1Accounting Policies

Basis of measurement and preparation of accounts
Basis of accounting

The financial statements have been prepared under the historical cost convention, and in
accordance with applicable UK accounting standards.

Cash flow statement

The directors have taken advantage of the exemption in Financial Reporting Standard No 1
(Revised 1996) from including a cash flow statement in the financial statements on the grounds
that the company is small.

Turnover policy
The turnover shown in the profit and loss account represents amounts invoiced during the year,
exclusive of Value Added Tax.

Tangible assets depreciation policy
All fixed assets are initially recorded at cost.

Depreciation

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value,
over the useful economic life of that asset as follows:

Fixtures, Fittings & Equipment - 25% & 33.33% straight line

Other accounting policies
Operating lease agreements

Rentals applicable to operating leases where substantially all of the benefits and risks of
ownership remain with the lessor are charged against profits on a straight line basis over the
period of the lease.

Deferred taxation

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 have occurred at that date that
will result in an obligation to pay more, or a right to pay less or to receive more tax, with the
following exceptions:

Provision is made for tax on gains arising from the revaluation (and similar fair value
adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over
into replacement assets, only to the extent that, at the balance sheet date, there is a binding
agreement to dispose of the assets concerned. However, no provision is made where, on the
basis of all available evidence at the balance sheet date, it is more likely than not that the
taxable gain will be rolled over into replacement assets and charged to tax only where the
replacement assets are sold.

Deferred tax assets are recognised only to the extent that the directors consider that it is 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 at the tax rates that are expected to apply in
the periods in which timing differences reverse, based on tax rates and laws enacted or
substantively enacted at the balance sheet date.

Going concern

The accounts have been prepared on the going concern basis.

The directors believe this to be appropriate due to the assurances of continued support from the group.

Ultimate parent company

The ultimate parent company is ABC Managed Contracts Limited, a company incorporated in
England and Wales.

4Transactions with directors

By virtue of the outstanding loan account, a liability to taxation exists under Section 455 of CTA
2010 in the sum of £1,875. It is anticipated that the loans will be repaid within nine months of the
year end and, as such, no provision for the taxation has been made.