COIF Charity Funds - CCLA

COIF Charities Fixed Interest Fund
Notes to the Accounts
1. Accounting policies
(a) Basis of accounting
The accounts have been prepared under the historical cost basis, as modified by the revaluation of investments,
and in accordance with and the Statement of Recommended Practice (Accounting & Reporting by Charities)
issued by the Charity Commission in March 2005 and the statement of Recommended Practice for Authorised
Funds issued by the Investment Management Association (IMA) in December 2005.
During the year the Fund has adopted the presentation requirements of Financial Reporting Standard 25 (FRS
25). FRS 25 requires that the assets attributable to investors are treated as a liability of the Fund and
distributions are treated as finance costs. The effects of these changes are that shareholders’ funds are now
described as net assets attributable to shareholders.
The investments of the Fund have been valued at market value at close of business on the balance sheet date.
Market value is defined by the new SORP as fair value which is the bid value of each security.The accounting
policy has been changed from the previous period to comply with the requirements of the new SORP. As the
restatement of the prior year comparatives is not required by the new SORP, the value of investments for the
prior year is shown at mid market value in line with the previous accounting policy. If comparative information
had been restated, the nature of the main adjustments required to the balance sheet at 31 December 2005
would be to reduce the value of investments by the spread between mid-market and bid-market values with an
equal reduction in unrealised gains on investments.
(b) Income recognition
Interest on Government stocks, debentures, eurosterling bonds, other fixed interest stocks and bank and COIF
Charities Deposit Fund balances is accrued on a daily basis.
(c) Management expenses
The Manager’s periodic charge paid to CCLA Investment Management Limited is charged to the income of the
Fund before distribution. The fee is based on a fixed percentage of the value of the Fund, which is currently
0.22% (2005, 0.22%) p.a. plus VAT, less a management fee rebate for the Fund’s deposits in COIF Charities
Deposit Fund. Each month, the value at the end of the previous month is taken to calculate the fee due. This fee
covers the provision of staff and investment services and other expenses incurred by the Manager. The
Corporate Trustee fee, audit, legal, safe custody fees and transaction charges and insurance are charged
separately to the income of the Fund before distribution.
(d) Distributions
Distributions are paid quarterly. The Fund utilises an income reserve to even out the fluctuations in income
which arise over the years (see Note 10).
(e) Basis of valuation
Listed investments are valued at bid-market values at the close of business on the last business day of the
accounting period. Any unquoted, unlisted, de-listed or suspended investments are stated at cost or valuation
by CCLA Investment Management Limited and reviewed by the Board.
Suspended securities are valued by the Manager having regard to the last dealing price on the date of
suspension and subsequent available information. Suspended securities are written off after they have been
carried at nil value for two years.
2. Net (losses)/gains on investments 31.12.2006 31.12.2005
£’000 £’000
The net (losses)/gains on investments during the year comprise:
Non-derivative securities (8,108) 2,591
Net (losses)/gains on investments (8,108) 2,591
3. Income 31.12.2006 31.12.2005
£’000 £’000
40
Interest on debt securities 9,666 10,272
Interest on COIF Charities Deposit Fund 111 177
Bank interest 18 4
9,795 10,453