REGISTERED NUMBER: 13340577 (England and Wales)

52 Avenue Road Limited

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 December 2025

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Statement of Profit or Loss

9

Consolidated Statement of Profit or Loss and Other Comprehensive Income

10

Consolidated Statement of Financial Position

11

Company Statement of Financial Position

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Statement of Cash Flows

15

Notes to the Consolidated Statement of Cash Flows

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

SJ Allsop

A Aslam

REGISTERED OFFICE:

Bridge House

Market Street

Glossop

SK13 8AR

REGISTERED NUMBER:

13340577 (England and Wales)

AUDITORS:

McMillan & Co LLP

Chartered Accountants and

Statutory Auditor

28 Eaton Avenue

Matrix Office Park

Buckshaw Village

Chorley

Lancashire

PR7 7NA

The directors present their strategic report of the company and the group for the year ended 31 December 2025.

REVIEW OF BUSINESS

The Group is progressing the development of 12 best-in-class ultra-prime residences in a highly desirable Prime Central London location. The scheme is designed to set a new benchmark for luxury living, combining exceptional architecture, expansive internal space, and a fully serviced lifestyle offering.

Each residence extends to approximately 535m² (5,750 sq ft) and is configured to provide privacy, security, and seamless modern living, targeting ultra-high-net-worth domestic and international purchasers.

Financial Performance

The Group has continued to invest in the development while maintaining stable financial performance.

Key financial highlights:

2025

2024

£m

£m

Income recognised

14.5

10.7

Profit for the year

2.9

3.1

Inventories

54.9

42.9

Funding provided by the Group in the year

8.9

4.4

External funding

4.5

-

The increase in income reflects ongoing project progression and revenue recognition aligned with development milestones. Inventory growth is consistent with continued capital deployment into the scheme.

The marginal reduction in profit year-on-year reflects the timing of cost recognition and continued investment in design, procurement, and construction activities.

PRINCIPAL RISKS AND UNCERTAINTIES

The Group has exposure to the following risks from its use of financial instruments:

Credit risk

Liquidity risk

Market risk

The Board of directors has overall responsibility for the establishment and oversight of the risk management framework and is responsible for developing and monitors the Groups risk management policies.

Credit risk

Credit risk is the risk of financial loss to the Group, if a customer or counterparty to a financial instrument individual characteristics of the customers; however, the Group is collecting the advances from the customers on periodical basis and the handover of properties to the customers will take place only after final settlement of all dues by them.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk mainly relates to trade and other payables, shareholder loan, loan from non-controlling interest shareholders, bank loans, loan from a related party, retention payables, lease liabilities and amount due to related parties.

The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the groups reputation.

Market risk

Market risk is the risk that changes in market prices, including property values, foreign exchange rates and interest rates will affect the Group's income. The objectives of the the market risk management is to manage and control the market risk exposures within acceptable parameters, while optimizing the return on risk.

ON BEHALF OF THE BOARD:

A Aslam - Director

30 June 2026

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2025.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2025.

FUTURE DEVELOPMENTS

The Development will continue through to quarter 1 2027, when it is expected to be completed.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2025 to the date of this report.

SJ Allsop

A Aslam

FINANCIAL INSTRUMENTS

The Group has been predominately funded by loans from its parent company, Select Developments Limiter. Financial instruments are measured at amortised cost.

ENGAGEMENT WITH EMPLOYEES

The company does not have any direct employees, with the management being undertaken by the head office team of the parent company, and the developments being subcontracted.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with UK-adopted international accounting standards. Under company law the directors must not approve the financial statements unless they are 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 directors are 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 directors are 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 them to ensure that the financial statements comply with the Companies Act 2006. They are 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 directors are 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 each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, McMillan & Co LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

A Aslam - Director

30 June 2026

Opinion

We have audited the financial statements of 52 Avenue Road Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the Consolidated Statement of Profit or Loss, the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 International Financial Reporting Standards (IFRSs) as adopted by the UK.

In our opinion:

-	the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2025 and of the group's profit for the year then ended;

-	the group financial statements have been properly prepared in accordance with IFRSs as adopted by the UK;

-	the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the UK and as applied in accordance with the provisions of the Companies Act 2006; and

-	the financial statements 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 directors' 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 directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, 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 Directors 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 Directors 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 Directors.

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 directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are 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 directors determine 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 directors are 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 directors either intend to liquidate the group or the parent company or to cease operations, or have 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.

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 recognise 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 sector;

-

we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;

-

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, andtested journal entries to identify unusual transactions.

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.

Andrea Gerring FCA (Senior Statutory Auditor)

for and on behalf of McMillan & Co LLP

Chartered Accountants and

Statutory Auditor

13 July 2026

CONTINUING OPERATIONS

Revenue

3

14,530,299

10,702,536

Cost of sales

(8,981,205

)

(5,423,671

)

GROSS PROFIT

5,549,094

5,278,865

Administrative expenses

(285,270

)

(85,090

)

OPERATING PROFIT

5,263,824

5,193,775

Finance costs

5

(2,363,205

)

(2,303,778

)

Finance income

5

13,394

163,980

PROFIT BEFORE INCOME TAX

6

2,914,013

3,053,977

Income tax

7

-

-

PROFIT FOR THE YEAR

2,914,013

3,053,977

Profit attributable to:

Owners of the parent

2,620,743

2,748,579

Non-controlling interests

293,270

305,398

2,914,013

3,053,977

PROFIT FOR THE YEAR

2,914,013

3,053,977

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,914,013

3,053,977

Total comprehensive income attributable to:

Owners of the parent

2,620,743

2,748,579

Non-controlling interests

293,270

305,398

2,914,013

3,053,977

ASSETS

NON-CURRENT ASSETS

Goodwill

9

-

-

Investments

10

-

-

-

-

CURRENT ASSETS

Inventories

11

54,867,231

42,926,049

Trade and other receivables

12

1,770,963

1,207,509

Contract assets

3

7,620,432

-

Cash and cash equivalents

13

2,978,829

4,901,884

67,237,455

49,035,442

TOTAL ASSETS

67,237,455

49,035,442

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

14

1

1

Retained earnings

15

1,969,010

(651,733

)

1,969,011

(651,732

)

Non-controlling interests

220,855

(72,415

)

TOTAL EQUITY

2,189,866

(724,147

)

LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables

16

42,362,242

40,091,041

Financial liabilities - borrowings

Interest bearing loans and borrowings

17

4,493,959

-

46,856,201

40,091,041

CURRENT LIABILITIES

Trade and other payables

16

18,191,388

9,668,548

TOTAL LIABILITIES

65,047,589

49,759,589

TOTAL EQUITY AND LIABILITIES

67,237,455

49,035,442

The financial statements were approved by the Board of Directors and authorised for issue on 30 June 2026 and were signed on its behalf by:

A Aslam - Director

ASSETS

NON-CURRENT ASSETS

Goodwill

9

-

-

Investments

10

100

100

100

100

CURRENT ASSETS

Inventories

11

51,150,613

39,381,161

Trade and other receivables

12

2,357,793

1,552,983

Contract assets

3

7,620,432

-

Cash and cash equivalents

13

2,917,480

4,895,236

64,046,318

45,829,380

TOTAL ASSETS

64,046,418

45,829,480

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

14

1

1

Retained earnings

15

2,800,173

(124,031

)

TOTAL EQUITY

2,800,174

(124,030

)

LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables

16

42,362,242

40,091,041

Financial liabilities - borrowings

Interest bearing loans and borrowings

17

4,493,959

-

46,856,201

40,091,041

CURRENT LIABILITIES

Trade and other payables

16

14,390,043

5,862,469

TOTAL LIABILITIES

61,246,244

45,953,510

TOTAL EQUITY AND LIABILITIES

64,046,418

45,829,480

The financial statements were approved by the Board of Directors and authorised for issue on 30 June 2026 and were signed on its behalf by:

A Aslam - Director

Called up

share

Retained

Non-controlling

Total

capital

earnings

Total

interests

equity

£

£

£

£

£

Balance at 1 January 2024

1

(3,400,312

)

(3,400,311

)

(377,813

)

(3,778,124

)

Changes in equity

Total comprehensive income

-

2,748,579

2,748,579

305,398

3,053,977

Balance at 31 December 2024

1

(651,733

)

(651,732

)

(72,415

)

(724,147

)

Changes in equity

Total comprehensive income

-

2,620,743

2,620,743

293,270

2,914,013

Balance at 31 December 2025

1

1,969,010

1,969,011

220,855

2,189,866

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

1

(3,190,151

)

(3,190,150

)

Changes in equity

Total comprehensive income

-

3,066,120

3,066,120

Balance at 31 December 2024

1

(124,031

)

(124,030

)

Changes in equity

Total comprehensive income

-

2,924,204

2,924,204

Balance at 31 December 2025

1

2,800,173

2,800,174

Cash flows from operating activities

Cash generated from operations

1

(13,008,709

)

604,639

Interest paid

(2,363,205

)

(2,303,778

)

Net cash from operating activities

(15,371,914

)

(1,699,139

)

Cash flows from investing activities

New Group loans in the year

8,941,506

4,415,983

Interest received

13,394

163,980

Net cash from investing activities

8,954,900

4,579,963

Cash flows from financing activities

New bank loan in year

4,493,959

-

Net cash from financing activities

4,493,959

-

(Decrease)/increase in cash and cash equivalents

(1,923,055

)

2,880,824

Cash and cash equivalents at beginning of year

2

4,901,884

2,021,060

Cash and cash equivalents at end of year

2

2,978,829

4,901,884

1.	RECONCILIATION OF PROFIT BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

2025

2024

£

£

Profit before income tax

2,914,013

3,053,977

Finance costs

2,363,205

2,303,778

Finance income

(13,394

)

(163,980

)

5,263,824

5,193,775

Increase in inventories

(11,941,182

)

(5,812,518

)

(Increase)/decrease in trade and other receivables

(565,664

)

2,968,745

Increase in contract assets

(7,620,432

)

-

Increase/(decrease) in trade and other payables

1,854,745

(1,745,363

)

Cash generated from operations

(13,008,709

)

604,639

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2025

31/12/25

1/1/25

£

£

Cash and cash equivalents

2,978,829

4,901,884

Year ended 31 December 2024

31/12/24

1/1/24

£

£

Cash and cash equivalents

4,901,884

2,021,060

1.	STATUTORY INFORMATION

52 Avenue Road 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 (£).

The amounts in the financial statements have been rounded to the nearest £1.

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted international accounting standards and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

Going concern

The financial statements have been prepared on a going concern basis which the directors consider to be appropriate.

The directors are of the opinion that the Group will have sufficient funds to meet its liabilities as they fall due. Funds will be provided through funding from the ultimate parent company, Select Group Limited, if required.

The directors have considered the ability of Select Group Limited to provide financial support based on information provided by Select Group Limited. The ability of Select Group Limited to continue to provide this support is dependent on the group achieving its own cash flow forecast and the continued availability of shareholder loans to the Group.

Based on these indications, the directors believe that it remains appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

Basis of consolidation

These consolidated account incorporate the accounts of the Company and its subsidiary, which has been consolidated on a line-by-line basis. The financial accounts of the subsidiary have been prepared up to 31 December.

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power of the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

Transactions eliminated on consolidation

All intra-group balances and transactions, and any unrealised gains or losses and income or expenses arising from intra-group transactions, are eliminated in full in preparing these consolidated financial statements. Unrealised gains arising from transactions with equity accounted investments are eliminated to the extent of the Group's interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Critical accounting judgements and key sources of estimation uncertainty

The critical accounting judgements and sources of some uncertainty is both the future construction cost and future sales value of the properties to be developed.

The Group has undertaken a professional design and build tender process, and has used current rates to determine future sales value. There is inherent uncertainty in both the cost to build and the future sales values.

Revenue recognition

Revenue from contracts with customers

The Group recognises revenue from contracts with customers based on a five step model as set out in IFRS 15:

Step 1 Identify the contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

Step 2 Identify the performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.

Step 3 Determine the transaction price: The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

Step 4 Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Group will allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Group expects to be entitled in exchange for satisfying each performance obligation.

Step 5 Recognise revenue when (or as) the entity satisfies a performance obligation.

The Group satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:

1. The customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; or

2. The Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or

3. The Group’s performance does not create an asset with an alternative use to the Group and the Company has an enforceable right to payment for performance completed to date.

For performance obligations where one of the above conditions are not met, revenue is recognised at the point in time at which the performance obligation is satisfied.

When the Group satisfies a performance obligation by delivering the promised goods or services it creates a contract asset based on the amount of consideration earned by the performance. Where the amount of consideration received from a customer exceeds the amount of revenue recognised this gives rise to a contract liability.

Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment. The Group has concluded that it is acting as a principal in all of its revenue arrangements.

Revenue is recognised in the statement of profit or loss to the extent that it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably.

Cash and cash equivalents

Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value.

In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under ‘current liabilities’ on the Statement of Financial Position.

Goodwill

Goodwill arose on the acquisition of DOMVS London (Canfield Place) Ltd in 2023. This was fully amortised in the year of acquisition.

Financial instruments

The Group classifies non-derivative financial assets into the category of loans and receivables. The Group classify non-derivative financial liabilities into the other financial liabilities categories.

Non-derivative financial assets and liabilities - recognition and de-recognition

The Group initially recognises loans and receivables on the date that they are originated. All other financial assets and financial liabilities are initially recognised on the trade date.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset, Any interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.

Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Non-derivative financial assets - measurement

Loans and receivables

These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method. Loans and receivables comprise trade and other receivables (excluding prepayments) and cash and cash equivalents.

Non-derivative financial liabilities - measurement

Non-derivative financial liabilities are initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method. Non-derivative financial liabilities includes a loan from the Parent Company, trade and other payables and amount due to related parties.

Share capital

Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects are recognised as a deduction from equity.

Inventories

Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Stocks are stated at the lower of cost and net realisable value. For work in progress relating to development costs, cost is taken as the direct costs of acquiring the land and property from third parties and includes, where appropriate, an element of site overheads. These costs are allocated to discrete units on a systematic basis depending on the nature of the costs themselves. Stock held for sale relates to property developments that are being sold by the company within the normal course of business.

Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the statement of financial position date.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Financing expenses and income

Financing expenses include interest payable, finance charges on shares classified as liabilities and finance charges on lease liabilities recognised in profit or loss using the effective interest method, unwinding of the discount on provisions, and net foreign exchange losses that are recognised in the income statement. Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial time to be prepared for use, are capitalised as part of the cost of that asset.

Financing income comprise interest receivable on funds invested, dividend income, interest income on lease receivables and net foreign exchange gains.

Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Dividend income is recognised in the income statement on the date the entity's right to receive payments is established. Foreign currency gains and losses are reported on a net basis.