The directors present the strategic report for the year ended 31 December 2024.

The principal activity of Static Control Components (Europe) Limited (SCC Europe) is the distribution of printer cartridge parts and supplies manufactured by Static Control Components Inc. Ninestar Corporation and other approved vendors.

Ninestar Corporation (Ninestar), a company publicly listed on China’s Shenzhen Stock Exchange (Shenzhen stock code 002180), and one of the world’s largest suppliers of printing cartridges and chips acquired Static

Control Components Inc. (SCC Inc.) in July 2015.

SCC Inc. supplies imaging materials and components to the aftermarket printing supplies industry and operates

from Sanford, North Carolina in the United States.

SCC Europe acts as SCC Inc.'s distributor in Europe, and offers a complete line of toner cartridge products, components, and support services to customers around the world who recycle printer cartridges. The Company's principal activity therefore continues to be the distribution of products supplied by SCC Inc. and Ninestar as well as other components required by the aftermarket imaging industry.

To promote its business, SCC Europe established subsidiaries in a number of territories including Hong Kong,

South Africa, and Turkey. The Turkish entity ceased trading in 2019 and was subsequently liquidated in February 2022. The South African entity also ceased trading in 2019 and the company was liquidated in February 2024. The financial impact of the closures is reflected in note 11 to these financial statements on page 23.

In 2024 the company established a warehouse and registered a branch in Poland to better service its customer base following the expiration of the lease and subsequent closure of the company’s UK warehouse

Turnover has declined during the year to £24 million (2023 £26 million) as set out in the Statement of Comprehensive Income on page 9.

Gross margins declined to 28% in 2024 due to supply chain problems resulting in higher import costs (2023 37%) and the Company’s position at the end of the year shows a reduction in net assets, due to the supply chain issues. and the cost of relocating the Company’s warehouse to Poland.

As a supplier of products to the printing cartridge remanufacturing industry, the company is potentially exposed to an accusation of infringing the intellectual property rights enjoyed by major manufacturers of printers. The directors of SCC Inc. and SCC Europe maintain a thorough and comprehensive control environment designed to prevent any such exposure crystallising.

The Company uses many business specific KPIs at an operational level to assist management with the running of the business. The board relies on KPIs that focus on the financial performance of the Company. The main KPIs utilised are as follows:

The Company utilises non financial indicators to monitor customer service levels including order fill rates, back orders and on time deliveries. The business has strong and long term relationships with our customer base which leads to a high level of customer retention.

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

The Directors present their report and the financial statements for Static Control Components (Europe) Limited (the "Company") for the year ended 31 December 2024.

The Company established a branch in Poland in June 2024.

The results for the year are set out on page 9.

No dividends were paid in the current or prior year.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Objectives and policies

The Company's Directors continue to keep the risks to which Static Control Components (Europe) Limited is exposed under close review and take such steps as they believe will assist the growth of the Company's business.

The Company operates in a competitive industry and therefore faces some price risk. This is mitigated by utilising the Group's global purchasing power to negotiate improved pricing from vendors in addition to benefits the Company derives from the Group's low-cost manufacturing facilities.

The global nature of the Company's business means that it is exposed to currency risk. The Directors have arranged for the Company’s purchases from Group to be invoiced in Euro’s to mitigate some of the currency risk.

Liquidity and cash flow risk are managed through support from Group from which the majority of purchases are made. In January 2024 the company agreed a long term loan facility with SCC Inc of $4million repayable in January 2029 to replace the facility with Bank of America which ended in April 2024

Customer credit risks are minimised by utilisation of credit insurance for major customers and ensuring that the Company's exposure to any individual customer is not significant as a percentage of the total accounts receivable.

The Company will continue to be the distributor of products sourced by Static Control Components Inc. and Ninestar Corporation in addition to other components required by the aftermarket imaging industry for the foreseeable future.

The auditor, HJS Chartered Accountants, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Employees are regularly provided information on the sales performance of the business during management team briefings in addition to other matters of interest or concern to them.

The Directors have considered the position regarding the Company's ability to continue as a going concern, taking account of the current financial position, banking facilities and recent trading results, and their assessment of the future prospects of the Company. The Directors have also received confirmation from Ninestar that it will continue to provide the Company with the necessary support to enable it to continue trading and meet its liabilities as they fall due for a period of at least 12 months from the date of signing of these financial statements. The Directors have concluded therefore that the going concern basis of preparation is appropriate.

We have audited the financial statements of Static Control Components (Europe) Ltd (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's 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 UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to

report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the directors' report has 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 directors' 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 directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine 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 directors are 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 directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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 auditor's 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK regulatory principles. We also considered the laws and regulations which have a direct impact on the financial statements such as the Companies Act 2006.

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management bias in accounting estimates and judgmental areas of the financial statements.

Audit procedures performed by the audit engagement team included:

• Discussions with senior management, including consideration of known or suspected instances of noncompliance with laws and regulations or instances of fraud;

• Identifying and testing journal entries based on risk criteria;

• Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing;

• Testing transactions entered into outside of the normal course of the company's business;

• Reviewing any potential litigation or claims against the entity which indicate any potential noncompliance issues.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or though collusion.

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

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 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 auditor's 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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Static Control Components (Europe) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ashbrook House, Westbrook Street, Blewbury, Didcot, Oxfordshire, OX11 9QA.

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.

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 £000.

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

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Ninestar Corporation. These consolidated financial statements amay be obtained from SCC Europe's registered office.

The Directors have considered the position regarding the Company's ability to continue as a going concern, taking account of the current financial position, banking facilities and recent trading results, and their assessment of the future prospects of the Company. The Directors have also received confirmation from Ninestar that it will continue to provide the Company with the necessary support to enable it to continue trading and meet its liabilities as they fall due for a period of at least 12 months from the date of signing of these financial statements. The Directors have concluded therefore that the going concern basis of preparation is appropriate.true

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

The Company recognises revenue when the amount of revenue can be reliably measured; it is probable that future economic benefits will flow to the entity; and specific criteria have been met for each of the Company's activities.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets. A provision is made for any impairment loss and taken to the profit and loss account.

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 only enters into Basic financial instrument transactions.

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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

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.

The tax expense represents the sum of the tax currently payable and deferred tax.

The current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period.

Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in the tax assessments.

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.

The company's liability for current and deferred tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the period of the lease.

Incentives received to enter into an operating lease are credited to the Statement of Comprehensive Income, to reduce the lease expense, on a straight line basis over the period of the lease.

The Company has taken advantage of the exemption in respect of lease incentives on leases in existence on the date of transition to FRS 102 (1 January 2014) and continues to credit such lease incentives to the profit and loss account over the period to the first review date on which the rent is adjusted to market rates.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

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

Their aggregate remuneration comprised:

The Directors are remunerated by the Group for services to the Group as a whole. It is not appropriate to apportion these amongst the entities and so no recharge has been made.

The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

The tax charge in the year is in relation to operations that are carried out in the Poland warehouse for the year.

The applicable tax rate for the Parent Company is the enacted UK corporate income tax rate of 25%. The reported effective tax rate is based on the relative portion of the group companies’ contributions to profit before tax and the applicable tax rates and regulations in the countries concerned.

The OECD Pillar Two legislation was enacted in UK and has come into effect on 1 January 2024. Pillar Two introduces a minimum effective tax rate system where multinational groups with consolidated revenue over EUR 750m in at least two out of the last four years are subject to a minimum effective tax rate of 15 percent. Ninestar's net sales for 2024 exceeded this threshold for the second consecutive year. As a result, the Pillar Two legislation will be applicable for Static Control Components (Europe) Limited as of 1 January 2025.

Static Control Components (Europe) Limited applies the IAS12 exception to recognising and disclosing information about deferred assets and liabilities related to Pillar Two income taxes. The impact on the company is expected to be immaterial. The company registered for the Pillar 2 scheme and is in preparation to comply with the Pillar Two reporting requirements.

Factors that may affect future tax charges

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability settled, based on the tax rates that have been enacted or substantively enacted at the Balance Sheet date.

There is no material difference between the net realisable value of stocks and the amounts stated above.

Amounts owed by group undertakings are unsecured, interest free and have no fixed date of repayment. Consequently, they are treated as repayable on demand.

Trade debtors are stated after provision for impairment of £187,879 (2023 - £210,000).

Bank of America holds three fixed charges over all the current and future assets of the Company, relating to a loan given to this Company and its subsidiary, Static Control Components (Hong Kong) Limited.                    

These charges have consequently been satisfied during the year on 26 April 2024.                    

An additional charge with NatWest was applied to the Company on 24 January 2024.                                                                            

As noted in the directors report the company has taken out a loan facility of $4 million due for repayment in 2029, this is included above with interest charges being expensed.

Other provisions are in respect of a dilapidation provision.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:

All shares are entitled to equal voting rights and distributions of the Company's profits.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The Company has taken advantage of the exemption from disclosing related party transactions with other companies that are wholly owned within the Group.

There are no other related party transactions which require disclosure.

The Company is a subsidiary of Static Control Components Limited. Ninestar Corporation, a company incorporated in China, is the ultimate controlling company and the largest and smallest group of undertakings for which group accounts are drawn up. The address of its registered office is No.3883 Zhuhai Avenue, Xiangzhou District, Zhuhai, Guangdong, China. These are publicly available at SCC Europe's registered offices.