2. Summary of Significant Accounting Policies

3 Months Ended

Jun. 30, 2012

2. Summary of Significant Accounting Policies:

2. Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statements Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for full year financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. These financial statements and notes included herein should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto that are included in the Company’s annual report on Form 10-K for the year ended December 31, 2011.

Net Income / (Loss) Per Common Share

Basic net income/ (loss) per share of common stock is calculated by dividing the net income/ (loss) by the weighted average number of shares of common stock outstanding during the period.

Foreign Currency Translation

The functional currency of the Company's operations in the UK is the British Pound Sterling. The financial statements of the Company were translated to US dollars using quarter-end exchange rates for the balance sheets and weighted average exchange rates for the statements of operations and statements of cash flows. Equity transactions were translated using historical rates. Foreign currency translation gains or losses as a result of fluctuations in the exchange rates are reflected in the statements of stockholders’ equity in total comprehensive income or loss.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Sales revenues are generally recognized when the products are shipped to the customers or services are rendered, net of discounts, returns and allowances. All revenues generated and the associated cost of sales incurred relate to the EMS service offering (manufacturing of OEM customer products) in 2012, with 99% of revenues coming from this source and the remaining percentage of revenue and cost of sales relating to the provision of a market return and repair service.

Trade Receivables

Trade receivables are stated at net realisable value. This value includes an appropriate estimated allowance for uncollectible accounts. The allowance is calculated based upon an evaluation of the level of past due accounts and the relationship with the financial status of our customers.

Inventory

Inventories are stated at the lower of cost or market value. Cost is determined using the first-in, first-out method. Inventory quantities on hand are regularly reviewed and where necessary, reserves for excess and unusable inventories recorded.

Inventory quantities on hand

	June 30, 2012	December 31, 2011
	US $'000	US $'000

Raw Materials	4,347	4,588
Work in Progress	2,837	2,228
Finished Goods	100	328

eriod=instant\|Label=Inventory Total\|Unit=USD\|Precision=^3»	7,284	7,144

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, net of accumulated depreciation. Depreciation is computed on a straight line basis over estimated useful lives of various asset classes as follows:

Building and building improvements 20 to 45 years

Machinery and equipment 5 to 10 years

Fixtures and fittings 3 to 8 years

Upon retirement or sales, the costs and related depreciation of the asset disposed of, are removed from the accounts and any resulting gain or loss is included in the determination of income. Repairs and maintenance costs are expensed as incurred. The Company reviews its property and equipment annually for impairment, and accordingly will write down those assets to their estimated fair value.

Income Taxes

Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognised for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognised for taxable temporary differences.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, which include cash, accounts receivable, accounts payable and accrued expenses are representative of their fair values due to the short-term maturity of these instruments.

Funding Arrangements

The Company has an invoice discounting facility provided by its bankers under which the bank advances up to 80% of the value of qualifying invoices on presentation. This is repaid when the customer settles the invoice with the remaining 20% released to the Company less bank charges at this time. The Company is responsible for collecting the debt. Security for the advances under this facility is provided by a charge over the accounts receivable of the Company. The amount held at this facility is shown in Proceeds from Line of Credit on the balance sheet. Axiom Manufacturing Services accounts for this as a transfer of receivables as a secured borrowing with pledge of collateral. Management believes that this treatment complies with guidance provided in FASB ASC 860-30-25-3.

The Company was in credit on this facility as at June 30, 2012 as compared to borrowings amounting to $1.4 million as at June 30, 2011. Borrowings are included within ‘Proceeds from Line of Credit’ under the liability section of the balance sheet.

Charges incurred amounted to $0.09 million to June 30, 2012 as compared to $0.08 million for the same period of the previous year. Interest amounted to $0.006 million; a decrease of 80%. The decrease is due to the facility being used less. Charges are included within ‘Operating Expenses’ in the statement of operations and comprehensive income and interest charged on this facility is included within interest expense under ‘Other Income and Expenses’.

Proceeds from Line of Credit

The components of this balance sheet account are shown below:

	June 30, 2012	December 31, 2012
	US $'000	US $'000

Current Account	2	251
Deposit Account	1,522	47
Invoice Finance	47	(1,315)
Unpresented Checks	(2,805)	(8)

Total	(1,234)	(1,025)

Recently Issued Accounting Pronouncements

We have reviewed recent accounting pronouncements and determined they will have no present or future impact on our business. Accounting standards updates have been issued through 2011-12.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

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+ Details

OXFORD TECHNOLOGIES INC 10-Q