Abbreviated Company Accounts - FARMEC ENGINEERING SERVICES LIMITED

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
Turnover represents the total invoice value, excluding value added tax, of sales made during the year.

Tangible assets depreciation policy
Depreciation is provided at rates calculated to write off the cost less residual value of each asset over its expected useful life, as follows:

Plant and machinery - 15% straight line
Fixtures, fittings and equipment - 15% reducing balance
Motor vehicles - 25% reducing balance

Other accounting policies
Leasing and hire purchase commitments
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and depreciated over the shorter of the lease term and their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce constant periodic rates of charge on the net obligations outstanding in each period.

Rentals payable under operating leases are charged against income on a straight line basis over the lease term.

Stock
Stock is valued at the lower of cost and net realisable value.

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:

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
These accounts are prepared using the Going Concern basis. For more information see note 5.

Going concern
The financial statements have been prepared on the going concern basis which the directors believes to be appropriate for the following reasons :-

The company's net profit before tax was £21,720 for the year (30.06.14 : £23,856) and the company had net assets at 30 June 2015 of £50,855. (30.06.14 : £29,135) The director's have continued to reduce costs and improve the company's marketing function to increase profitability.

The company entered into a Company Voluntary Arrangement on 1 July 2014 following the meeting of creditors and members. The company has continued to make contributions in accordance with the CVA since the balance sheet date.

The directors believe that the company will make sufficient profits during the course of the CVA and have adequate resources available to finance its trading and other obligations.

On the basis the company continues to increase profitability and service costs required for the CVA, it is the directors opinion that the company is a going concern.