40SOUTH_ENERGY_LIMITED - Accounts

The directors present their annual report and financial statements for the year ended 31 December 2016.

The principal activity of the company continued to be that of development of wave energy converters.development of wave energy converters.

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

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

1. Change of accounting policy These accounts have been prepared under Financial Reporting Standard 10 2 . This is a new standard that is mandatory for accounting periods commencing on or after 1 January 2016. For the financial year ended 31 December 2016 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies. Change of accounting policy

These accounts have been prepared under Financial Reporting Standard 102. This is a new standard that is mandatory for accounting periods commencing on or after 1 January 2016.

For the financial year ended 31 December 2016 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

T he directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements.he directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements.

T he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476 .he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

40South Energy Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1 Bedford Row, London, WC1R 4BZ.

The financial statements are prepared under the historical cost convention.

Monetary amounts in these financial statements are in euros, except where otherwise indicated.

During the year the company sold all its patents and other intellectual property that related to the development of wave energy converters to 40South Energy Italia Srl, an Italian company financed by Enel Green Power Spa, an Italian utility company and by the Invitalia Ventures, an Italian venture capital company. The price agreed with Invitalia Ventures was €8,000,000 was negotiated on a commercial. The directors feel that this price was favourable to the company as the patents have yet to prove their commercial value. Consideration for the sale was made by the cancellation of amounts owed by the company. During the year the company issued a credit note of €760,000 to 40South Energy Srl for services that 40South Energy Srl no longer required. The directors are confident that the Company continues to enjoy the support of its shareholders and investors and, therefore, have prepared the accounts on the basis that the company will continue to trade as a going concern for the foreseeable future.

Turnover represents amounts receivable for services net of VAT and trade discounts. Sales are recognised at the point at which the company has fulfilled its contractual obligations and the risks and rewards attaching to the product, such as obsolescence, have been transferred to the customer. services net of VAT and trade discounts. Sales are recognised at the point at which the company has fulfilled its contractual obligations and the risks and rewards attaching to the product, such as obsolescence, have been transferred to the customer.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments. 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.

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 measured at transaction price.

Financial liabilities are classified according to the substance of the contractual arrangements entered into.

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised at transaction price.

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

Deferred taxation has not been provided for due to the uncertainty over future taxable profits.has not been provided for due to the uncertainty over future taxable profits.

Transactions in currencies other than euros are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.euros are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.

Consolidation

In the opinion of the directors, the company and its subsidiary undertakings comprise a small group. The company has therefore taken advantage of the exemption provided by Section 398 of the Companies Act 2006 not to prepare group accounts.

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

Their aggregate remuneration comprised:

Details of the company's subsidiaries at 31 December 2016 are as follows: