MODULAR_HEAT_EXCHANGERS_L - Accounts

At 31 December 2013 the company has net liabilities of £1,983,677 (2012 £953,517) having made a loss after tax of £1,030,260 (2012 £623,268) for the year then ended. The loss for the year ended 31 December 2013 is after charging the following exceptional items totalling £920,025:

" £481,500 in respect of the writing off of the inter-company loan balance due from its wholly owned subsidiary Clixcoolers Limited at 31 December 2013 on the basis that the loan is currently considered to be irrecoverable given the financial position of Clixcoolers Limited; and

" £438,525 in respect of a provision for the temporary diminution in value of the company's intangible asset.  The intangible fixed asset comprises patent rights originally purchased by the company for £500,010.  The likelihood of future significant royalties being derived from the company's patent rights is considered doubtful although efforts are being made to improve the position.  The directors consider it appropriate to take a prudent approach to this matter and the financial statements now include the patent rights at a carrying value of £1.  It is hoped that this significant reduction in value will be of a temporary nature with future years potentially showing a release of the provision and, therefore, a consequent increase in carrying value.

The company is wholly dependent for its continued existence on the support of its directors and shareholders who provide the company's working capital as the company does not have any bank loan or overdraft facility.  After due consideration the shareholders and directors who have provided loans to the company have stated that such loans are repayable subject to a rolling 6-month notice period.  At the date of approval of these financial statements no such notice of required repayment has been received from any loan provider.  However, it is not possible for the directors to state that they believe that the company will continue for the required 12-month period as would normally be required when assessing the company's ability to continue as a going concern due to the rolling 6-month notice period attaching to the loans.  

As such, the going concern basis of accounts preparation would not normally be appropriate.  However, the directors consider that any adjustments that would be required to these financial statements in the event that the going concern basis was inappropriate would be insignificant as such matters have already been dealt with in the financial statements as described above.  

The company's trading subsidiary has endured significant difficulties in 2014 but, at the date of approval of these financial statements the directors consider that the trading prospects for 2015 are improving.

As a result of this opinion the directors and shareholders continue to provide the necessary funds to enable the company to meet its working capital requirements as they fall due. At the date of the approval of these financial statements the directors and shareholders confirm that they have no intention to withdraw their financial support, although such support is only now provided on a rolling 6-month notice basis.

The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).

Patents are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over its estimated useful life. At 31 December 2013 the carrying value of the patent is fairly stated having considered the value of anticipated future cashlows to be derived from the patent.

Fixed asset investments are stated at cost less provision for diminution in value.

The financial statements present information about the company as an individual undertaking and not about its group. The company and its subsidiary undertaking comprise a small-sized group. The company has therefore taken advantage of the exemptions provided by section 399 of the Companies Act 2006  not to prepare group accounts.

The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were as follows: