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

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.

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.

The Company reported a small decrease in turnover levels while the wider Group reported a small increase in turnover levels during 2024 but since the year end the continued pressures on the UK’s manufacturing sectors and, in particular, the automotive sector in which a number of the Group’s customers operate, has impacted further growth. Disruptions for customers such as the JLR cyber-attack have also impacted the flow of work for the Group. This has inevitably brought additional pressures on the Group’s cash flows which continue to be managed with the support of creditors, including HMRC and the Group’s bankers, and its shareholders.

The Directors have prepared forecasts covering the year to 31 December 2026 and consider that these are based on attainable activity levels. However, having considered various economic forecasts, including those produced by Oxford Economics and allied Trade Associations, as well as the general uncertainties that prevail within the UK’s manufacturing sectors it is not anticipated that any upturn will be seen until the later part of 2026. Accordingly, the Directors and Shareholders have also considered what other options are available to them to ensure that the Group can withstand a further year of static activity.

One of the options explored has been to review the Group’s operational structure and, as a result, the decision has been taken to close the subsidiary company based in Ireland and move its operational facilities back to the UK, leaving a sales-based team in Ireland. The Directors continue to be aware of opportunities to realise other Group assets which are ancillary to the core machine sales operations and which could provide additional cashflow resource if required. We continue to work closely with our machine manufacturers to align cashflow patterns with the need to maintain adequate stock levels to provide a reactive lead-time for customers.

Having, to date, demonstrated our ability to manage working capital whilst experiencing fluctuating sales patterns and together with the underlying potential for further asset realisations if the need arose, the Directors have continued to adopt the going concern basis of accounting for the preparation of these financial statements.

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.

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.

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.

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.

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, 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.

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

Basic financial liabilities, including 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.

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.

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.

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

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.

Creditors totalling £22,191 (2023 - £37,184) are secured by an unlimited debenture. Creditors totalling £262,301 (2023 - £428,580) are secured by a charge over trade debtors.

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.

Material uncertainty related to going concern

We draw attention to note 1.2 which outlines the assumptions upon which management have based their assessment of the appropriateness of the use of the going concern basis of preparation for these financial statements. Their reliance on the successful outcome of these assumptions particularly in relation to there being a recovery in the confidence levels in the general economy or alternatively a successful outcome of management’s proposed mitigation strategies, indicates that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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 £1,348,828 (2023 - £1,602,457).

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 (2023 - £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.

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.

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.