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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2024
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
COMPANY INFORMATION
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
CONTENTS
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors present their Strategic Report and the financial statements of Surface Technology International Limited ("STI" or "Company") for the year ended 31 December 2024.
The principal activity of the Company during the year was that of the provision of contract electronic manufacturing services for the high-reliability electronics industry.
The principal activities of the Company are not expected to change in the foreseeable future.
The Company's principal financial instruments comprise bank balances, trade debtors, trade creditors, finance lease agreements, other loans and asset based lending facilities. The main purpose of these instruments is to raise funds and to finance the Company's operations. The Company is not significantly exposed to price risk due to the nature of its trading operations and contract arrangements. The Company's approach to managing other risks applicable to the financial instruments concerned is shown below.
a) Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
b) Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
c) The conflict between Russia and Ukraine poses a risk to STI in relation to supply chain issues, with possible delays or disturbance to receiving components from our suppliers. This continues to be monitored and we expect little impact to our supply chain. In addition, sadly the conflict may result in additional business for STI, due to the nature of our work. We continue to monitor this with close customer contact.
d) Global political instability also poses a risk to the business, most recently through tariffs that will impact global prices, so far there has been minimal impact as little trade goes to the US however where this impacts increased costs STI will always look to work collaboratively with its customers and suppliers to minimise price and cost impacts.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
e) Inflation rate increase risk, pushing up costs of materials, labour, and other fixed costs. STI continue to monitor the cost base and ensure any additional costs are passed onto our customers.
f) Interest rate risk for the Group relating to the increases in the UK Bank of England Base Rate will impact our asset-based lending facilities, and other loans.
It is the policy of the Company to settle terms of payment with suppliers on a timely basis in the ordinary course of business, and to agree appropriate terms and conditions in advance with its suppliers. The Company endeavours to make payment in accordance with those terms and conditions provided that the supplier has complied with them. Suppliers and their payment terms are looked at on an individual basis and regularly reviewed. The average payment period of suppliers is 60 days. A copy of the Company's standard payment practice can be obtained from the Company's premises.
Stakeholders
The Board of Directors, in line with their duties under s172 of the Companies Act 2006, recognises that the long-term sustainable success of the Company is dependent on the way it interacts with a large number of stakeholders.
Our core values provide our people with a common understanding of what matters to us and how we work:
∙EXCELLENCE: Doing your best to exceed expectations
∙CUSTOMER FOCUS: Building strong partnerships with customers
∙INTEGRITY: Honesty and Trustworthiness
∙CONCERN FOR OTHERS: Respecting and caring for others
Our responsibilities extend to our customers, employees, suppliers, the local community, and the environment around us. We engage with our stakeholders in a variety of ways, including:
Our Customers
We will support our customers at all stages of the manufacturing journey, from concept design, through production, test, and system integration, to realise the most innovative products and enable them to be at the forefront of technology.
Our Employees
We will empower our employees to make decisions and provide opportunities for both personal and career development. We aim to create a varied, interesting place to work and a culture based on our 4 core values; Excellence, Customer Focus, Integrity and Concern for others.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Our Suppliers
For our suppliers we will build long-lasting, resilient, and responsive relationships, based on trust and mutual benefit, to withstand the pressures of industry.
Our Shareholders
For our shareholder we will create value by growing the Company organically and becoming more efficient in providing our capabilities.
The Company has seen a continuation of challenges in 2024, delivering to both our existing and new customers. The global electronic component lead times and demand have, and continue to impact our business opportunities, with delays in receiving components from our suppliers.
However, we have seen an improvement with most components but not all affecting the 2024 results less than in 2023. This continues to be factored into future lead times where possible, but it is expected to continue having an impact on the Company and the industry. However, the Company continues to operate efficiently, supporting the customer base and future requirements. Customers are providing orders to match the longer lead times resulting in greater visibility of future demand.
This report was approved by the board and signed on its behalf.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The directors who served during the year were:
Since the year end, the following directors have been appointed:
J Cooke (appointed 10 September 2025)
R Mears (appointed 10 September 2025)
The Company has indemnified the directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in section 234 of the Companies Act 2006. Such qualifying third-party indemnity provision was in force during the year and is in force as at the date of approving the directors' report.
No dividends were paid or proposed during the current or comparative year.
During the year, the policy of providing employees with information about the Company has been continued through internal media methods in which employees have also been encouraged to present their suggestions and views on the Company's performance. Regular meetings are held between local management and employees to allow a free flow of information and ideas.
UK energy use and associated greenhouse gas emissions
Current UK based annual energy usage and associated annual greenhouse gas (“GHG”) emissions are reported pursuant to the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (“the 2018 Regulations”) that came into force 1 April 2019.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Organisational boundary
In accordance with the 2018 Regulations, the energy use and associated GHG emissions are for those assets within the UK only as defined by the operational control approach. This includes the manufacturing sites in Hook and Poynton, along with Company owned and personal vehicles used for business mileage (referred to as "grey fleet").
Reporting period
The annual reporting period is 1 January to 31 December each year and the energy and carbon emissions are aligned to this period.
Quantification and reporting methodology
The 2019 UK Government Environmental Reporting Guidelines and the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) were followed. The 2024 UK Government GHG Conversion Factors for Company Reporting were used in emission calculations as these relate to the majority of the reporting period. The report has been reviewed independently by Zenergi Limited (trading as Briar Consulting Engineers Limited).
Electricity and gas consumption were based on invoice records and half hourly data where applicable, while mileage was used to calculate energy and emissions from fleet vehicles and grey fleet. Where data falls outside of the reporting period, the apportioning technique has been applied to ensure alignment. Where gaps in data were identified, the direct comparison technique has been applied and noted on the carbon calculator provided with this report. Gross calorific values were used except for mileage energy calculations as per Government GHG Conversion Factors.
The emissions are divided into mandatory and voluntary emissions according to the 2018 Regulations, then further divided into the direct combustion of fuels and the operation of facilities (scope 1), indirect emissions from purchased electricity (scope 2) and further indirect emissions that occur as a consequence of Company activities but occur from sources not owned or controlled by the organisation (scope 3). The Company has opted not to disclose voluntary emissions.
Breakdown of energy consumption used to calculate emissions (KWH):
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Breakdown of emissions associated with the reported energy use (tCO2e)
The intensity ratio is total gross emissions in metric tonnes CO2e (mandatory emissions) per total million-pound (£m) turnover. The turnover and production relates to UK operations only to align with the energy and emission reporting boundary. These metrics are considered the most relevant to the Company’s energy consuming activities and provides a good comparison of performance over time and across different organisations and sectors.
In the year 2024, the Company have undertaken the following actions to improve energy efficiencies
∙Lighting across all sites is being converted to LED which uses less energy than traditional incandescent or florescent bulbs. This project is on-going, with few areas still using florescent bulbs.
No other significant capital investments have been made in 2024.
The Directors have reviewed the current performance of the business as well as future expectations. The Company has prepared detailed cashflow forecasts, including downside scenarios impacting revenue and costs, to ensure that sufficient finance will be available to meet obligations as they fall due, in line with the Company’s business plan, up until at least 31 December 2026. The Company has significant headroom within its existing financing arrangements which are on track to reduce further during the year ended 31 December 2025.
The Directors therefore consider that the Company will be able to settle its liabilities as they fall due and has adequate resources to continue in business for a period of at least 12 months from the date of approval of these financial statements.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙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 transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors have chosen to set out in the Strategic Report information required to be stated in the Directors Report including likely future developments in the business.
The auditors, PKF Smith Cooper Audit Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
This report was approved by the board and signed on its behalf.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SURFACE TECHNOLOGY INTERNATIONAL LIMITED
We have audited the financial statements of Surface Technology International Limited (the 'Company') for the year ended 31 December 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 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).
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.
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 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.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SURFACE TECHNOLOGY INTERNATIONAL LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
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 Directors' report.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SURFACE TECHNOLOGY INTERNATIONAL LIMITED (CONTINUED)
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.
Based on our understanding of the Company and industry, key laws and regulations that we have identified included:
∙Companies Act 2006;
∙Tax legislation; and
∙Health and safety and employment legislation.
We identified that the principal risk of fraud or non-compliance with laws and regulations related to:
∙Management bias in respect of accounting estimates and judgements made;
∙Management override of controls; and
∙Posting of unusual journals or transactions.
We focused on those areas that could give rise to a material misstatement in the Company's financial statements. Our procedures included, but were not limited to:
∙Enquiry of management and those charged with governance in relation to actual and potential litigation and claims, including instances of non-compliance with laws and regulations and fraud;
∙Reviewing minutes of meetings of those charged with governance, where available;
∙Reviewing legal expenditure in the year to identify instances of non-compliance with laws and regulations and fraud;
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and
∙Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias, in particular the valuation of stocks, including stock provisions and labour absorption rates, provisions for dilapidations and the recoverability of amounts due from group undertakings.
It is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SURFACE TECHNOLOGY INTERNATIONAL LIMITED (CONTINUED)
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.
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 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.
for and on behalf of
Statutory Auditors
Cornerblock
2 Cornwall Street
B3 2DX
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
REGISTERED NUMBER: 02292621
BALANCE SHEET
AS AT 31 DECEMBER 2024
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
REGISTERED NUMBER: 02292621
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 36 form part of these financial statements.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Surface Technology International Limited, is a private company, limited by shares, registered in England and Wales, United Kingdom. The address of the registered office and the Company's registration number are given in the company information page to these financial statements. The nature of the Company's operations and principal activities are described in the Strategic Report on page 1.
The Company's principal place of business is Osborn Way, Hook, Hampshire, RG27 9HX.
2.Accounting policies
The financial statements have been prepared 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 judgement in applying the Company's accounting policies (see note 3).
The financial statements are presented in Pound Sterling (£) which is the functional currency of the Company and amounts have been presented in round thousands (£'000s).
The following principal accounting policies have been applied:
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 STI Enterprises Holdings Limited (formerly Sand 2023 Limited) as at 31 December 2024 and these financial statements may be obtained from 4th Floor, 24 Old Bond Street, London, W1S 4AW.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The Directors have reviewed the current performance of the business as well as future expectations. The Company has prepared detailed cashflow forecasts, including downside scenarios impacting revenue and costs, to ensure that sufficient finance will be available to meet obligations as they fall due, in line with the Company’s business plan, up until at least 31 December 2026. The Company has significant headroom within its existing financing arrangements which are on track to reduce further during the year ended 31 December 2025.
The Directors therefore consider that the Company will be able to settle its liabilities as they fall due and has adequate resources to continue in business for a period of at least 12 months from the date of approval of these financial statements.
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively.
Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Intangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated amortisation and impairment losses.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of five years.
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. 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.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the Balance Sheet and the amount of the provision as an expense.
Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. 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 assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for 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. Financial assets are assessed for indicators of impairment at each reporting date.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs.
Financial liabilities which constitute a financing arrangement, including other loans, which do not carry a market rate of interest, are discounted to present value using a market rate of interest for a similar debt instrument, which is amortised over the contractual term of financial liability. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Stock provisions are based on an ageing calculation, which utilises the “purchase date” for materials, removing items which have short term demand. Work in progress includes capitalised labour added to the valuation using estimated labour cost on incomplete works orders included as work in progress at the year end. At 31 December 2024, the carrying value of raw materials and consumables is £4,592,000 (2023: £9,303,000) and the carrying value of work in progress is £3,979,000 (2023: £4,166,000). The carrying value of raw materials and consumables is stated net of provisions of £4,824,000 (2023: £4,023,000) and work in progress is stated net of provisions of £118,000 (2023: £118,000). Deferred tax assets are calculated based on management's best estimate of future taxable profits expected in the period for which they have prepared their detailed trading forecasts, which for the purposes of these financial statements includes the year ended 31 December 2025. At 31 December 2024, the carrying value of deferred tax assets is £900,000 (2023: £900,000). Included in other loans is a long-term loan from a company under common control which is interest free. The directors consider that this loan is below market rate for a similar debt instrument and have discounted this loan back to present value using an interest rate of 10.25%. In arriving at this estimate, the directors have considered the interest rates attached to the Company's other long-term financing facilities and have concluded that this interest rate reflects the market rate for a similar debt instrument. The discounted amount has been recognised as a capital contribution within other reserves.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Analysis of turnover by country of destination:
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
5.Exceptional items (continued)
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
14.Taxation (continued)
As disclosed in note 24, the Company has significant trading losses carried forward, which are expected to offset against future taxable trading profits of the Company.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
20.Creditors: Amounts falling due within one year (continued)
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 32
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Share premium account
Capital redemption reserve
Other reserves
Profit and loss account
The Company has given a cross-guarantee in relation to borrowings entered into by its ultimate parent undertaking, STI Enterprises Holdings Limited ("STIEHL"), its immediate parent undertaking, STI Enterprises Limited ("STIEL") and a fellow subsidiary, Surface Technology International Philippines Inc ("STIP"). The value of the amounts guaranteed at 31 December 2024 by entity amounted to £13,000 (2023: £13,000) for STIEHL, £218,000 (2023: £218,000) for STIEL and £nil (2023: £nil) for STIP.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension charge amounted to £409,000 (2023: £443,000). Contributions amounting to £65,000 (2023: £67,000) were payable to the fund at the year end and are included in creditors.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
31.Related party transactions (continued)
The Company’s immediate parent undertaking is STI Enterprises Limited, a company incorporated in England, United Kindom, which has a registered office address of 4th Floor, 24 Old Bond Street, London, W1S 4AW.
The Company’s ultimate parent undertaking is Rcapital Nominees Limited, a company incorporated in England, United Kindom, which has a registered office address of 4th Floor, 24 Old Bond Street, London, W1S 4AW. The smallest and largest group, in which the results of the Company are consolidated, is the group headed by STI Enterprises Holdings Limited (formerly Sand 2023 Limited), a company incorporated in England, United Kingdom. The consolidated financial statements may be obtained from the registered office address of the parent undertaking which is 4th Floor, 24 Old Bond Street, London, W1S 4AW.
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