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Registered number: 05466873










STM GROUP (UK) LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2024

 
STM GROUP (UK) LIMITED
 
 
COMPANY INFORMATION


Director
Mr P B Simpson 




Registered number
05466873



Registered office
Solar House
1st Floor

Romford Road

London

E15 4LJ




Independent auditors
MHA
Statutory Auditors

6th Floor

2 London Wall Place

London, United Kingdom

EC2Y 5AU




Bankers
HSBC Bank Plc
59-61 The Mall

London

E15 1XF





 
STM GROUP (UK) LIMITED
 

CONTENTS



Page
Strategic report
 
1 - 3
Director's report
 
4 - 6
Independent auditors' report
 
7 - 9
Statement of comprehensive income
 
10
Balance sheet
 
11
Statement of changes in equity
 
12
Notes to the financial statements
 
13 - 27


 
STM GROUP (UK) LIMITED
 
 
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 AUGUST 2024

Introduction
 
The Director presents his Report and Financial Statements for the 7 months ended 31 August 2024.

Business review
 
The 7-month reporting period is as a direct result of the previous year business integration needs, which resulted in a pre-tax loss, primarily emanating from company payroll process changes. The last 7 months have seen a period of strategic consolidation for STM Group (UK) Ltd, with the positive impact of continuously improving financial disciplines having been applied, together with a healthy pipeline of new business opportunities, thus ensuring effective optimum business control and maximum profitability. 
The company now has a stable platform upon which to grow both revenue and profits, with a review of organisational commercial processes enabling greater visibility on anticipated new business financial contribution. This has enabled improved planning and forecasting, with resultant ongoing structural reviews and prudent financial management, enabling the introduction of efficiencies to reduce overhead costs.
I am very confident that STM is in a strong trading position, with good operating and net margins, together with effective cash management, with anticipated healthy profits emphasised in future results. The STM Group (UK) Ltd Board of Directors are pleased that those actions taken, as a direct result of the strategic review, have had a positive impact on both performance and organisation reputation (critical for future growth).  

Principal risks and uncertainties
 
It is also pleasing to report that the 10% increase to the National Minimum Wage (effective April 2024) has, in the main, been accepted by customers as exceptional an cost, without any adverse impact on contract margins. Further increases to National and Real Living Wages costs (as well as a material rise in Employers National Insurance contributions) in April 2025, will similarly need to be factored into contract negotiations.
An increased level of customer focus on Sustainability and Carbon Reduction has become evident, with the company needing to regularly demonstrate its commitment to these requirements
Financial risk
Due to the nature of the industry in which the company operates, there are various financial risks which the company may be exposed to, including credit risk, liquidity risk and interest risk.
Credit risk
The company offers credit terms to its customers which enable payment after delivery of the supply of goods and services. Strong ongoing customer relationships helps reduce the level of exposure to credit risk..
Liquidity risk
The company also seeks to ensure sufficient liquidity is available to meet day-to-day operational and future potential development needs, in the form of invoice financing arrangements used to provide short-term debt flexibility.
Interest risk
The company keeps interest rate exposure under review to ensure this is factored into any business decisions.

Page 1

 
STM GROUP (UK) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024

Financial key performance indicators
 
During the current reporting (7 month) period, the company made a pre-tax profit of £807,219 which reflects an encouraging improvement on the previous year pre-tax Loss of £300,278. This is a result of improved business management, combined with a focus on delivering the 5 Year Business Plan. Despite the challenging times, the business has continued to invest in people and infrastructure, whilst demonstrating admirable control over key costs. The Balance Sheet has also improved, with not only increased profit for the year but also, equally importantly, the effective management of both debt and liquidity. These improvements are, clearly, evident when compared to previous financial years.

Page 2

 
STM GROUP (UK) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024

Other key performance indicators
 
The companies other key performance indicator is considered to be its net assets position. This is as follows for the last two years:
                                         
  31 August 2024          31 January 2024
Net Assets/(Liabilities)            £388,186                          (£123,956)


This report was approved by the board and signed on its behalf.



Mr P B Simpson
Director

Date: 12 February 2025

Page 3

 
STM GROUP (UK) LIMITED
 
 
 
DIRECTOR'S REPORT
FOR THE PERIOD ENDED 31 AUGUST 2024

The director presents his report and the financial statements for the period ended 31 August 2024.

Director's responsibilities statement

The director is responsible for preparing the Strategic report, the Director's report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the director is required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable him to ensure that the financial statements comply with the Companies Act 2006He is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the period, after taxation, amounted to £512,142 (31 Jan 2024 - loss £303,540).

No dividends were paid in the year (year ended 31 Jan 2024: £Nil).

Director

The director who served during the period was:

Mr P B Simpson 

Future developments

The company is looking to grow each year. The Director considers that the company is well positioned to keep the ongoing uncertainty of the economic climate following Brexit minimal.
The company operates in a highly competitive market and profit margins are constantly squeezed. The Director is therefore conscious that costs and overheads are constantly monitored to maintain a level of profitability within the company. The Director expects the way forward for growth is by building on current relationships and efficiency.

Page 4

 
STM GROUP (UK) LIMITED
 
 
 
DIRECTOR'S REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024

Engagement with employees

STM Group (UK) Limited is an Equal Opportunities and Diversity Aware employer, committed to promoting equality, diversity and inclusion amongst its workforce, whilst eliminating discrimination. Through its Support, Trust, Manage Vision, STM treats all employees as 'internal customers'. The STM aim is to create an inclusive environment and culture, with a diverse workforce that is representative of all sections of society, where everyone has the opportunity to fully contribute, and achieve, individual, full potential. 
It is STM's policy to treat all employees (and job applicants) fairly and equally, regardless of individual sex, sexual orientation, gender re-assignment, marriage or civil partnership, pregnancy or maternity, race, colour, creed, nationality, ethnic or national origin, marital status, religion or belief, age, disability, or union membership status.
STM's policy is to recruit disabled workers for those vacancies that they are able to fill. All necessary assistance with initial training courses is given. Once employed, a career plan is developed so as to ensure suitable opportunities for each disabled person. Arrangements are made, wherever possible, for retraining employees who become disabled, to enable them to perform work identified as appropriate for their aptitudes and abilities.
STM, consequently, commits to ensuring every employee is given equal opportunity in every aspect of their working role, with individual differences (and similarities) not only being embraced, but also where individual employee contribution is recognised, celebrated and valued. All STM employees will be given the necessary support and encouragement to develop individual ability and utilise unique talent.
This policy to all aspects of employment, recruitment and related Terms & Conditions of Employment, including pay and benefits, training, appraisals, career development, conduct at work, disciplinary and grievance procedures, termination of employment and all other aspects of employment.

Qualifying third party indemnity provisions

Director's liability and indemnity insurance was in force throughout the year to cover the directors and officers of
the company against actions brought against them in their personal capacities. Cover is not provided where the
individual has acted fraudulently or dishonestly.

Disclosure of information to auditors

The director at the time when this Director's report is approved has confirmed that:
 
so far as he is aware, there is no relevant audit information of which the Company's auditors are unaware, and

he has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsMHAwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Page 5

 
STM GROUP (UK) LIMITED
 
 
 
DIRECTOR'S REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024

This report was approved by the board and signed on its behalf.
 





Mr P B Simpson
Director

Date: 12 February 2025

Page 6

 
STM GROUP (UK) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF STM GROUP (UK) LIMITED
 

Opinion


We have audited the financial statements of STM Group (UK) Limited (the 'Company') for the period ended 31 August 2024, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 Company's affairs as at 31 August 2024 and of its profit for the period 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 Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the director's 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 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 director with respect to going concern are described in the relevant sections of this report.


Page 7

 
STM GROUP (UK) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF STM GROUP (UK) LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The director is responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic report and the Director's report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Director's report 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 Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Director's report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of director's 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 Director's responsibilities statement set out on page 4, the director is 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 director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the director is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 8

 
STM GROUP (UK) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF STM GROUP (UK) LIMITED (CONTINUED)


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


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

•     Obtaining an understanding of the legal and regulatory frameworks that the company operates in;
•     Reviewing key correspondence with regulatory authorities;
•     Testing for evidence of management override;
•     Enquiry of management to identify any instances of non-compliance with laws and regulations;
•     Enquiry of management around actual and potential litigation and claims;
•     Enquiry of management to identify any instances of known or suspected instances of fraud;
•     Discussing among the engagement team regarding how and where fraud might occur.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk
increases the more that compliance with a law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.



Atul Kariya FCCA (Senior statutory auditor)
  
for and on behalf of
MHA
 
Statutory Auditors
  
London

Date:
 
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313). 
12 February 2025
Page 9

 
STM GROUP (UK) LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 AUGUST 2024

Period ended 31 August 2024
Year ended 31 January 2024
Note
£
£

  

Turnover
 4 
24,213,395
32,167,701

Cost of sales
  
(19,480,416)
(27,374,768)

Gross profit
  
4,732,979
4,792,933

Administrative expenses
  
(3,344,614)
(5,057,249)

Exceptional administrative expenses
 11 
(586,191)
(37,341)

Operating profit/(loss)
 5 
802,174
(301,657)

Interest receivable and similar income
 8 
7,391
7,211

Interest payable and similar expenses
 9 
(2,346)
(5,832)

Profit/(loss) before tax
  
807,219
(300,278)

Tax on profit/(loss)
 10 
(295,077)
(3,262)

Profit/(loss) for the financial period
  
512,142
(303,540)

There was no other comprehensive income for 2024 (2024:£NIL).

The notes on pages 13 to 27 form part of these financial statements.

Page 10

 
STM GROUP (UK) LIMITED
REGISTERED NUMBER: 05466873

BALANCE SHEET
AS AT 31 AUGUST 2024

31 August
31 January
2024
2024
Note
£
£

Fixed assets
  

Tangible assets
 12 
321,802
285,402

  
321,802
285,402

Current assets
  

Debtors: amounts falling due within one year
 13 
8,334,420
9,977,517

Cash at bank and in hand
 14 
1,064,665
462,039

  
9,399,085
10,439,556

Creditors: amounts falling due within one year
 15 
(9,226,177)
(10,848,914)

Net current assets/(liabilities)
  
 
 
172,908
 
 
(409,358)

Total assets less current liabilities
  
494,710
(123,956)

Creditors: amounts falling due after more than one year
  
(32,873)
-

Provisions for liabilities
  

Deferred tax
  
(73,651)
-

  
 
 
(73,651)
 
 
-

Net assets/(liabilities)
  
388,186
(123,956)


Capital and reserves
  

Called up share capital 
 19 
2,000
2,000

Profit and loss account
 20 
386,186
(125,956)

  
388,186
(123,956)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Mr P B Simpson
Director

Date: 12 February 2025

The notes on pages 13 to 27 form part of these financial statements.

Page 11

 
STM GROUP (UK) LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 AUGUST 2024


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 February 2023
2,000
177,584
179,584


Comprehensive income for the year

Loss for the year
-
(303,540)
(303,540)
Total comprehensive income for the year
-
(303,540)
(303,540)



At 1 February 2024
2,000
(125,956)
(123,956)


Comprehensive income for the period

Profit for the period
-
512,142
512,142
Total comprehensive income for the period
-
512,142
512,142


At 31 August 2024
2,000
386,186
388,186


The notes on pages 13 to 27 form part of these financial statements.

Page 12

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

1.


General information

STM Group (UK) Ltd is a private company limited by shares incorporated in England and Wales in the United Kingdom. The registered office of the entity is Solar House, 1st Floor, Romford Road, London, E15 4LJ. The principal activity of the company is the provision of security services.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared on a going concern basis and under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The financial statements are presented in £ sterling, the functional currency, rounded to the nearest £1. 
The financial statements are for the period 1 February 2024 to 31 August 2024, in order to align the period end with that of its parent entity. The prior period was the year to 31 January 2024, hence the comparative figures are not entirely comparable

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of STM Group Holdings Limited as at 31 August 2024 and these financial statements may be obtained from Companies House.

Page 13

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.4

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.5

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.6

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.7

Pensions

Defined contribution pension plan

The Company operates a defined contribution pension plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 14

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

2.Accounting policies (continued)

 
2.8

Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


 
2.9

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.

Depreciation is provided on the following basis:

Motor vehicles
-
15%
Fixtures and fittings
-
10%
Office equipment
-
8%
Computer equipment
-
8%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 15

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

2.Accounting policies (continued)

 
2.10

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

  
2.11

Accrued income

Accrued income relates to Revenue accrued due to the timing difference relating to four weekly billing frequency when billing clients. The method used to calculate any accrued income is to extract data from the MIS for the dates to reflect the complete calendar month.

 
2.12

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.13

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.14

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.15

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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 trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for
Page 16

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

2.Accounting policies (continued)


2.15
Financial instruments (continued)

impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

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 the deduction of all its liabilities.

Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.

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

Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is
Page 17

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

2.Accounting policies (continued)


2.15
Financial instruments (continued)

due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The director considers that the critical accounting policies where judgments and estimations have been
applied relate to the tangible asset lives, in particular the useful economic life and residual values of office equipment, and the recoverability of trade debtors. The director has concluded that the asset values
and residual values are appropriate for tangible fixed assets and that trade debtors are appropriately
valued.


4.


Turnover

The whole of the turnover is attributable to provision of security services.

All turnover arose within the United Kingdom.

Page 18

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

5.


Operating profit/(loss)

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

Period ended 31 August 2024
Year ended 31 January 2024
£
£

Operating lease rentals
191,412
68,909

Exceptional items
566,191
37,341


6.


Auditors' remuneration

During the period, the Company obtained the following services from the Company's auditors:


Period ended 31 August 2024
Year ended 31 January 2024
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
26,000
27,000

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 19

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

7.


Employees

Staff costs were as follows:


Period ended 31 August 2024
Year ended 31 January 2024
£
£

Wages and salaries
16,266,786
22,921,365

Social security costs
1,463,550
1,823,038

Cost of defined contribution pension scheme
236,747
295,895

17,967,083
25,040,298


The director received no remuneration, pension or other benefits from the company in the period (January 2024: £nil) and accrues no pension benefits. The director is the only key management personnel of the company.

The average monthly number of employees, including the director, during the period was as follows:


Period ended 31 August 2024
Year ended 31 January 2024
            No.
            No.







Employees
1,132
925


8.


Bank interest receivable

Period ended 31 August 2024
Year ended 31 January 2024
£
£


Other interest receivable
7,391
7,211

7,391
7,211

Page 20

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

9.


Interest payable and similar expenses

Period ended 31 August 2024
Year ended 31 January 2024
£
£


Finance leases and hire purchase contracts
2,346
-

Other interest payable
-
5,832

2,346
5,832


10.


Taxation


2024
2024
£
£

Corporation tax


Current tax on profits for the year
221,426
-

Adjustments in respect of previous periods
-
3,262


221,426
3,262


Total current tax
221,426
3,262

Deferred tax


Origination and reversal of timing differences
73,651
-

Total deferred tax
73,651
-


Tax on profit/(loss)
295,077
3,262
Page 21

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
 
10.Taxation (continued)


Factors affecting tax charge for the period/year

The tax assessed for the period/year is higher than (2024 - higher than) the standard rate of corporation tax in the UK of 25% (2024 - 25%). The differences are explained below:

2024
2024
£
£


Profit/(loss) on ordinary activities before tax
807,219
(300,278)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%)
201,805
(75,070)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
118,803
13,690

Capital allowances for period/year in excess of depreciation
(15,775)
(6,805)

Utilisation of tax losses
(91,649)
(1,803)

Adjustments to tax charge in respect of prior periods
-
3,262

Short-term timing difference leading to an increase (decrease) in taxation
76,803
-

Non-taxable income
-
1,803

Provisions tax adjustment
5,090
-

Unrelieved tax losses carried forward
-
68,185

Total tax charge for the period/year
295,077
3,262


11.


Exceptional items

Period ended 31 August 2024
Year ended 31 January 2024
£
£


Legal expenses
86,101
37,341

Write off of intercompany balance
441,314
-

Prepayment adjustment
58,776
-

586,191
37,341

The exceptional items are split out by category as above.

Page 22

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

12.


Tangible fixed assets







Motor vehicles
Fixtures and fittings
Office equipment
Computer equipment
Total

£
£
£
£
£



Cost


At 1 February 2024
109,915
33,080
405,966
136,536
685,497


Additions
51,275
-
7,782
3,896
62,953



At 31 August 2024

161,190
33,080
413,748
140,432
748,450



Depreciation


At 1 February 2024
95,384
29,050
219,680
55,981
400,095


Charge for the period
3,178
455
12,862
5,785
22,280


Charge for the period on financed assets
4,273
-
-
-
4,273



At 31 August 2024

102,835
29,505
232,542
61,766
426,648



Net book value



At 31 August 2024
58,355
3,575
181,206
78,666
321,802



At 31 January 2024
14,531
4,030
186,286
80,555
285,402

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


31 August
31 January
2024
2024
£
£



Motor vehicles
47,002
-


13.


Debtors

31 August
31 January
2024
2024
£
£


Trade debtors
3,959,107
6,014,478

Amounts owed by group undertakings
1,707,838
2,105,276

Other debtors
303,262
318,624
Page 23

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

13.Debtors (continued)


Prepayments and accrued income
2,364,213
1,484,305

Tax recoverable
-
54,834

8,334,420
9,977,517



14.


Cash and cash equivalents

31 August
31 January
2024
2024
£
£

Cash at bank and in hand
1,064,665
462,039

1,064,665
462,039



15.


Creditors: Amounts falling due within one year

31 August
31 January
2024
2024
£
£

Trade creditors
587,897
3,480,312

Corporation tax
221,830
-

Other taxation and social security
2,515,016
1,008,611

Obligations under finance lease and hire purchase contracts
9,229
-

Other creditors
5,835,204
4,416,924

Accruals and deferred income
57,001
1,943,067

9,226,177
10,848,914


The bank overdraft is secured on the assets of the company. Obligations under finance leases are secured on the assets to which they relate.


16.


Creditors: Amounts falling due after more than one year

31 August
31 January
2024
2024
£
£

Net obligations under finance leases and hire purchase contracts
32,873
-

32,873
-


Page 24

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

17.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

31 August
31 January
2024
2024
£
£


Within one year
9,229
-

Between 1-5 years
32,873
-

42,102
-


18.


Deferred taxation






2024


£






Charged to profit or loss
73,651



At end of year
73,651

The deferred taxation balance is made up as follows:

31 August
31 January
2024
2024
£
£


Accelerated capital allowances
73,651
-

73,651
-


19.


Share capital

31 August
31 January
2024
2024
£
£
Allotted, called up and fully paid



2,000 (2024 - 2,000) Ordinary shares of £1.00 each
2,000
2,000


Page 25

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

20.


Reserves

Profit and loss account

The Profit and loss account is represented by retained earnings. Changes in reserves are set out in the Statement of Changes in Equity.


21.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £236,747 (January 2024: £295,895). Contributions totalling £458,889 (January 2024: £6,005 receivable) were payable to the fund at the balance sheet date and are included in other creditors.


22.


Commitments under operating leases

At 31 August 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

31 August
31 January
2024
2024
£
£

Land and buildings


Not later than 1 year
220,417
247,101

31 August
31 January
2024
2024

£
£

Other operating leases


Not later than 1 year
26,874
15,144

Later than 1 year and not later than 5 years
46,919
-

73,793
15,144


23.


Transactions with directors

Interest of £7,391 (January 2024: £7,211) has been charged at commercial rates on overdrawn balances on an outstanding loan to the director, Mr P B Simpson. As at 31 August 2024, Mr P B Simpson owed the company £303,261 (January 2024: £295,633). The loan is unsecured and repayable on demand.

Page 26

 
STM GROUP (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

24.


Related party transactions

During the period, STM Cleaning Ltd, a limited liability company of which the director, Mr P B Simpson, is a shareholder, provided services to the company totaling £43,435 (January 2024: £2,596,655). STM Cleaning Ltd also received services from STM Group (UK) Ltd during the year totalling £nil (January 2024: £2,596,655). As at 31 August 2024, the STM Group (UK) Limited was owed £137,044 by STM Cleaning Ltd (January 2024: £534,653). These transactions were on normal commercial terms.


25.


Parent entity and controlling party

The company was under the control of the director, Mr P B Simpson, throughout the current and prior period, as a result of his control of the parent company, STM Group Holdings Ltd.
The largest and smallest groups in which the results of the company are consolidated are those headed by STM Group Holdings Ltd, with a registered office of Solar House, 1st Floor, Romford Road, London, E15 4LJ.

 
Page 27