Abbreviated Company Accounts - KALDANI BUILDERS LTD

1Accounting Policies

Basis of measurement and preparation of accounts
The accounts have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities effective April 2008.

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

Tangible assets depreciation policy
Fixed assets
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:
Motor Vehicles - 25% Reducing balance

Other accounting policies
Financial instruments
Financial liabilities and equity instruments are classified according to the substance of the
contractual arrangements entered into. An equity instrument is any contract that evidences a
residual interest in the assets of the entity after deducting all of its financial liabilities.
Where the contractual obligations of financial instruments (including share capital) are
equivalent to a similar debt instrument, those financial instruments are classed as financial
liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and
gains or losses relating to financial liabilities are included in the profit and loss account. Finance
costs are calculated so as to produce a constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a
financial liability then this is classed as an equity instrument. Dividends and distributions
relating to equity instruments are debited direct to equity.
Compound instruments
Compound instruments comprise both a liability and an equity component. At date of issue, the
fair value of the liability component is estimated using the prevailing market interest rate for a
similar debt instrument. The liability component is accounted for as a financial liability.
The residual is the difference between the net proceeds of issue and the liability component (at
time of issue). The residual is the equity component, which is accounted for as an equity
instrument.
The interest expense on the liability component is calculated applying the effective interest rate
for the liability component of the instrument. The difference between this amount and any
repayments is added to the carrying amount of the liability in the balance sheet