Crown Place VCT PLC

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CROWN PLACE VCT PLCNOTES TO THE SUMMARISED SET OF FINANCIAL STATEMENTSfor the six months ended 31 December 2007 (unaudited)1. Accounting policies (continued)Company accounting policies (continued)subsidiaries have subsequently been measured at their fair value as at the balance sheet date. Theinvestments in subsidiaries are carried at fair value determined by Directors based on the net assetsmethod.InvestmentsIn accordance with FRS 26, equity investments are designated as FVTPL. Unquoted investments’ fairvalue is determined by the Directors in accordance with the International Private Equity and VentureCapital Valuation Guidelines. Fair value movements on equity investments and gains and losses arisingon the disposal of investments are reflected in the capital column of the Income Statement inaccordance with the AITC SORP.Unquoted loan stock is classified as loans and receivables in accordance with FRS 26 and carried atamortised cost using the EIR method. Loan stock accrued interest is recognised in the Balance Sheet aspart of the carrying value of the loans and receivables at the end of each reporting period.Investments listed on recognised exchanges are valued at the closing bid prices at the end of theaccounting period.Investments are recognised as financial assets on legal completion of the investment contract and arede-recognised on legal completion of the sale of an investment.It is not the Company’s policy to exercise control or significant influence over investee companies.Therefore in accordance with the exemptions under FRS 9 “Associates and joint ventures”, thoseundertakings in which the Company holds more than 20% of the equity are not regarded as associatedundertakings.TaxationTaxation is applied on a current basis in accordance with FRS 16 “Current tax”. Taxation associatedwith capital expenses is applied in accordance with the SORP. In accordance with FRS 19, “Deferredtax”, deferred taxation is provided in full on timing differences that result in an obligation at the balancesheet date to pay more tax or a right to pay less tax, at a future date, at rates expected to apply whenthey crystallise based on current tax rates and law. Timing differences arise from the inclusion of itemsof income and expenditure in taxation computations in periods different from those in which they areincluded in the financial statements. Deferred tax assets are recognised to the extent that it is regardedas more likely than not that they will be recovered. The specific nature of taxation of venture capitaltrusts mean that it is unlikely that any deferred tax will arise. The Directors have considered therequirements of FRS 19 and do not believe that any provision should be made.DividendsIn accordance with FRS 21 “Events after the balance sheet date”, dividends are accounted for in theperiod in which the dividend has been paid, or approved by shareholders.19
CROWN PLACE VCT PLCNOTES TO THE SUMMARISED SET OF FINANCIAL STATEMENTSfor the six months ended 31 December 2007 (unaudited)1. Accounting policies (continued)Company accounting policies (continued)Issue costsIssue costs associated with the allotment of share capital have been deducted from the share premiumaccount in accordance with FRS 25.Group and Company accounting policiesInvestment incomeDividends receivable on equity investments are taken to revenue on an ex-dividend basis. Fixed returnson debt securities are recognised on a time apportionment basis using an effective interest rate over thelife of the financial instrument.Investment management fees, performance incentive fees and other expensesAll expenses have been accounted for on an accruals basis. Expenses are charged through the revenueaccount of the Income Statement, except for management fees and performance incentive fees. Theseare allocated in part to the capital account, to the extent that these relate to an enhancement in the valueof the investments and in line with the Board’s expectation that over the long term 75% of theCompany’s investment returns will be in the form of capital gains.Debtors and creditors• Debtors are non-interest bearing, are short term in nature and are accordingly stated at theirnominal value, as reduced by appropriate allowances for estimated irrecoverable amounts. TheDirectors consider that the carrying amount of debtors approximates their fair value.• Current liabilities are non-interest bearing and are stated at their nominal value. The Directorsconsider that the carrying amount of current liabilities approximates their fair value.ReservesCapital redemption reserveThis reserve accounts for amounts by which the issued share capital is diminished through therepurchase and cancellation of the Company’s own shares.Own shares held reserveThis reserve accounts for amounts paid on buying Treasury shares.20
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Crown Place VCT PLC

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