1Accounting Policies

Basis of measurement and preparation of accounts
The accounts have been prepared under the historical cost convention and in accordance with applicable UK accounting standards.

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
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 and machinery - 20% reducing balance
Fixtures, fittings and equipment - 15% or 33% reducing balance
Motor vehicles - 25% reducing balance

Other accounting policies
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 on the grounds that the company is small.
Fixed Assets
All fixed assets are initially recorded at cost.
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowances for obsolete and slow moving items.
Operating Lease Arrangements
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 that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.
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.

The amounts due after more than one year reflect the company's loan to Fernbrook Farm Limited, of which G Garrett and N Garrett are also directors.

5Transactions with directors

The company is controlled by its directors, G Garrett and N Garrett, by virtue of their majority interests in the issued share capital of the company.
During the accounting period the company maintained loan accounts with both directors and at the year end the company owed N Garrett £20,883 (2013: £34,402) and G Garrett £19,852 (2013: £32,861).
The company occupies a property controlled by the directors. Rent is paid on a commercial basis. Rent payable in the year was £40,000 (2013:£40,000). No amounts were outstanding at the year end. During the year G Garrett and N Garrett each received dividends of £24,000 (2013: £24,000).
The company also received repayment during the year from a loan of £1,140 from N Garrett and G Garrett. At the year end £nil was owing to the company (2013: £1,140).
The company also has a long-term loan of £294,175 (2013: £287,000) to another company, Fernbrook Farm Limited, of which G Garrett and N Garrett are also directors. This loan has no fixed repayment terms, but includes interest at 2.5%. The balance is shown within other debtors.