Abbreviated Company Accounts - ORWELL OFFSHORE LTD

1Accounting Policies

Basis of measurement and preparation of accounts
The full financial statements, from which these abbreviated accounts have been extracted, have been prepared under the historical cost convention as modified by the revaluation of investments and in accordance with the Financial Reporting Standard for Smaller Entities (effective January 2015).
The company is the parent undertaking of a small group and as such is not required by the Companies Act 2006 to prepare group accounts. These financial statements therefore present information about the company as an individual undertaking and not about its group.

Tangible assets depreciation policy
Tangible fixed assets are stated at cost or valuation less depreciation. Depreciation is provided at rates calculated to write off the cost or valuation of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
Motor Vehicles - 25% reducing balance
Fixtures & fittings - 20% straight line
Office equipment - 33% straight line

Intangible assets amortisation policy
Intangible fixed assets are stated at cost less amortisation. Amortisation is provided at rates calculated to write off the cost of the assets over their expected useful lives on the following bases:
Patents - 33% straight line

Other accounting policies
Going Concern
The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. As is typical within the industry in which the company operates, this is dependent on the successful completion of certain long term contracts in respect of which the directors are optimistic. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue and long term contracts
Revenue is recognised by the company in respect of services supplied during the year, exclusive of Value Added Tax and trade discounts.
Where applicable, profit on long term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording revenue and related costs on a percentage of completion basis as contract activity progresses. Revenue is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for the contract. Revenues derived from variations on contracts are recognised once the work has been completed. Full provision is made for losses on all contracts in the year in which they are first foreseen.

Investments
Investments are included in the balance sheet at a value determined by the directors to be reasonable based on the net assets of the investment company at that date, and are not depreciated. This is in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008). This treatment is contrary to the Companies Act 2006 which states that fixed assets should be depreciated but is, in the opinion of the directors, necessary in order to give a true and fair view of the financial position of the company.

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

Deferred taxation
Full provision is made for deferred tax assets and liabilities arising from all timing differences between the recognition of gains and losses in the financial statements and recognition in the tax computation.
Deferred tax is not provided on timing differences arising from the revaluation of fixed assets in the financial statements.
A net deferred tax asset is recognised only if it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse.
Deferred tax assets and liabilities are not discounted.

Foreign currencies
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction.
Exchange gains and losses are recognised in the profit and loss account.

Research and development
Research and development expenditure is written off in the year in which it is incurred.

Pensions
The company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the company to the fund in respect of the year.

4Fixed assets Investments
Unlisted investments £100,000 (2015: £100,000)

6Transactions with directors

Interest has been charged at 3%. The loan has been repaid post year end.