Power Ethernet Limited - Period Ending 2016-07-31

Registration number: 07197286

Power Ethernet Limited

Annual Report and Unaudited Financial Statements

for the Year Ended 31 July 2016
 

Power Ethernet Limited
Contents

Company Information 1

Directors' Report 2

Profit and Loss Account 3

Balance Sheet 4 to 5

Notes to the Financial Statements 6 to 11

Power Ethernet Limited
Company Information

Directors

D Bailey DP Frost DWP Hallahane KJ McKelvey CM Stanford

Company secretary

Redshield Business Solutions Limited

Registered office

New Oaks Southview Close Southview Road Crowborough East Sussex TN6 1HH

Page 1

Power Ethernet Limited
Directors' Report for the Year Ended 31 July 2016

The directors present their report and the unaudited financial statements for the year ended 31 July 2016.

Directors of the company

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

D Bailey

DP Frost (appointed 10 March 2016)

DWP Hallahane

KJ McKelvey

DC Rogoff (resignation 22 April 2016)

CM Stanford

M C W Stalker (appointed 22 April 2016 and resigned 23 May 2016)

Small company provisions

This report has been prepared in accordance with the small companies regime under the Companies Act 2006.

Approved by the Board on 11 October 2016 and signed on its behalf by:

.........................................
D Bailey
Director

Page 2

Power Ethernet Limited
Profit and Loss Account for the Year Ended 31 July 2016

		Note			2016 £			2015 £
Turnover		2			200,713			144,844
Cost of sales					(111,231)			(178,646)
Gross profit/(loss)					89,482			(33,802)
Administrative expenses					(378,609)			(383,237)
Operating loss		3			(289,127)			(417,039)
Loss on ordinary activities before taxation					(289,127)			(417,039)
Tax on loss on ordinary activities		5			51,177			43,792
Loss for the financial year		12			(237,950)			(373,247)

The notes on pages 6 to 11 form an integral part of these financial statements.
Page 3

Power Ethernet Limited
(Registration number: 07197286)
Balance Sheet at 31 July 2016

		Note			2016 £			2015 £
Fixed assets
Tangible fixed assets		6			1,201			1,982
Current assets
Stocks					49,960			82,324
Debtors		7			79,903			55,081
Cash at bank and in hand					37,275			50,915
					167,138			188,320
Creditors: Amounts falling due within one year		8			(31,328)			(49,656)
Net current assets					135,810			138,664
Total assets less current liabilities					137,011			140,646
Creditors: Amounts falling due after more than one year		9			(3,018,255)			(2,784,779)
Provisions for liabilities		10			(1,954)			(1,115)
Net liabilities					(2,883,198)			(2,645,248)
Capital and reserves
Called up share capital		11			1,000			1,000
Profit and loss account		12			(2,884,198)			(2,646,248)
Shareholders' deficit					(2,883,198)			(2,645,248)

These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the Financial Reporting Standard for Smaller Entities (effective 2015).

For the year ending 31 July 2016 the company was entitled to exemption under section 477 of the Companies Act 2006 relating to small companies.

The notes on pages 6 to 11 form an integral part of these financial statements.
Page 4

Power Ethernet Limited
(Registration number: 07197286)
Balance Sheet at 31 July 2016
......... continued

The members have not required the company to obtain an audit in accordance with section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

Approved and authorised for issue by the Board on 11 October 2016 and signed on its behalf by:

.........................................
D Bailey
Director

The notes on pages 6 to 11 form an integral part of these financial statements.
Page 5

Power Ethernet Limited
Notes to the Financial Statements for the Year Ended 31 July 2016
......... continued

1	Accounting policies

Basis of preparation

The financial statements have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective January 2015).

The accounts do not include a cash flow statement because the company, as a small reporting entity, is exempt from the requirements to prepare such a statement.

Going concern

Although the company's liabilities exceeded its assets at the balance sheet date, the financial statements have been prepared on a going concern basis on the assumption that the company will continue in operational existence for the foreseeable future.

The directors have reached this assessment on the basis of:

1. The continued support of its parent undertaking, En-Twyn Limited, which has confirmed its intention to provide such financial support as is necessary for the company to continue in operation for the foreseeable future and at least 12 months from the date of signing of these financial statements.

2. The forecasts for En-Twyn Limited and Power Ethernet Limited (collectively “the group”) to 31 July 2018, which, on the expectation of increased income from the group's principal product and further investment, indicate that the group will have sufficient financial resources to continue in operation during that period. The direcors are confident that the group, and the company, will be able to meet its liabilities as they fall due for a period of at least twelve months from the date of signing of these financial statements.

Accordingly, the directors consider it appropriate to prepare the financial statements for the company on a going concern basis.

Turnover

Turnover comprises revenue recognised by the company in respect of goods and services supplied, exclusive of Value Added Tax and trade discounts, during the period. Turnover is recognised upon delivery of the products and/or services to customers and when the appropriate terms and conditions of sale have been met. Where sales invoices have been presented by the company but the related products and/or services have not been provided to the customer in full, a deferral is made for that portion of products and/or services still to be provided to the customer.

Depreciation

Depreciation is provided on tangible fixed assets so as to write off the cost or valuation, less any estimated residual value, over their expected useful economic life as follows:

Asset class	Depreciation method and rate
Office equipment	33% reducing balance basis

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Page 6

Power Ethernet Limited
Notes to the Financial Statements for the Year Ended 31 July 2016
......... continued

Stock

Stock is valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving stocks. Net realisable value is based on selling price less anticipated costs to completion and selling costs.

Warranty provision

The company warrants only that goods shall at the time of delivery be free from defects in materials and workmanship provided that the instructions governing use of the goods have been followed.

The company makes provision for the anticipated cost of repairing or replacing any component found to be defective at the time of delivery.

Deferred tax

Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the company's accounts. Deferred tax is provided in full on timing differences which result in an obligation to pay more (or a right to pay less) tax at a future date, at the rates that are expected to apply when the timing differences reverse, based on the current tax rates and laws. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.

Foreign currency

Transactions in foreign currencies are recorded at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the closing rates at the balance sheet date. All exchange differences are included in the profit and loss account.

Hire purchase and leasing

Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over the lease term.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as 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. Where shares are issued, any component that creates a financial liability of the company is presented as a liability in the balance sheet. The corresponding dividends relating to the liability component are charged as interest expense in the profit and loss account.

Page 7

Power Ethernet Limited
Notes to the Financial Statements for the Year Ended 31 July 2016
......... continued

2

Turnover

During the year 45.57% of the company's turnover related to exports (2015 - 17.82%).

3	Operating loss

Operating loss is stated after charging:

		2016 £			2015 £
Foreign currency gains		(1,605)			(1)
Loss on sale of tangible fixed assets		21			-
Depreciation of tangible fixed assets		636			880

4	Directors' remuneration

The directors' remuneration for the year was as follows:

		2016 £			2015 £
Remuneration		70,128			108,334

5

Taxation

Tax on loss on ordinary activities

		2016 £			2015 £
Current tax
Corporation tax credit		(51,177)			(43,591)
Adjustments in respect of previous years		-			(201)
UK Corporation tax		(51,177)			(43,792)

Factors that may affect future tax charges

A deferred tax asset relating to tax losses carried forward has not been recognised in the financial statements as the directors do not consider it more likely than not that there will be sufficient future taxable profits to offset against these losses. The amount not recognised in the period was £1,877,000 (31 July 2015 - £1,742,000).

Reductions in the main rate of corporation tax are expected from 1 April 2020.

Page 8

Power Ethernet Limited
Notes to the Financial Statements for the Year Ended 31 July 2016
......... continued

6	Tangible fixed assets

		Office equipment £			Total £
Cost or valuation
At 1 August 2015		8,359			8,359
Disposals		(691)			(691)
At 31 July 2016		7,668			7,668
Depreciation
At 1 August 2015		6,377			6,377
Charge for the year		636			636
Eliminated on disposals		(546)			(546)
At 31 July 2016		6,467			6,467
Net book value
At 31 July 2016		1,201			1,201
At 31 July 2015		1,982			1,982

7

Debtors

		2016 £			2015 £
Trade debtors		25,434			1,986
Other debtors		54,469			53,095
		79,903			55,081

8	Creditors: Amounts falling due within one year

		2016 £			2015 £
Trade creditors		13,595			39,737
Other taxes and social security		6,449			9,463
Other creditors		11,284			456
		31,328			49,656

Page 9

Power Ethernet Limited
Notes to the Financial Statements for the Year Ended 31 July 2016
......... continued

9	Creditors: Amounts falling due after more than one year

		2016 £			2015 £
Amounts owed to group undertakings and undertakings in which the company has a participating interest		2,961,355			2,727,879
Other creditors		56,900			56,900
		3,018,255			2,784,779

Amounts owed to group undertakings are unsecured, interest free and not repayable until after 31 July 2016.

10	Provisions

		Warranty provision £			Total £
At 1 August 2015		1,115			1,115
Charged to the profit and loss account		839			839
At 31 July 2016		1,954			1,954

11	Share capital

Allotted, called up and fully paid shares

	2016						2015
		No.			£			No.			£
Ordinary shares of £1 each		1,000			1,000			1,000			1,000

12

Reserves

		Profit and loss account £			Total £
At 1 August 2015		(2,646,248)			(2,646,248)
Loss for the year		(237,950)			(237,950)
At 31 July 2016		(2,884,198)			(2,884,198)

Page 10

Power Ethernet Limited
Notes to the Financial Statements for the Year Ended 31 July 2016
......... continued

13	Commitments

Operating lease commitments

As at 31 July 2016 the company had annual commitments under non-cancellable operating leases as follows:

Operating leases which expire:

		2016 £			2015 £
Within one year		-			11,230

14	Related party transactions

Other related party transactions

During the year the company made the following related party transactions:

En-Twyn Limited ( Parent undertaking )   During the year, loans have been received from, or payments made on behalf of the company by En-Twyn Limited totalling £233,475 (2015 - £350,506) . At the balance sheet date the amount due to En-Twyn Limited was £2,961,354 ( 2015 - £2,727,879 ) .

15

Control

The company is controlled by its holding company, En-Twyn Limited.

Page 11