Annual Report 2012 - Cadogan

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NOTES ON THE FINANCIAL STATEMENTS 31 DECEMBER 2012 1 accounting Policies (continued) (h) stocks Stocks are stated at the lower of cost and net realisable value. (i) taxation Provision is made for deferred taxation on all material timing differences. No deferred taxation is provided on the revaluation of investment properties, unless a binding agreement for the sale of the asset exists at the year end. (j) Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction or at the contracted rate if the transaction is covered by a forward foreign currency contract. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date or if appropriate at the forward contract rate. (k) Derivative instruments The group uses forward foreign currency contracts to reduce exposure to foreign exchange rates. The group also uses interest rate swaps to adjust interest rate exposures. The group considers its derivative instruments qualify for hedge accounting when certain criteria are met. Details of the relevant criteria are set out below. Forward foreign currency contracts The criteria for forward foreign currency contracts are: • the instrument must be related to a firm foreign currency commitment; • it must involve the same currency as the hedged item; and • it must reduce the risk of foreign currency exchange movements on the group’s operations. The rates under such contracts are used to record the hedged item. As a result, gains and losses are offset against the foreign exchange gains and losses on the related financial assets and liabilities, or where the instrument is used to hedge a committed future transaction, are not recognised until the transaction occurs. Interest rate swaps The group’s criteria for interest rate swaps are: • the instrument must be related to an asset or a liability; and • it must change the character of the interest rate by converting a variable rate to a fixed rate or vice versa. Interest differentials are recognised by accruing within net interest payable. Interest rate swaps are not revalued to fair value or shown on the group balance sheet at the year end. If they are terminated early, the gain/ loss is spread over the remaining maturity of the original instrument. (l) Pension benefits The pension costs relating to the group’s defined benefit scheme are accounted for in accordance with Financial Reporting Standard 17 – ‘Retirement Benefits’ (FRS17). Current service costs and net financial returns are included in the profit and loss account in the year to which they relate. Actuarial gain and losses and movements on the deferred asset relating to the pension liability are recognised in the statement of recognised gains and losses. The annual contributions for defined contribution schemes are charged to the profit and loss account in the year to which they relate. 28
NOTES ON THE FINANCIAL STATEMENTS 31 DECEMBER 2012 2 turnover and segmental analysis Turnover, group profit on ordinary activities before tax and net assets are analysed as follows: Property investment Hotels and Concert Hall Total 2012 2011 2012 2011 2012 2011 £000 £000 £000 £000 £000 £000 turnover Gross rental income and other sales Other income Total turnover Turnover of No.11 Cadogan Gardens included above 104,714 99,174 9,160 5,676 113,874 104,850 2,575 1,074 – – 2,575 1,074 107,289 100,248 9,160 5,676 116,449 105,924 – – 2,604 3,850 2,604 3,850 Profit Continuing operations 68,655 82,783 332 450 68,987 83,233 Profit on disposal of fixed assets Net interest Profit on ordinary activities before taxation Operating profit of No.11 Cadogan Gardens included above 17,293 17,155 (28,944) (28,807) 57,336 71,581 – – 192 1,160 192 1,160 net assets Continuing operations Net assets of No.11 Cadogan Gardens included above 3,267,303 2,971,734 49,231 16,380 3,316,534 2,988,114 – – 33,510 16,556 33,510 16,556 All operations take place within the United Kingdom. The group operates in two principal areas of activity, property investment and hotels and concert hall activities. On 25 January 2012 the group acquired Couture Holdings Limited, a holding company which owned indirectly the business, assets and liabilities of No.11 Cadogan Gardens, a luxury boutique hotel in Chelsea. The activities of this business are included within the Hotels and Concert Hall sector shown above together with those of Cadogan Hotel Partners Limited, which was acquired in 2011. 29
Page 1 and 2: CADOGAN GROUP LIMITED Annual Report
Page 3 and 4: CHAIRMAN’S STATEMENT 31 DECEMBER
Page 5 and 6: Financial Highlights GROSS RENTS AN
Page 8: CHIEF ExECUTIVE’S REVIEW 31 DECEM
Page 16 and 17: CHIEF ExECUTIVE’S REVIEW 31 DECEM
Page 21 and 22: 20 DIRECTORS’ REPORT 31 DECEMBER
Page 23 and 24: INDEPENDENT AUDITOR’S REPORT 31 D
Page 25 and 26: CONSOLIDATED BALANCE SHEET 31 DECEM
Page 27 and 28: COMPANY BALANCE SHEET 31 DECEMBER 2
Page 29: NOTES ON THE FINANCIAL STATEMENTS 3
Page 33 and 34: NOTES ON THE FINANCIAL STATEMENTS 3
Page 47 and 48: FIVE YEAR SUMMARY 31 DECEMBER 2012

Annual Report 2012 - Cadogan

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