Abbreviated Company Accounts - P.A.G. CONSTRUCTION LIMITED

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 the Financial Reporting Standard for Smaller Entities (effective April 2008).
Going concern
The prevailing economic climate is challenging, particularly in the construction industry.
However, the company has remained profitable this year and the directors are confident that
this will continue. The company has been able to rely on the directors to fund working capital
as and when required.

Turnover policy
Turnover
The turnover shown in the profit and loss account represents amounts invoiced during the
year, exclusive of Value Added Tax.
In respect of long-term contracts and contracts for on-going services, turnover represents the
value of work done in the year, including estimates of amounts not invoiced. Turnover in
respect of long-term contracts and contracts for on-going services is recognised by reference
to the stage of completion.

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:
Freehold Property - 10% straight line
Plant & Machinery - 15% straight line
Motor Vehicles - 25% reducing balance
Equipment - 10% straight line

Other accounting policies
Stocks

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

Work in progress

Work in progress is valued on the basis of direct costs plus attributable overheads based on
normal level of activity. Provision is made for any foreseeable losses where appropriate. No
element of profit is included in the valuation of work in progress.

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.

Pension costs
The company operates a defined contribution 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 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.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the
contractual arrangement, as either financial assets, financial liabilities or equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of the
company after deducting all of its liabilities.

4Transactions with directors

No interest is charged on the directors loan account and there is no fixed date for repayment. This Directors Loan Account relates to Mr P A & Mrs E A Gilbert.