Sterling Relocation LimitedLiquidiert

Sterling Relocation Limited

Oberding, Ortsteil Schwaig

Directors' report and financial statements 30 June 2012

STERLING RELOCATION LIMITED, NORTHOLT

Directors' report and financial statements

Registered number 02670177

30 June 2012

Contents

Directors' report

The directors present their directors' report and fmancial statements for the year ended 30 June 2012.

Principal activities

The principal activities of the Company are assignment management, international moving, storage, relocation and immigration services and furniture rental, specialising in the multinational corporate sector. The directors do not expect this to change in the foreseeable future.

Business review

The continuing challenging economic environment has led to a profit for the year before tax amounting to £768,000, compared to £942,000 in the prior year, a drop of 18.5%. Revenue decreased in the year by 9.0% as a result of reduced activity amongst core clients in the mobility sector. Margins improved in the current year (38.9%) against prior year (34.9%), due to an improved mix of services. Overheads increased by 3% primarily as a result of investment in new services.

The Sterling Group continues to build the brand, broaden the service portfolio and expand in overseas markets, with offices in 8 countries, including UK, US & Hong Kong, and further expansion in the Far East with a new operation in Singapore. Customer service, quality control and best business practices are achieved through continued development of the company's proprietary systems in conjunction with proactive focus on customer needs.

The directors expect the market to remain extremely competitive with the continuing instability of the global economy putting pressure on profitability and the level of corporate activity.

Financial risks

The Company's operations expose it to a variety of financial risks that include the effects of changes in credit risk, liquidity risk and interest rate risk. The Company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the Company by monitoring levels of debt finance and the related finance costs. The Company does not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting is applied.

Given the size of the Company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the Company's finance department.

Price risk

The Company is exposed to price risk due to normal inflationary increases in the purchase price of the goods and services it purchases.

Credit risk

The Company has implemented policies that require appropriate credit checks on potential clients before sales are made. The amount of exposure to any individual counterparty is subject to a limit, which is reassessed at least annually by the executive board.

Liquidity risk

The Company actively maintains a mixture of long-term and short-term debt finance that is designed to ensure the Company has sufficient available funds for operations and planned expansions.

Interest rate risk

The Company has both interest bearing assets and interest bearing liabilities. Interest bearing assets include only cash balances which earn interest at variable rate. The Company's debt is maintained at variable rates. The directors continually assess the exposure to interest rate variations and the methods of managing this.

Proposed dividend

The directors do not recommend the payment of a dividend (2011 £nil).

Directors

The directors who held office during the year were as follows:

Disclosure of information to auditor

The directors who held office at the date of approval of this directors' report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor isunaware; and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditor

Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and KPMG LLP will therefore continue in office.

Statement of directors' responsibilities in respect of the Directors' Report and the financial statements

The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial period. Under that law they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

Under Company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

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 enable them to ensure that the financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

KPMG LLP

8 Salisbury Square

London

ECAY 8BB

United Kingdom

Independent auditor's report to the members of Sterling Relocation Limited

We have audited the financial statements of Sterling Relocation Limited for the year ended 30 June 2012 set out on pages 6 to 18. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice).

This report is made solely to the Company's members as a body, in accordance with Chapter 3 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.

Respective responsibilities of directors and auditor

As explained more fully in the Directors' Responsibilities Statement set out on-page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditor.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's web-site al www.frc.org.uk/apb/scope/private.cfm

Opinion on financial statements

In our opinion the financial statements:

Opinion on other matters prescribed by the Companies Act 2006

In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

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

Chartered Accountants

8 Salisbury Square

London

EC4Y 4BB

Profit and Loss Account for the year ended 30 June 2012

The accounts have been prepared on an unmodified historical basis.

All turnover and results for the current period arose from continuing operations.

Balance Sheet at 30 June 2012

These financial statements were approved by the board of directors on 1I November 2012 and were signed on its behalf by:

Company registered number: 02670177

Statement of Total Recognised Gains and Losses for the year ended 30 June 2012

Notes (forming part of the financial statements)

1 Accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements, except as noted below.

Basis of preparation

The financial statements have been prepared in accordance with applicable accounting standards, and under the historical cost accounting rules.

The Company is exempt by virtue of s400 of the Companies Act 2006 from the requirement to prepare group financial statements. These financial statements present information about the Company as an individual undertaking and not about its group.

Under FRS 1 the Company is exempt from the requirement to prepare a cash flow statement on the grounds that a parent undertaking includes the Company in its own published consolidated financial statements.

As the Company is a wholly owned subsidiary of Halcyon Relocation Limited, the Company has taken advantage of the exemption contained in FRS 8 and has therefore not disclosed transactions or balances with entities which form part of the group (or investees of the group qualifying as related parties). The consolidated financial statements of Halcyon Relocation Limited, within which this Company is included, can be obtained from the address given in note 22.

Investments

Investments in subsidiary undertakings are stated at cost.

Tangible fixed assets and depreciation

Depreciation is provided to write off the cost less the estimated residual value of tangible fixed assets by equal instalments over their estimated useful economic lives as follows:

Foreign currencies

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the contracted rate or the rate of exchange ruling at the balance sheet date. Gains or losses on translation of short term trading balances are included in the profit and loss account, and gains or losses on translation of long term funding balances due with other group companies is recognised in the statement of total recognised gains and losses.

Leases

Operating lease rentals are charged to the profit and loss account on a straight line basis over the period of the lease.

Post-retirement benefits

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 amount charged to the profit and loss account represents the contributions payable to the scheme in respect of the accounting period.

Stocks

Stocks are stated at the lower of cost and net realisable value. Cost is based on the cost of purchase of goods, services and work performed on a first in, first out basis where applicable. Net realisable value is based on estimated revenue less additional costs to completion.

Taxation

The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19.

Research and development expenditure

Expenditure on research and development is written off to the profit and loss account in the year in which it is incurred. Development expenditure is capitalised only where there is a clearly defined project, the expenditure is separately identifiable, the outcome of the project can be assessed with reasonable certainty, aggregate costs are expected to exceed related future sales and adequate resources exist to enable the project to be completed.

Intangible fired assets and amortisation

Intangible fixed assets purchased separately from a business are capitalised at their cost and amortised to nil by equal annual instalments over their useful economic lives. IT development costs capitalised under intangible fixed assets are being amoritsed over their useful economic lives of 10 years.

Turnover

Turnover is stated net of value added tax and comprises fees receivable for services provided to clients. Turnover represents the value of services provided under contracts and is recognised when a substantial majority of the services have been performed.

Interest bearing borrowings

Immediately after issue debt is stated at the fair value of the consideration received on the issue of the capital instrument after deduction of issue costs. The finance cost of the debt is allocated to periods over the term of the debt at a constant rate on the carrying amount.

2 Analysis of turnover

Turnover is wholly attributable to the principal activity of the Company.

3 Notes to the profit and loss account

Auditor 's remuneration:

The Company incurs the audit charge for all UK subsidiaries of the group headed by Halcyon Relocation Limited.

4 Remuneration of directors

The emoluments of the highest paid director was £238,000 (2011: £272,000).

There were 2 directors in the year for whom the Company made payments into money purchase pension schemes (2011: 2).

5 Staff numbers and costs

The average number of persons employed by the company (including directors) during the year, analysed by category, was as follows:

The aggregate payroll costs of these persons were as follows:

6 Other interest receivable and similar income

7 Interest payable and similar charges

8 Taxation

Analysis of charge in period

Factors affecting the tax charge for the current period

The current tax charge for the period is lower (2011: lower) than the standard rate of corporation tax in the UK (25.5%, 2011: 27.5%). The differences are explained below.

The 2012 Budget on 21 March 2012 announced that the UK corporation tax rate will reduce to 22% by 2014. A reduction in the rate from 26% to 25% (effective from 1 April 2012) was substantively enacted on 5 July 2011, and further reductions to 24% (effective from 1 April 2012) and 23% (effective from 1 April 2013) were substantively enacted on 26 March 2012 and 3 July 2012 respectively.

This will reduce the company's future current tax charge accordingly and further reduce the deferred tax liability at 30 June 2012 (which has been calculated based on the rate of 24% substantively enacted at the balance sheet date).

9 Intangible Asset

10 Tangible fixed assets

11 Fixed asset investments

12 Stocks

There is no material difference between the replacement cost of stocks and the amounts stated above.

13 Debtors

Debtors include amounts owed by group undertakings of £8,752,000 (2011: £nil) due after more than one year.

14 Creditors: amounts falling due within one year

Bank loans of £398,000 (2011: £642,000) are secured by fixed and floating charges over assets of the company.

Included within cash at bank and other creditors is £1,371,000 (2011: £785,000) relating to cash held on behalf of clients.

Other creditors also includes £1,280,000 (2011: £828,000) of advanced payments in relation to factored trade debts which are secured by fixed and floating charges over the assets of the company.

15 Creditors: amounts falling due after more than one year

16 Provisions for liabilities

The company has a contractual obligation to renovate the building and warehouse at regular intervals during the lease as well as at the end of the lease, and a provision has been created to cover these dilapidiation costs. Dilapidation provisions of £175,000 at 30 June 2011 have been reclassified from accruals and defetTed income to provisions increasing net current assets at 30 June 2011 by £175,000. The directors consider this a better reflection of the nature of this liability.

The company has a contractual obligation to renovate the building and warehouse with regular interval and provision has been created to cover this potential liability.

The elements of deferred taxation are as follows:

17 Called up share capital

On 9 ^th August 2011 the company converted the 7,500 of issued "B" ordinary shares into 7,500 Ordinary shares of £1 each. "B" Ordinary shares carry no right to receive notice of or attend and vote at the general meetings of the Company. In all other respects, the "B" ordinary shares rank pari passu with the ordinary shares.

18 Reconciliation of reserves and shareholders' funds

19 Contingent liabilities

The Company has entered into cross guarantees to the bank in conjunction with Halcyon Relocation Limited and its fellow subsidiaries Sterling International Group Limited and Sterling International Holdings Limited. The maximum exposure as at 30 June 2012 was £4 m.

20 Commitments

Annual commitments under non-cancellable operating leases are as follows:

21 Pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the Company to the scheme and contributions to directors' individual money purchase schemes. Total contributions amounted to £171,000 (2011: £155,000).

Contributions amounting to £12,000 (2011: £13,000) were payable at the year end and are included in creditors.

22 Related party disclosures

During the year the company provided a personal loan to Jeremy Beglin, a director, amounting to £30,000 (2011: nil) which remained outstanding in full at the year end. Interest is accruing on this loan at a rate of 4% per annum.

23 Ultimate parent Company and parent undertaking of larger group of which the Company is a member

The Company is a subsidiary of Halcyon Relocation Limited which is the ultimate parent Company.

The largest and smallest group in which the results of the Company are consolidated is that headed by Halcyon Relocation Limited. The consolidated financial statements of this group are available to the public and can be obtained from Companies House.

The ultimate controlling party is R O H Morley.