The Company’s financial statements have been prepared
in accordance with applicable United Kingdom accounting standards and
under the historical cost convention. The accounting policies adopted
are consistent with the previous year and are set out below.
The Company has not presented its own profit and loss account, as permitted
by s230 of the Companies Act 1985. The loss after tax for the year was
£11,514,000 (2005 £6,662,000 profit).
The accounts were approved by the
Directors for issue on 30th March 2007. |
| b) |
Subsidiaries, associates and joint ventures |
| The Company’s investments in subsidiaries, associates
and joint ventures are accounted for in the financial statements at cost
less any provision for impairment. |
| Rental payments 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. |
Tangible fixed assets are held at cost less accumulated
depreciation and any provision for impairment. Depreciation is provided
so as to write off the cost less estimated residual value of such assets
over their expected useful lives.
The principal annual rates used for this purpose are as follows: |
| |
Fixtures and fittings – 10% to 33%
Motor vehicles –
20% |
Current tax, including UK corporation tax and foreign tax
where applicable, is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted or substantively enacted
by the balance sheet date.
Deferred taxation is provided in full on timing differences that result
in an obligation at the balance sheet date to pay more tax, or a right
to pay less tax, at a future date, at rates expected to apply when they
crystallise based on current tax rates and law. Timing differences arise
from the inclusion of items of income and expenditure in taxation computations
in periods different from those in which they are included in financial
statements. Deferred tax assets are recognised to the extent that it is
regarded as more likely than not that they will be recovered. Deferred
tax assets and liabilities are not discounted. |
| The Company operates a defined contribution scheme on behalf
of the Development Securities PLC group. The charge to the profit and
loss account in the period represents the actual amount payable to the
scheme in the year. Differences between contributions payable in the year
and contributions paid are shown as either accruals or prepayments in
the balance sheet. |
| Transactions denominated in foreign currencies are translated
into Sterling at the rates ruling at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies at the balance
sheet date are translated at the rates ruling at that date. Exchange movements
are dealt with in the profit and loss account. |
| The cost of granting share options and other share-based
remuneration to employees and Directors is recognised through the profit
and loss account. The Company has used a Black-Scholes pricing model and
the resulting fair value is amortised on a straight-line basis through
the profit and loss account over the vesting periods of the options. |
An investment in the loan notes of an associate, amounting
to £755,000, previously classified as part of an Investment in the
joint venture, was reclassified at 31st December 2005 to Financial assets,
as disclosed in note 12(c).
A provision previously classified as part of Other creditors is now classified
as a provision against Amounts owed by subsidiary companies. The financial
effect is a reduction in Other creditors of £15,953,000 and a reduction
in Amounts owed by subsidiary companies of the corresponding amount. |
