How do I develop a composition?

A good place to start with a composition is to look at the set works. Perhaps you have been talking about some of the compositional features of the set works, such as melody and accompaniament, rhythmic variations, alberti bass lines or modal harmonies... You need to be able to show the examiner that you are aware of the compositional devices you are using, and that you are able to develop them effectively.

I find that a good way to start a composition is by improvising on my instrument. I then come up with a few key ideas or motives, perhaps a series of notes which create an interesting harmonic soundscape, a rhythmic cell, or perhaps an interesting structure. 

There are many ways to develop your initial ideas. There are systematic ways such as applying devices like retrograde, (playing the pitches backwards) inversion, (flipping the pitches around a pitch centre, for example, if the original melody was C, D, E, G, F, the inverted melody, if flipped around C would be C, Bflat, Aflat, F, G). Or you may want to compose in a more organic way, through improvisation for instance. 

If you are at all stuck, just remember to go back to the orignal idea that you came up with, the piece will sound more coherent if it all links together in some way!