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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2025
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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 2025
The Directors present their Strategic Report and the financial statements of Surface Technology International Limited ("STI" or "Company") for the year ended 31 December 2025.
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 2025
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 2025
For our suppliers, we will build long-lasting, resilient, and responsive relationships, based on trust and mutual benefit, to withstand the pressures of industry.
For our shareholders, we will create value by growing the Group organically and becoming more efficient in providing our capabilities.
Although the financial statements for year ended 31 December 2025 report a loss for the financial year of £1,125k (2024: loss of £2,920k) the underlying operational performance was positive with an EBITDA profit of £5,704k (2024: £1,350k) and EBITDA margin of 11.6% (2024: 2.4%). This performance has continued into 2026 with the Company forecasting further improvement for the year ended 31 December 2026. There were various exceptional activities that occurred during 2025 including a reduction in long term debt of £23,818k which became a capital contribution in other reserves, inter-company balances amortised in full impacting profit in the year and significant external debts repaid reflected in the balance sheet.
With the acquisition of the Company by Note AB in March 2026, the Company has investment support and a stable platform to undergo the next phase of growth. The Company has taken on several new customers and programmes following investment in business development made during 2025. By strengthening the Company’s relationships in the supply chain, although lead times remain long for certain components, the Company is in a strong position to respond to the challenges facing global electronics. With continued focus on sales and operational planning cycles and value chain mapping the Company is in a strong position to grow whilst controlling costs.
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 2025
The directors present their report and the financial statements for the year ended 31 December 2025.
The directors who served during the year were:
Since the year end, the following directors have been appointed:
F Frykstrand (appointed 19 March 2026)
N Owen (appointed 19 March 2026)
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 2025
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 2025 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 supplier invoices. Where gaps in data were identified, the direct comparison technique was applied, and additional estimates were made by calculating the average monthly consumption and applying the corresponding average conversion factor. Energy use and associated emissions from fleet vehicles and grey fleet were calculated using mileage claims and fuel card records. Grey fleet emissions were derived using a rate of £0.45 per mile, with average fuel costs applied to convert expenditure into litres for company-owned vehicles. LPG consumption for the forklift truck was calculated from delivery notes, and an adjustment has been applied to the 2024 emissions following the receipt of updated information to ensure accurate year-on-year comparison.
Gross calorific values were used except for mileage energy calculations as per Government GHG Conversion Factors. The emissions are divided into 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). Scope 2 emissions are reported using both the location-based method in accordance with the GHG Protocol.
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 2025
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. The other intensity ratio included in this report is metric tonnes CO2e (mandatory emissions) per 1,000 boards produced. 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 reporting period, January 2025 to December 2025, the Company has taken the following energy efficiency actions:
∙The site in Hook has instilled the use of an electric forklift truck and a small electric vehicle for on-site material movement. This enables the company to move away from fossil fuels while maintaining operational needs. Electric vehicles typically offer higher efficiency and lower operating emissions.
∙The company has completed LED lighting upgrades, delivering substantial energy savings compared to traditional lighting technologies, reducing both electricity consumption and maintenance costs.
The Company remains committed to reducing its carbon footprint and continues to look out for new energy saving and funding opportunities going forward.
The Directors have reviewed the current performance of the business and well as future expectations. The Company has prepared detailed cashflow forecasts, including downside scenarios impacting revenue and costs, to ensure that sufficient headroom will be available to meet obligations as they fall due, in line with the Company’s business plan, up until at least 31 December 2027.
Long-term debt has been repaid or forgiven during 2025 and on the 19 March 2026 any remaining debt has been repaid by Note AB and just an intercompany creditor remains. Note AB are a long-term owner for the Company providing not only financial support but investment for capital and growth.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR 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 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.
Details of post balance sheet events affecting the Company are disclosed in note 32.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The auditors, PKF Smith Cooper Audit Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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 2025, 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).
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 2025
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
REGISTERED NUMBER: 02292621
BALANCE SHEET
AS AT 31 DECEMBER 2025
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
REGISTERED NUMBER: 02292621
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2025
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 37 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 2025
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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 as at 31 December 2025 and these financial statements may be obtained from 1a Alma Road, Windsor, Berkshire, SL4 3HU.
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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 headroom will be available to meet obligations as they fall due, in line with the Company’s business plan, up until at least 31 December 2027.
Long-term debt has been repaid or forgiven during 2025 and on the 19 March 2026 any remaining debt has been repaid by Note AB and just an intercompany creditor remains. Note AB are a long-term owner for the Company providing not only financial support but investment for capital and growth. The intercompany balance with Note AB is not expected to be called in within the next 12 months and will be paid down with continued profit delivery.
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 the Statement of comprehensive income, 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 2025
2.Accounting policies (continued)
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, on a straight line basis, 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.
Page 19
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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 the Statement of comprehensive income 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.
Page 20
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Basic financial liabilities, which include trade and other creditors, 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.
Page 21
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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 2025, the carrying value of raw materials and consumables is £3,113,000 (2024: £4,592,000) and the carrying value of work in progress is £2,648,000 (2024: £3,979,000). The carrying value of raw materials and consumables is stated net of provisions of £3,818,000 (2024: £4,824,000) and work in progress is stated net of provisions of £118,000 (2024: £118,000). Deferred tax assets are calculated based on management's best estimate of future taxable profits expected based detailed trading forecasts. At 31 December 2025, the carrying value of deferred tax assets is £2,000,000 (2024: £900,000). At 31 December 2025, the Company was owed £17,436,000 (2024: £17,436,000) by a company which was previously part of the group to which the Company belongs. This company ceased trading in September 2024 and is in the process of being wound up. As a consequence of which, the directors have impaired the amounts owed by £17,436,000 to reflect the uncertainty in relation to the future recoverability of this amount. During the year, the directors have reassessed the recoverable amount of this balance, based on correspondence received from the liquidators, and have reversed previous impairments by £240,000, which reflects expected amounts likely to be recoverable.
Page 22
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Analysis of turnover by country of destination:
Page 23
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 24
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 25
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 26
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 27
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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.
Page 28
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 29
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 30
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 31
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
20.Creditors: Amounts falling due within one year (continued)
Page 32
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 33
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 34
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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 immediate parent undertaking, STI Enterprises Holdings Limited. The amount guaranteed at 31 December 2025 totalled £230,000 (2024: £13,000).
Page 35
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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 £431,000 (2024: £409,000). Contributions amounting to £75,000 (2024: £65,000) were payable to the fund at the year end and are included in creditors.
Page 36
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SURFACE TECHNOLOGY INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
31.Related party transactions (continued)
On 20 March 2026, the Company's ultimate parent undertaking, Note AB, settled outstanding bank loans, working capital facilities and other loans, funded with cash, and these amounts remain outstanding as amounts due to group undertakings, which are interest free and repayable on demand.
The Company’s immediate parent undertaking is STI Enterprises Holdings Limited, a company incorporated in England and Wales, United Kingdom, which has a registered office address of 1a Alma Road, Windsor, Berkshire, SL4 3HU.
At the balance sheet date the Comapny's ultimate parent undertaking was Rcapital Nominees Limited, a company incorporated in England and Wales, United Kingdom, which has a registered office address of 4th Floor, 24 Old Bond Street, London, W1S 4AW.
At the date of signing these financial statements the Comapny's ultimate parent company is Note AB (Publ), a company registered in Sweden, which has a registered office of Box 3691, Box 3691, Se-103 59, Stockholm, Sweden.
The smallest and largest group, in which the results of the Company are consolidated, is the group headed by STI Enterprises Holdings Limited, a company incorporated in England and Wales, United Kingdom. The consolidated financial statements may be obtained from the registered office address of the parent undertaking which is 1a Alma Road, Windsor, Berkshire, SL4 3HU.
Page 37
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