Annual Report 2012 - Development Securities PLC

6 Finance income and costs
a) Finance income
14-month period
ended 29th February
2012
£’000
Financial Statements
Year ended
31st December
2010
£’000
Interest receivable 2,222 1,389
Other finance income 349 147
Fair value gain on financial instruments – interest rate swaps, caps and collars — 6
Total finance income 2,571 1,542
b) Finance costs
14-month period
ended 29th February
2012
£’000
Year ended
31st December
2010
£’000
Interest on bank loans and other borrowings 10,078 8,740
Interest on debenture 2,567 2,200
Amortisation of transaction costs 577 377
Fair value loss on financial instruments – interest rate swaps, caps and collars 550 —
Net foreign currency differences arising on retranslation of cash and cash equivalents 108 193
13,880 11,510
Capitalised interest on development and trading properties (665) —
Net finance cost 13,215 11,510
Interest was capitalised at an average rate of 5.57 per cent. No capitalised interest (31st December 2010: £nil) was written off in the period.
The tax treatment of capitalised interest follows the accounting treatment.
7 Taxation
14-month period
ended 29th February
2012
£’000
Year ended
31st December
2010
£’000
Current tax 812 —
Adjustment in respect of prior years — 210
Total current tax charge 812 210
Deferred tax charge 1,067 761
Total charge in the Statement of Comprehensive Income 1,879 971
14-month period
ended 29th February
2012
£’000
Year ended
31st December
2010
£’000
Tax on items credited to equity:
Deferred tax credit on other revaluations (1,067) (761)
Total credit in the Statement of Comprehensive Income (1,067) (761)
The differences between the total tax shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax
are as follows:
14-month period
ended 29th February
2012
£’000
Year ended
31st December
2010
£’000
(Loss)/profit before taxation (10,167) 2,649
Tax on (loss)/profit on ordinary activities at 26.5% (31st December 2010: 28.0%) (2,694) 742
Amounts not deductible for tax purposes 1,841 248
Notional gains recognised on property transactions in the period — 2,178
Adjustment in respect of prior years (742) 210
Indexation allowance (839) (1,535)
Impact on change in UK tax rate (159) —
Deferred tax credit not recognised/(brought forward losses utilised) 4,472 (872)
Total tax charge reported in the Statement of Comprehensive Income 1,879 971
Deferred tax is calculated in full on the temporary differences under the liability method using the tax rate of 25.0 per cent.
Development Securities PLC / Annual Report 2012 81