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| 2. |
ACCOUNTING POLICIES |
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The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company’s financial statements. |
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Statement of compliance |
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The financial statements of the company for the year ended 31 December 2016 have been prepared in accordance with the provisions of FRS 102 Section 1A (Small Entities) and the Companies Act 2006. These are the company's first set of financial statements prepared in accordance with FRS 102. |
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Basis of preparation |
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The financial statements have been prepared under the historical cost convention except for certain properties and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements. |
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Cash flow statement |
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The company has availed of the exemption in FRS 102 Section 1A from the requirement to prepare a Cash Flow Statement because it is classified as a small company. |
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Turnover |
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Turnover comprises the invoice value of goods supplied by the company, exclusive of trade discounts. |
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Tangible fixed assets and depreciation |
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Tangible fixed assets are stated at cost or at valuation, less accumulated depreciation. The charge to depreciation is calculated to write off the original cost or valuation of tangible fixed assets, less their estimated residual value, over their expected useful lives as follows: |
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Fixtures, fittings and equipment |
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10% Straight line |
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The carrying values of tangible fixed assets are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable. |
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Investment properties |
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Investment property whose fair value can be measured reliably without undue cost or effort is measured at fair value with changes in fair value recognised in the Profit and Loss Account. Revalued investment properties are not depreciated or amortised, unless the fair value cannot be measured reliably or without undue cost or effort.
Not depreciating or amortising property is a departure from the requirement of Company Law to provide depreciation on all fixed assets which have a limited useful life. However, these investment properties are not held for consumption but for investment and the director considers that systematic annual depreciation would be inappropriate. The accounting policy adopted is therefore necessary for the financial statements to give a true and fair view. If depreciation were to be provided it would be provided at a rate of per annum on the revalued amount. |
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Investments |
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Investments held as fixed assets are stated at cost less provision for any permanent diminution in value. Income from other investments together with any related tax credit is recognised in the profit and loss account in the year in which it is receivable. |
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Trade and other debtors |
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Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts. |
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Trade and other creditors |
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Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost. |
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Employee benefits |
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The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The company also operates a defined benefit pension scheme for its employees providing benefits based on final pensionable pay. The assets of this scheme are also held separately from those of the company, being invested with pension fund managers. |
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Taxation |
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Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Balance Sheet date. |
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Share capital of the company |
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Ordinary share capital |
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The ordinary share capital of the company is presented as equity. |
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Preference share capital |
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The dividend rights of the preference shares are non-cumulative and payment is at the discretion of the company. The preference shares carry voting rights at meetings. Based on their characteristics the preference shares are considered to be presented as equity and not liabilities. There is no option to redeem the preference shares. |
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Exceptional item |
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Exceptional items are those that the directors' view are required to be separately disclosed by virtue of their size or incidence to enable a full understanding of the company's financial performance. |
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| 5.1. |
Holdings of 20% or more |
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The company holds 20% or more of the share capital of the following company: |
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Country |
Nature |
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Details |
Proportion |
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of |
of |
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of |
held by |
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Name |
incorporation |
business |
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investment |
company |
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Participating interests and |
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joint ventures |
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Estate Acquisition & Development Ltd |
England |
Property dealing |
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Ordinary £1 |
21.94% |
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The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were as follows: |
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Year ended |
Capital and |
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Profit for |
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reserves |
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the year |
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£ |
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£ |
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Estate Acquisition & Development Ltd |
31 December 2016 |
530,162 |
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208,310 |
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Mr M Scott and his family own 77.84% of the shares in Estate Acquisition & Development Limited |
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In the opinion of the director, the value to the company of the unlisted investments is not less than the book amount shown above. |
