1Accounting Policies

Basis of measurement and preparation of accounts
The financial statements have been prepared in accordance with the small companies regime of the Companies Act 2006 relating to small companies and with the Financial Reporting Standard for Smaller Entities (effective April 2008).

Turnover policy
The company recognises turnover when the amount of turnover can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met. The amount of turnover is not considered to be reliably measurable until all contingencies relating to the sale have been resolved.

Turnover represents the value of work carried out during the accounting period, excluding value added tax.

Tangible assets depreciation policy
Tangible fixed assets are stated at original cost less accumulated depreciation and any provision for impairment in value.
Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use
Depreciation is calculated so as to write-down the cost of property, plant and equipment to its residual value evenly over its estimated useful life. Estimated useful lives, residual values and depreciation methods are reviewed periodically, taking into account commercial and technological obsolescence as well as normal wear and tear, provision being made where the carrying value exceeds the recoverable amount.
The depreciation charge is based on the following estimates of useful lives:
Years
Fixtures, fittings, tools and equipment 3-5

Other accounting policies
Going Concern

The Company trades exclusively with the parent entity, Advanced Power AG, and other subsidiaries within the group. The Group’s ability to pay amounts due back to the company is dependent on one of its subsidiary entities (the ‘Fellow Subsidiary’) generating cash inflows from the sale, during 2013, of its share of a power project in North America.

Whilst the sale of the North American operation has not yet been finalised, the directors understand that negotiations are progressing positively and that the Fellow Subsidiary remains confident that the transaction can be completed on time and will generate sufficient cash inflow to enable Advanced Power AG to provide sufficient financial support to the Company to enable it to meet its financial obligations for a period of at least 12 months from the date of approval of these financial statements.

Advanced Power AG has confirmed that it intends to and, subject to the Fellow Subsidiary’s sale of its share in the power project, is able to continue to pay amounts due back to the company to meet its liabilities as they fall due and to carry on business for a period of at least 12 months from the date of approval of these accounts. Should the sale be delayed or not happen the company may not be able to realise its assets and discharge its liabilities in the normal course of business.

These conditions indicate the existence of a material uncertainty which may cast significant doubt on ability of Advanced Power AG’s to provide financial support to the company. The financial statements do not include any adjustments that would result from a failure of Advanced Power AG to provide the necessary financial support.


Tax

The tax expense represents the sum of the expected tax payable on taxable income for the year, including adjustments in respect of prior periods and deferred tax. Taxable profit differs from accounting profit, as reported in the income statement, 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. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated, but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future, have occurred at the balance sheet date. Timing differences are differences between the Company’s taxable profit and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, 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 is measured on an undiscounted basis and at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse based on the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Foreign currencies

(a) Functional and presentation currency

Items included in the financial statement of the company are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The company’s financial statements are presented in the ‘currency’ (‘€’), which is the company’s functional and presentation currency.

(b) Transactions and balances

Transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.


Leasing

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

Pensions

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 pension cost charge disclosed in note 2 represents contributions payable by the company to the fund and amounted to €86,768 (2011: €142,125). All contributions were paid at the year-end.