Accounting Convention These financial statements have been prepared in accordance with FRS 102. The Financial Reporting Standard applicable in the UK and Republic of Ireland and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view. The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below. Foreign Currency Translation a. Functional and presentation currency Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the company operates, the functional currency. The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest GBP. b. Translation and balances Transactions in foreign currencies are translated into sterling at the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies if any are translated at the exchange rate prevailing at the reporting date. Foreign exchange gains and losses arising on settlement or translation of monetary items are recognised in profit or loss in the period in which they arise. Cash and Cash Equivalents Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. Debtors Debtors are recognised initially at transaction price and subsequently measured at amortised cost less any provision for impairment. Debtors comprise trade receivables, amounts due from employees, amounts due from related parties and other receivables. Debtors are stated net of any impairment losses where recovery of amounts outstanding is considered doubtful. Financial Instruments The Company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues of FRS 102 to all of its financial instruments. Financial instruments are recognised in the Company's balance sheet when the Company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. 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. Classification of financial liabilities Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. 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. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. Impairment of financial assets Financial assets measured at amortised cost are assessed at each reporting date for objective evidence of impairment. If there is objective evidence that an impairment loss has occurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Objective evidence of impairment includes significant financial difficulty of the debtor, breach of contract, default or delinquency in payments, or where it becomes probable that the debtor will enter bankruptcy or financial reorganisation. The carrying amount of the financial asset is reduced through the recognition of an impairment loss in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the asset's carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised. Taxation Current tax is recognised for the amount of corporation tax payable or recoverable in respect of the taxable profit or loss for the current or prior reporting periods. Current tax is measured using tax rates and laws that have been enacted or substantively enacted by the reporting date. The tax expense for the period comprises current tax and is recognised in profit or loss. Share Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any related tax effects. Employee benefits The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets. The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received. Termination benefits are recognised immediately as an expense when the Company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.