Work in progress is valued at the lower of cost and net
realisable value. Cost of work in progress includes overheads
appropriate to the stage of development. Net realisable value is
based upon estimated selling price less further costs expected to
be incurred to completion and disposal.
Revenue
Revenue represents amounts earned by the Group in respect of
services rendered during the period net of value added tax. Shares
in development profits and performance fees are recognised when the
amounts involved have been finally determined and agreed criteria
for recognition have been fulfilled. Fees in respect of project
management and interior and architectural design are recognised in
accordance with the stage of completion of the contract.
Current taxation
The tax expense for the year represents the total of current
taxation and deferred taxation. The charge in respect of current
taxation is based on the estimated taxable profit for the year.
Taxable profit for the year is based on the profits as shown in
profit or loss, as adjusted for items or expenditure, which are not
deductible for tax purposes.
The current tax liability for the year is calculated using tax
rates, which have either been enacted or substantively enacted at
the reporting date.
Deferred taxation
Deferred tax is provided in full on all temporary differences
arising between the tax base of assets and liabilities and their
carrying values in the financial statements. The deferred tax is
not accounted for if it arises from initial recognition of an asset
or liability in a transaction other than a business combination
that at the time of transaction affects neither accounting nor
taxable profit or loss.
Deferred tax is determined using tax rates which have been
enacted or substantively enacted at the reporting date and are
expected to apply when the related deferred tax asset is realised
or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary differences can be utilised. Deferred tax is
provided on temporary differences arising on investments in
subsidiaries and associates, except where the timing of the
reversal of the temporary difference is controlled by the Group and
it is probable that the temporary difference will not reverse in
the foreseeable future.
Leased assets
Assets held under finance leases and hire purchase contracts are
capitalised in the statement of financial position and depreciated
over their expected useful lives. The interest element of the
rental obligations is charged to profit or loss over the period of
the lease on a straight-line basis.
Rentals under operating leases are charged to profit or loss on
a straight-line basis over the lease term.
Investments
Investments in subsidiaries, associates and joint ventures, and
other investments are presented in the Group and Parent financial
statements at cost, less any necessary provision or impairment.
Associates
Associates are all entities over which the Group exercise
significant influence but does not exercise control. Investments in
associates are accounted for using the equity method of accounting
and are initially recognised at cost, which includes goodwill
identified on acquisition, net of any accumulated impairment loss.
The Group's share of its associate's profits or losses after
acquisition of its interest is recognised in profit or loss and
cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. Where the Group's share of
losses of an associate equals or exceeds the carrying amount of the
investment, the Group only recognises further losses where it has
incurred obligations or made payments on behalf of the
associate.
Financial assets
Available for sale financial assets consist of equity
investments in other companies where the Group does not exercise
either control or significant influence. The investments reflect
loans and capital contributions made in respect of projects
undertaken with other partners in which the Group will be entitled
to an eventual profit share.
Available for sale financial assets are shown at fair value at
each reporting date with changes in fair value being shown in Other
Comprehensive Income, or at cost less any necessary provision for
impairment where a reliable estimate of fair value is not able to
be determined.
Pensions
The Group operates a defined contribution pension scheme under
which fixed contributions are payable. Pension costs charged to the
income statement represent amounts payable to the scheme during the
year.
Foreign currency translation
Transactions in foreign currencies are translated into sterling
at the rate of exchange ruling at the date of the transaction.
Assets and liabilities are translated at the rate of exchange
ruling at the reporting date. Exchange differences are taken into
account in arriving at Group operating profit.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
charged to the share premium account.
Equity balances
-- Called up share capital represents the aggregate nominal value of ordinary shares in issue.
-- The share premium account represents the incremental paid up
capital above the nominal value of ordinary shares issued.
-- The merger reserve represents the excess over nominal value
of the fair value of consideration received for equity shares
issued directly to acquire another entity meeting the specific
requirements of section 612 of the Companies Act 2006.
Financial assets - loans and receivables
Trade receivables, loans and other receivables are classified as
'trade and other receivables' and are measured at cost less any
provisions. Interest income is recognised by applying the
appropriate interest rate of the contractual arrangement.
Financial liabilities - loans and payables and borrowings
Trade payables, other payables and borrowings are classified as
'trade and other payables' and 'borrowings, including lease
finance'. These are measured at amortised cost and the interest
expense is recognised by applying the appropriate interest rate of
the contractual arrangement.
Borrowings
Interest-bearing borrowings are recognised initially at fair
value, net of any transaction costs incurred. Borrowings are
subsequently stated at amortised cost using the effective interest
method with any differences between the proceeds (net of
transaction costs) and the redemption value being recognised over
the period of borrowings.
All borrowings are classified as current unless the Group has an
unconditional right to defer payment of the borrowings until at
least twelve months from the reporting date.
2. Capital and financial risk management
The Group manages its capital to ensure that the Group will be
able to continue as a going concern, while maximising the return to
shareholders through the optimisation of its debt and equity
balance.
The capital structure of the Group consists of cash and cash
equivalents and equity attributable to equity holders of the Parent
Company, comprising issued capital, share premium account, the
merger reserve created following the Cash Box Acquisition and
retained earnings.
The Group manages the capital structure and makes adjustments to
it in the light of changes in economic conditions. In order to
maintain or adjust the capital structure, the Group may adjust the
amount of dividends payable to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt or
increase capital.
The Board regularly reviews the capital structure, with an
objective to minimise net debt whilst investing in the development
opportunities.
The Group's activities expose it to a variety of financial risks
and those activities involve the analysis, evaluation, acceptance
and management of some degree of risk or combination of risks.
Taking risk is core to the property business and the operational
risks are an inevitable consequence of being in business. The
Group's aim is to achieve an appropriate balance between risk and
return and minimise potential adverse effects on the Group's
performance.
The Group's risk management policies are designed to identify
and analyse these risks, to set appropriate risk limits and
controls, and to monitor the risks by means of a reliable
up-to-date information system. The Group regularly reviews its risk
management policies and systems to reflect changes in markets,
products and emerging best practice.
Risk management is carried out by the Board of Directors.
Directors are responsible for the identification of the major
business risks faced by the Group and for determining the
appropriate course of action to manage those risks. The most
important types of risk are credit risk, liquidity and market risk.
Market risk includes currency, interest rate and other price
risks.
3. Segmental information
Segmental information is presented in respect of the Group's business
segments. The business segments are based on the Group's corporate
and internal reporting structure. Segment results and assets include
items directly attributable to a segment as well as those that
can be allocated to a segment on a reasonable basis. The segmental
analysis of the Group's business as reported internally to management
is as follows:
Revenue
2014 2013
Principal activities: GBP GBP
Development management 900,705 300,350
Interior design 1,991,837 3,172,369
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