General information and basis of preparationOakleaf Contracts (Europe) Ltd is a company incorporated in Northern Ireland under the United Kingdom Companies Act. The company’s principal activities are that of dry-lining, metal stud partitions, suspended ceilings, plastering and related commercial fit-out subcontract activities.The financial statements have been prepared in accordance with applicable accounting standards. A summary of the more important policies, which have been applied consistently, is set out below. The financial statements are prepared in sterling which is the functional currency of the company. The financial statements are rounded to the nearest £1. All members have consented to the abridgement of these financial statements.Stocks Stocks are stated at the lower of cost and net realisable value. Cost comprises materials, direct wages and other direct costs together with a portion of overheads. Net realisable value is the price at which the stock can be realised in the normal course of business. Work in progress on long term contracts Work in progress is stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each contract to its present stage, plus an element of profit attributable to the current stage of completion. Net realisable value is based on estimated contract price less any further costs expected to be incurred to completion. Where necessary, full provision is made for expected losses on long term contracts.Short-term debtors and creditorsDebtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other operating expenses.Leases Where assets have been acquired under finance leases, the obligations to the lessor are shown as part of borrowings and the rights in the corresponding assets are treated in the same way as owned fixed assets. Leases are regarded as finance leases where their terms transfer to the lessee substantially all the benefits and burdens of ownership other than the right to legal title. Assets acquired under hire purchase contracts are capitalised based on the purchase price of the assets. Depreciation is provided on the same basis as for owned assets. The interest element of the hire purchase payment is charged to the profit and loss account over the period of the contract.The capital value of hire purchase assets are included in the balance sheet as a liability, reduced by the capital element of the hire purchase payments.Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.TaxationThe charge for taxation is based on the profit for the year as adjusted for disallowable items and for timing differences to the extent that they are unlikely to result in an actual tax liability in the foreseeable future. Timing differences arise from the recognition for tax purposes of certain items of income and expenses in a different accounting period from that in which they are recognised in the accounts. The tax effect of timing differences, as reduced by the tax benefit of any accumulated losses, is treated as a deferred tax liability.Foreign currenciesTransactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date while incomes and expenditures are retranslated at an average rate for the period. Exchange differences are taken into account in arriving at the operating profit.Short term employee benefitsShort term employee benefits are recognised as an expense in the period in which they are incurred.