Basis of preparing the financial statementsThe financial statements have been prepared under the historical cost convention. As the company has orders for work for the forseeable future, the director believes that the company is well placed to manage its business risks successfully. The director has a reasonable expectation that the company has adequate resources to continue in operational existence for the forseeable future and, therefore, continues to adopt the going concern basis of accounting when preparing the annual financial statements.TaxationTaxation represents the sum of tax currently payable and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised in other comprehensive income or directly in equity. The company's liability for current tax is calculated using rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is recognised on all timing differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit. Deferred tax liabilities at the tax rates that are expected to apply in the period in which the liability is settled, based upon tax rates that have been enacted or substantively enacted by the end of the reporting period.Hire purchase and leasing commitmentsTangible assets aquired under hire purchase contracts or finance leases are capitalised and depreciated in the same manner as other tangible fixed assets. The related obligations, net of future finance charges, are included in creditors. Rentals payable under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease.Employee BenefitsShort term benefits, including holiday pay, are recognised as an expense in the profit and loss account in the period in which they are incurred.