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Annual Report & Accounts 2012 - NOTES TO THE COMPANY FINANCIAL STATEMENTS
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H ANNUAL REPORT 2012 o l d i n g G~VC s 1. ACCOUNTING POLICIES A summary of the significant accounting policies are set out below, these policies have been applied consistently to the periods presented, unless otherwise stated. 1.1 Basis of Preparation The financial information has been prepared on the historical cost basis, and in accordance with applicable Isle of Man law and United Kingdom accounting standards. 1.2 Investments Investments in subsidiary undertakings are stated at cost less amounts written off. 1.3 Foreign Currency Translation The Company maintains its accounting records in Euro and the balance sheet and profit and loss account are expressed in this currency. Income and charges are translated at the exchange rates ruling at the transaction date. Fixed assets are valued using historical exchange rates. Other current assets and liabilities expressed in foreign currencies are translated into EUR at the rates of exchange in effect at the balance sheet date. Realised exchange gains and losses and unrealised exchange losses are recognised in the profit and loss account. 1.4 Fixed Assets Investments in subsidiaries are show as fixed assets in the Company balance sheet, and are valued at cost less any provision for impairment in value. 1.5 Trade and Other Debtors Trade and other receivables are stated at amortised cost. A provision for impairment will be recorded where there is evidence that the Company will not be able to collect all costs due according to the terms of the receivable concerned. 1.6 Trade and Other Creditors Trade and other payables are stated at their fair value and subsequently measured at amortised cost. 1.7 Share Based Payments The Group has a share option scheme which allows Group employees and contractors to acquire shares of the Company. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using a binomial valuation model. This valuation method take into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest. See note 8 for further details of the two schemes. Payments made to repurchase or cancel vested awards are accounted for with the fair value of the options cancelled, measured at the date of cancellation being taken to retained earnings; the balance is taken to the income statement. 1.8 Related Party Transactions Financial Reporting Standard 8, 'Related Party Transactions', requires the disclosure of the details of material transactions between the reporting entity and related parties. The Company has taken advantage of exemptions under FRS 8 not to disclose transactions between wholly owned Group companies. 2. PROFIT AND LOSS ACCOUNT The profit for the year dealt with in the accounts of the Company was €3,018,000 (2011: €3,717,000). The Company has not presented a separate profit and loss account. 66 NOTES TO THE COMPANY FINANCIAL STATEMENTS for the year ended 31 December 2012