Caridon Property Limited - Limited company accounts 23.1

REGISTERED NUMBER: 06883096 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTOR AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2022

FOR

CARIDON PROPERTY LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

5

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Notes to the Consolidated Financial Statements

15

DIRECTOR:

Mr M J Carrozzo

REGISTERED OFFICE:

1 Kings Avenue

Winchmore Hill

London

N21 3NA

REGISTERED NUMBER:

06883096 (England and Wales)

AUDITORS:

AGK Partners

Chartered Accountants & Statutory Auditors

1 Kings Avenue

London

N21 3NA

The director presents his strategic report of the company and the group for the year ended 31 October 2022.

REVIEW OF BUSINESS

The principal activities of the group are those of specialist rent guarantee, lettings and management services.

The group had another successful year with an increase in turnover of 5.64% due to the expansion of our property portfolio in the South east during the year. However the gross profit margin decreased from 17.04% to 13.75% in current year due to increase in overhead recharges.

The profit before tax for the year is £707,665 (2021: £861,859).

During the year to 31 October 2022, the world continued to be affected by the global COVID-19 pandemic which has affected the way we do business as it has with many others. We have been able to carry on with very little interruption due to our linked IT infrastructure, and as far as financial impact, we have actually seen an increase in demand for our social homes provision. We continue to monitor the situation and our offices are prepared for a full return of staff to the office with sufficient supplies of PPE, separation of desk-space, perspex screens for shielding and a staff rotation system in place for when the situation or restrictions ease.

We feel that due to good management and a disciplined finance function, we are in a better position than many to weather the storm. We will avoid the inevitable raft of job losses that many other companies will be forced to make as a result of their business income suffering. We continue to focus closely on costs across the business and have revised our forecasts and cash flows for the next year and continue to enjoy a strong and supportive relationship with our bankers.

Caridon Property has a ten-year history of continuous growth and investment, particularly in human capital. This has given the business the resilience that the board believes other competitors may lack. The board is quietly optimistic that opportunities will emerge in the forthcoming year, which Caridon Property will be well placed to seize.

PRINCIPAL RISKS AND UNCERTAINTIES

The market in which we operate remains highly competitive. We seek to sustain and improve our level of performance over the long term by actively managing risk across all areas of the business. This approach provides a stable environment for our people and ensures that customer can trade with us in the knowledge that risks are minimised. The main risks are competition risk, reputational risk, credit risk and finance risk.

Competition Risk

The company operates in a highly competitive market place and is reliant on its local authority partners for referrals which are occasionally subject to a competitive bid/tender process. Renewal of these contracts is uncertain and based on financial and performance criteria.

Credit risk

It is the risk that one party to a financial transaction will cause a financial loss for that other party by failing to discharge an obligation. Company policies are aimed at minimising such losses, and require that deferred terms are only granted to customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures.

The other commercial risks faced by the company are controlled by suitable internal control procedures and monthly monitoring of management accounts.

KEY PERFORMANCE INDICATORS

Directors consider the following as the key performance indicators:

Details

2022

2021

£

£

Turnover

21,950,443

20,777,844

Gross profit

3,018,566

3,540,850

Gross margin

13.75%

17.04%

Profit before tax

707,665

861,859

Net Assets

1,890,483

1,461,736

Quick Assets

1.37

1.36

EBITDA Margin

3.64%

4.72%

FINANCIAL POSITION

The group and the company are in good health and remains strongly cash generative allowing the expansion of the business from its own resources.

ON BEHALF OF THE BOARD:

Mr M J Carrozzo - Director

30 October 2023

The director presents his report with the financial statements of the company and the group for the year ended 31 October 2022.

DIVIDENDS

An interim dividend of £136 per share on the Ordinary B £0.1 shares was paid on 31 October 2022. The director recommends that no final dividend be paid on these shares.

No interim dividend was paid on the Ordinary D £0.01 shares. The director recommends that no final dividend be paid on these shares.

No interim dividend was paid on the Ordinary £0.01 shares. The director recommends that no final dividend be paid on these shares.

The total distribution of dividends for the year ended 31 October 2022 will be £ 135,996 .

DIRECTOR

Mr M J Carrozzo held office during the whole of the period from 1 November 2021 to the date of this report.

DIRECTOR'S RESPONSIBILITIES STATEMENT

The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, AGK Partners, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr M J Carrozzo - Director

30 October 2023

Opinion

We have audited the financial statements of Caridon Property Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 October 2022 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 October 2022 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Director.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Director's Responsibilities Statement set out on page four, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the director is responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the group or the parent company or to cease operations, or has no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We identify and assess the risks of material misstatement of the financial statements due to fraud and obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses. Based on the presumption that there are risks of fraud resulting from management override, revenue recognition and accounting estimates and judgements, we carry out the following procedures amongst others, we perform detailed reviews of adjusting journal entries and investigating any that appear unusual as to nature or amount. We investigate the possibility of related parties and the sources of financial resources supporting the transactions

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognize non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry;

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

- reading the minutes of meetings of those charged with governance;

- enquiring of management as to actual and potential litigation and claims; and

- reviewing correspondence with HMRC, relevant regulators, and the company's legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Alekos Christofi (FCCA) (Senior Statutory Auditor)

for and on behalf of AGK Partners

Chartered Accountants & Statutory Auditors

1 Kings Avenue

London

N21 3NA

30 October 2023

REVENUE

21,950,443

20,777,844

Cost of sales

18,931,877

17,236,994

GROSS PROFIT

3,018,566

3,540,850

Administrative expenses

2,494,794

2,708,856

523,772

831,994

Other operating income

195,743

38,769

OPERATING PROFIT

5

719,515

870,763

Interest receivable and similar income

107

39

719,622

870,802

Amounts written off investments

6

-

80

719,622

870,722

Interest payable and similar expenses

7

11,957

8,866

PROFIT BEFORE TAXATION

707,665

861,856

Tax on profit

8

142,922

164,978

PROFIT FOR THE FINANCIAL YEAR

564,743

696,878

Profit attributable to:

Owners of the parent

564,743

696,878

PROFIT FOR THE YEAR

564,743

696,878

OTHER COMPREHENSIVE INCOME

Share buy back

-

(18,136

)

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

(18,136

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

564,743

678,742

Total comprehensive income attributable to:

Owners of the parent

564,743

678,742

FIXED ASSETS

Intangible assets

11

-

268

Property, plant and equipment

12

657,065

276,733

Investments

13

Interest in associate

185

-

657,250

277,001

CURRENT ASSETS

Debtors

14

3,748,594

2,980,958

Cash at bank and in hand

1,448,147

1,935,576

5,196,741

4,916,534

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

15

3,775,972

3,604,727

NET CURRENT ASSETS

1,420,769

1,311,807

TOTAL ASSETS LESS CURRENT LIABILITIES

2,078,019

1,588,808

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

16

(80,649

)

(93,659

)

PROVISIONS FOR LIABILITIES

19

(106,887

)

(33,416

)

NET ASSETS

1,890,483

1,461,733

CAPITAL AND RESERVES

Called up share capital

20

200

200

Capital redemption reserve

21

5

5

Retained earnings

21

1,890,278

1,461,528

SHAREHOLDERS' FUNDS

1,890,483

1,461,733

The financial statements were approved by the director and authorised for issue on 30 October 2023 and were signed by:

Mr M J Carrozzo - Director

FIXED ASSETS

Intangible assets

11

-

268

Property, plant and equipment

12

381,247

53,958

Investments

13

285

100

381,532

54,326

CURRENT ASSETS

Debtors

14

3,342,538

2,701,236

Cash at bank and in hand

1,370,431

1,550,241

4,712,969

4,251,477

CREDITORS

Amounts falling due within one year

15

3,587,375

3,383,756

NET CURRENT ASSETS

1,125,594

867,721

TOTAL ASSETS LESS CURRENT LIABILITIES

1,507,126

922,047

CREDITORS

Amounts falling due after more than one year

16

(41,450

)

(53,522

)

PROVISIONS FOR LIABILITIES

19

(69,700

)

(6,200

)

NET ASSETS

1,395,976

862,325

CAPITAL AND RESERVES

Called up share capital

20

200

200

Capital redemption reserve

21

5

5

Retained earnings

21

1,395,771

862,120

SHAREHOLDERS' FUNDS

1,395,976

862,325

Company's profit for the financial year

669,647

439,126

The financial statements were approved by the director and authorised for issue on 30 October 2023 and were signed by:

Mr M J Carrozzo - Director

Called up

Capital

share

Retained

redemption

capital

earnings

reserve

£

£

£

Balance at 1 November 2020

205

923,647

-

Changes in equity

Issue of share capital

(5

)

-

-

Dividends

-

(140,856

)

-

Total comprehensive income

-

678,737

5

Balance at 31 October 2021

200

1,461,528

5

Changes in equity

Dividends

-

(135,996

)

-

Total comprehensive income

-

564,743

-

Balance at 31 October 2022

200

1,890,275

5

Non-controlling

Total

Total

interests

equity

£

£

£

Balance at 1 November 2020

923,852

-

923,852

Changes in equity

Issue of share capital

(5

)

-

(5

)

Dividends

(140,856

)

-

(140,856

)

Total comprehensive income

678,742

-

678,742

Balance at 31 October 2021

1,461,733

-

1,461,733

Changes in equity

Dividends

(135,996

)

-

(135,996

)

Total comprehensive income

564,743

-

564,743

Balance at 31 October 2022

1,890,480

-

1,890,480

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 November 2020

205

581,991

-

582,196

Changes in equity

Issue of share capital

(5

)

-

-

(5

)

Dividends

-

(140,856

)

-

(140,856

)

Total comprehensive income

-

420,985

5

420,990

Balance at 31 October 2021

200

862,120

5

862,325

Changes in equity

Dividends

-

(135,996

)

-

(135,996

)

Total comprehensive income

-

669,647

-

669,647

Balance at 31 October 2022

200

1,395,771

5

1,395,976

1.	STATUTORY INFORMATION

Caridon Property Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared on a going concern basis as the directors are satisfied that the company will have adequate resources to meet its liability to third parties as they fall due.

The company's principal activity during the year was that of guaranteed rent specialists.

The group has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 3.17(d).

Basis of consolidation

The group financial statements consolidate the financial statements of Carion Property Limited and all its subsidiary undertakings drawn up to 31 October each year. No profit and loss account is presented for as Caridon Property Limited as permitted by section 408 of the Companies Act 2006.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities.All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Investment in Subsidiaries

In the parent company financial statements investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Goodwill

Goodwill arising on acquisition of a trade or on each business combination is capitalised, classified as an asset on the statement of financial position and amortised on a straight line basis over its useful life of 10 years. No amortisation is provided in the year of purchase.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Significant judgements and estimates

In the application of the company's accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period. or in the period of the revision and future periods where the revision affects both current and future periods.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the assets or liabilities affected in future periods.

The Group's management believes that judgements, estimates and assumptions used in the preparation of the financial statements are appropriate given the factual circumstances as at 31 October 2022.

Various elements of the Group's accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other assessments. In particular, the Group has identified the following accounting policies which, due to the judgements, estimates and assumptions inherent in those policies, and the sensitivity of the financial statements to those judgements, estimates and assumptions, are critical to an understanding of the financial statements.

Valuation of debtors

Valuation of debtors is based upon ongoing assessments of the probable estimated losses inherent in the trade and other debtors portfolio. Assessments are conducted by the board employing a methodology and guidelines, which are continually monitored and improved. The primary component of this methodology comprises specific allowances and collective allowances.

A debtor is subject to impairment test when valid indications exist, at the assessment date, which demonstrate that the customer will not be able to meet his obligations and/or when the flow of receipts decelerates over time. Usually such indications include failure of communication with the customers and indications of significant financial difficulty.

Amounts individually provided for concern claims evaluated individually for impairment based upon management's best estimate of the present value of the cash flows which are expected to be received.

In assessing the need for collective allowance, management considers debtors in arrears over 121 days but excludes those for which there are valid indications that they will be collected.

The accuracy of provisions depends on the accuracy of future cash flows for specific allowances and the model assumptions and parameters used in determining collective allowances. While this necessarily involves judgement, management believes that their provisions are reasonable and supportable.

Assets impairment

The Group reviews on an annual basis the carrying amounts of investments, tangible assets and intangible assets, in order to determine if there is an indication of impairment. If any such indication exists an impairment review is carried out in order to determine the extent of the impairment loss.

Useful lives of depreciable tangible and intangible assets

The management assesses the estimated useful lives and related depreciation & amortisation charges for purchased and internally generated intangible assets and tangible assets and reviews the assessment at regular intervals. Management estimates are based on the projected operating life cycle of these assets. Such estimates are not expected to change significantly, however, management may modify depreciation and amortisation rates wherever useful lives turn out to be different than previously estimated and writes down or writes off assets.

Turnover

Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Revenue represents gross rental income.

Revenue is recognised evenly over the period of the rental agreements.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs are being amortised evenly over their estimated useful life of five years.

Website development is being written off in equal annual instalments over its estimated economic life of five years. It is the company's policy not to amortise in the year of purchase.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Short leasehold

-

Over the life of the lease

Plant and machinery

-

20% on cost

Motor vehicles

-

20% on cost

The company has adopted a policy not to depreciate the asset in the year of acquisition, however full depreciation will be provided in the year of disposal.

Investments in associates

Investments in associate undertakings are recognised at cost.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Dividends

Final dividends distributions to the company's shareholders are recognised as a liability in the financial statements in the period in which the dividends are approved by the company's shareholders, while interim dividend distributions are recognised in the period in which the dividends are declared and paid.

Financial instruments

Basic financial instruments are recognised at amortised cost, except for investments in non-convertible preference and non-puttable ordinary shares which are measured at fair value, with changes recognised in profit or loss.

Derivative financial instruments are initially recorded at cost and thereafter at fair value with changes recognised in profit and loss.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.