Abbreviated Company Accounts - RAPID ENGINEERING SUPPLIES LIMITED

1Accounting Policies

Basis of measurement and preparation of accounts
The accounts have been prepared under the historical cost convention, modified to include the revaluation of certain assets, 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 year, exclusive of Value Added Tax.

Tangible assets depreciation policy
Fixed assets

All fixed assets are initially recorded at cost.

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:

Plant & Machinery - 15% straight line
Fixtures & Fittings - 15% straight line
Motor Vehicles - 25% straight line
Equipment - 15%/33% straight line

Valuation information and policy
Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Other accounting policies
Hire purchase agreements

Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to the profit and loss account on a straight line basis.

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.

Pension costs

The company operates a defined pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.

Deferred tax

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 asset 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 director considers that it is more likely than not that there will be suitable taxable profits from which future reversals of the underlying timing differences can be deducted.

Deferred tax is measured on an undiscounted basis at the tax rates and laws enacted or substantively enacted at the balance sheet date.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating profit.

Related party transactions

The company was under the control of Mr N Simpkins throughout the current and previous year. Mr Simpkins is the managing director and majority shareholder.

Included in trade debtors are the following balances:

Rapid Engineering N E Limited - £25,884
Rapid Machining Banbury Limited - £421
Rapid Fabrications (South) Limited - £2,907

Included in debtors are the following inter company balances:

European Engineering Group Limited - £469,498
Rapid Engineering N E Limited - £139,074
Rapid Machining Banbury Limited - £10,149
Rapid Fabrication (South) Limited - £5,099

Included in trade creditors are the following balances:

Rapid Machining Banbury Limited - £23,194
Rapid Fabrications (South) Limited - £31,500

The following transactions took place during the year with related parties:

Rapid Machining Banbury Limited

Sales - £9,783
Purchases - £161,695

Rapid Fabrications (South) Limited

Sales - £119,718
Purchases - £280,970

Rapid Engineering N E Limited

Sales - £486,679