ultimate holding company, The Engineering Technology Group Holdings Limited whose registered office is Wellesbourne Distribution Park, Unit 16, Loxley Road, Wellesbourne, Warwickshire, CV35 9JY.

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