Company Registration No. 07486862 (England and Wales)
ORIGIN BROADBAND LIMITED
UNAUDITED ABBREVIATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2015
ORIGIN BROADBAND LIMITED
CONTENTS
Page
Accountants' report
1
Abbreviated balance sheet
2 - 3
Notes to the abbreviated accounts
4 - 7
ORIGIN BROADBAND LIMITED
CHARTERED ACCOUNTANTS' REPORT TO THE BOARD OF DIRECTORS ON THE PREPARATION OF THE UNAUDITED STATUTORY FINANCIAL STATEMENTS OF ORIGIN BROADBAND LIMITED FOR THE YEAR ENDED 30 NOVEMBER 2015
1
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Origin Broadband Limited for the year ended 30 November 2015 from the company’s accounting records and from information and explanations you have given us.
As a practising member firm of the Institute of Chartered Accountants in England and Wales, we are subject to its ethical and other professional requirements which are detailed at http://www.icaew.com/en/members/regulations-standards-and-guidance/.
This report is made solely to the Board of Directors of Origin Broadband Limited, as a body, in accordance with the terms of our engagement letter dated 9 November 2015. Our work has been undertaken solely to prepare for your approval the financial statements of Origin Broadband Limited and state those matters that we have agreed to state to the Board of Directors of Origin Broadband Limited, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Origin Broadband Limited and its Board of Directors as a body, for our work or for this report.
It is your duty to ensure that Origin Broadband Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and loss of Origin Broadband Limited. You consider that Origin Broadband Limited is exempt from the statutory audit requirement for the year.
We have not been instructed to carry out an audit or a review of the financial statements of Origin Broadband Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.
Knowles Warwick Limited
27 September 2016
Chartered Accountants
183 Fraser Road
Sheffield
S8 0JP
ORIGIN BROADBAND LIMITED
ABBREVIATED BALANCE SHEET
AS AT
30 NOVEMBER 2015
30 November 2015
2
2015
2014
Notes
£
£
£
£
Fixed assets
Intangible assets
2
3,333
3,750
Tangible assets
2
1,442,944
1,450,063
1,446,277
1,453,813
Current assets
Stocks
39,744
9,590
Debtors
982,152
255,082
Cash at bank and in hand
173,849
6,592
1,195,745
271,264
Creditors: amounts falling due within one year
3
(2,099,044)
(520,942)
Net current liabilities
(903,299)
(249,678)
Total assets less current liabilities
542,978
1,204,135
Creditors: amounts falling due after more than one year
4
(493,794)
(107,728)
49,184
1,096,407
Capital and reserves
Called up share capital
5
201
200
Share premium account
39,956
39,956
Revaluation reserve
1,026,100
1,080,105
Profit and loss account
(1,017,073)
(23,854)
Shareholders' funds
49,184
1,096,407
ORIGIN BROADBAND LIMITED
ABBREVIATED BALANCE SHEET (CONTINUED)
AS AT
30 NOVEMBER 2015
30 November 2015
3
For the financial year ended 30 November 2015 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
Directors' responsibilities:
-
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476;
-
The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements.
These abbreviated financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime.
Approved by the Board for issue on 27 September 2016
Mr O J Bryssau
Director
Company Registration No. 07486862
ORIGIN BROADBAND LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS
FOR THE YEAR ENDED 30 NOVEMBER 2015
4
1
Accounting policies
1.1
Accounting convention
The financial statements are prepared under the historical cost convention modified to include the revaluation of freehold land and buildings and in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008).
1.2
Compliance with accounting standards
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).
1.3
Turnover
Turnover represents amounts in respect of goods and services supplied in the year net of VAT and trade discounts and is measured at the fair value of the consideration received and receivable. Revenue from rentals and installations are recognised evenly over the contract period.
1.4
Goodwill
The goodwill acquired in the year ended 30 November 2014 relates to the purchase of a customer base from a competitor. Acquired goodwill is written off in equal annual installments over its estimated useful economic life , which is expected to be 10 years.
Acquired goodwill is written off in equal annual installments over its estimated useful economic life
, which is expected to be 10 years.
1.5
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost or valuation less depreciation. Depreciation is provided at rates calculated to write off the cost or valuation less estimated residual value of each asset over its expected useful life, as follows:
Land and buildings Leasehold
10% reducing balance basis
Exchange Equipment
5% straight line basis
Fixtures, fittings & equipment
10% reducing balance basis
1.6
Leasing
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.7
Stock
Stock is valued at the lower of cost and net realisable value.
1.8
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 computations. A net deferred tax asset is only recognised 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.
ORIGIN BROADBAND LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2015
1
Accounting policies
(Continued)
5
1.9
Deferred income and initial customer costs
Deferred income represents the part of the amount invoiced to customers that has not yet met the criteria for income recognition and this is still to be earned as income, by means of service delivery in the future.
The initial costs associated with the commencement of new customer connections are incurred on inception and are deferred over the contract term of the customer, typically 12 to 36
months. These costs are expensed to the profit & loss account as the contact term progresses, they are not capitalised as fixed assets.
1.10
The company has generated a loss for the year ended 30 November 2015 of £1,047,224 (2014: profit £40,031) and its net assets have depleted from £1,096,407 to £49,184.
Significant investment was incurred during the year in staff, IT infrastructure, establishment costs and back office activities designed to position the company for planned volume growth in the residential, business and leased line IT, telephony and broadband marketplace. Performance trends in 2016 confirm this to have been a important step on the road to profitable growth.
Nevertheless, the company remains under capitalised and the directors are in regular dialogue with key trade suppliers who have thus far advanced sufficient trade credit to enable the business to continue to operate. Further, on 2 March 2016, the company secured an additional interim investment of £550,000 from Finance Yorkshire Equity LP who remain an important and supportive investor.
Being mindful of the need to raise further capital the directors have been in discussions with a number of potential institutional investors. This has culminated in the offer, in principle and subject to legal, commercial and financial due diligence, by a London based EIS investment fund to provide £3m in new equity. A formal Offer Letter was received and signed on 20 September 2016 and the legal work has commenced. We are targeting a completion date of mid November.
The directors have prepared financial and cash flow forecasts for a period of at least 12 months following the approval of these financial statements and considered key sensitivities, particularly around sales growth. On the basis of these forecasts and taking account of the planned £3m funding round expected to complete in the next few weeks, the directors have a reasonable expectation that the company will have adequate resources to continue in operational existence for the foreseeable future.
As a result of the above, these financial statements have been drawn up on a going concern basis.
ORIGIN BROADBAND LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2015
6
2
Fixed assets
Intangible assets
Tangible assets
Total
£
£
£
Cost or valuation
At 1 December 2014
4,167
1,472,734
1,476,901
Additions
-
76,206
76,206
At 30 November 2015
4,167
1,548,940
1,553,107
Depreciation
At 1 December 2014
417
22,671
23,088
Charge for the year
417
83,325
83,742
At 30 November 2015
834
105,996
106,830
Net book value
At 30 November 2015
3,333
1,442,944
1,446,277
At 30 November 2014
3,750
1,450,063
1,453,813
3
Creditors: amounts falling due within one year
The aggregate amount of creditors for which security has been given amounted to £472,573 (2014 - £20,240).
4
Creditors: amounts falling due after more than one year
The aggregate amount of creditors for which security has been given amounted to £493,794 (2014 - £105,867).
5
Share capital
2015
2014
£
£
Allotted, called up and fully paid
200 Ordinary shares of £1 each
200
200
1 Preference of £1 each
1
-
201
200
During the year
1
preference
share of £
1
was
allotted and fully paid at par
.
6
Ultimate parent company
The company is controlled by the directors who own 78% of the called up share capital.
ORIGIN BROADBAND LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2015
7
7
Related party relationships and transactions
Transactions in relation to loans with directors during the year are outlined in the table below:
Description
% Rate
Opening Balance
Amounts Advanced
Interest Charged
Amounts Repaid
Closing Balance
£
£
£
£
£
Mr H T L Wust - Directors loan
4.00
-
51,893
1,038
-
52,931
Mr O J Bryssau - Directors loan
4.00
(35,564)
86,413
306
-
51,155
(35,564)
138,306
1,344
-
104,086