APL Acp Capital

indicative bids from market makers. Where there is a significant or prolonged 
decline in fair value of an available for sale financial asset (which 
constitutes objective evidence of impairment), the full amount of the 
impairment, including any amount previously charged to equity is recognised in 
the income statement. Purchases and sales of available-for-sale financial assets 
are recognised on trade date with any change in fair value between trade date 
and settlement date being recognised in retained earnings. 
 
f)  Property, Plant and Equipment 
Office equipment is stated at historical cost less depreciation. Depreciation is 
calculated on a straight line method to allocate the cost over the estimated 
useful life. The estimated life of office equipment is 3 years. Assets costing 
less than GBP25,000 are written off on the year of acquisition. 
 
g)  Trade and other receivables 
Trade and other receivables are recognised initially at fair value. A provision 
for impairment is established where there is objective evidence that the Group 
will not be able to collect all amounts due according to the original terms of 
the receivables concerned. 
 
h)  Cash & cash equivalents 
Cash and cash equivalents comprise cash at bank and in hand and short-term 
deposits with an original maturity of three months or less. 
 
i)  Loans 
All loans and borrowings are initially recognised at the fair value of the 
consideration received net of issue costs associated with the borrowings. After 
initial recognition, these are subsequently measured at amortised cost using the 
effective interest method, which is the rate that exactly discounts the 
estimated future cash flows through the expected life of the liabilities. 
Amortised cost is calculated by taking into account any issue costs and any 
discount or premium on settlement. 
 
j)  Trade and other payables 
Trade and other payables are stated at amortised cost. 
 
k)  Equity instruments 
Equity instruments issued by the Group are recognised at the proceeds or fair 
value received with the excess of the amount received over 0.1p par value being 
credited to the share premium account. Direct issue costs are deducted from 
equity. 
 
l)  Revenue 
Income from loans and receivables is recognised as it accrues by reference to 
the principal outstanding and the effective interest rate applicable, which is 
the rate that exactly discounts the estimated future cash flows through the 
expected life of the financial asset to that asset's carrying value. 
 
 
Fee income earned on financing arrangements that relate to investments measured 
at fair value through profit or loss are recognised when that investment is 
made. Fees earned from financing arrangements that relate to investments 
classified as loans and receivables are recognised over the life of the assets. 
Fees in respect of any ongoing services are recognised as that service is 
provided. 
 
 
Dividends from equity investments are recognised in the income statement when 
the shareholders rights to receive payment have been established. 
 
m)  Dividends 
Dividends are recognised when they become legally payable. In the case of 
interim dividends to equity shareholders, this is when declared by the 
Directors. In the case of final dividends, this is when approved by the 
shareholders at the AGM. 
 
 
n)  Share-based payments 
Where equity settled share options are awarded to employees, the fair value of 
the options at the date of grant is charged to the consolidated income statement 
over the vesting period. Non-market vesting conditions are taken into account by 
adjusting the number of equity instruments expected to vest at each balance 
sheet date so that, ultimately, the cumulative amount recognised over the 
vesting period is based on the number of options that eventually vest. Market 
vesting conditions are factored into the fair value of the options granted. As 
long as all other vesting conditions are satisfied a charge is made irrespective 
of whether the market vesting conditions are satisfied. The cumulative expense 
is not adjusted for failure to achieve a market vesting condition. 
 
 
When the terms and conditions of options are modified before they vest, the 
increase in the fair value of the options, measured immediately before and after 
the modification, is also charged to the consolidated income statement over the 
remaining vesting period. 
 
o)  Finance expense 
Interest expense is calculated using the effective interest rate method. Finance 
costs are recognised in the income statement over the period of the loans and 
borrowings related to those costs. 
 
p)  Foreign currency translation 
Transactions entered into by group entities in a currency other the currency of 
the primary economic environment in which they operate (their "functional 
currency") are recorded at the rates ruling when the transactions occur. Foreign 
currency monetary assets and liabilities are translated at the rates ruling at 
the balance sheet date. Exchange differences arising on the retranslation of 
unsettled monetary assets and liabilities are translated at the rates ruling at 
the balance sheet date. Exchange differences arising on the retranslation of 
unsettled monetary assets and liabilities are recognised immediately in the 
consolidated income statement. 
 
 
On consolidation, the results of overseas operations are translated into 
sterling at rates approximating to those ruling when the transactions took 
place. All assets and liabilities of overseas operations are translated at the 
rate ruling at the balance sheet date. Exchange differences arising on 
translation the opening assets at opening rate and the results of overseas 
operations at actual rate are recognised directly in equity (the "translation 
reserve"). 
 
4 Significant judgments, key assumptions and estimates 
 
 
The Group's significant accounting policies are stated in note 3 above. Not all 
of these significant accounting policies required management to make difficult, 
subjective or complex judgements or estimates. The following is intended to 
provide an understanding of the policies that management consider critical 
because of the level of complexity, judgment or estimation involved in their 
application and their impact on the consolidated financial statements. These 
judgments involve assumptions or estimates in respect of future events. Actual 
results may differ from these estimates. 
 
a)  Fair value of financial instruments 
The Group determines the fair value of financial instruments that are not quoted 
by using either indicative prices or valuation techniques. These indicative 
prices and valuation techniques are significantly affected by the assumptions 
used, including discount rates and estimates of future cash flows. In that 
regard, the derived fair value estimation cannot always be substantiated by 
comparison with independent markets and in many cases may not be capable of 
being realised immediately. 
 
b)  Trade receivables and interest receivables on investments 
The Group is required to judge when there is sufficient objective evidence to 
require the impairment of individual trade receivables or interest receivables 
on its investments. It does this on the basis of the age of the relevant 
receivables, external evidence of the credit status of the debtor entity and the 
status of any disputed amounts. 
 
c)  Legal proceedings 
The Group reviews outstanding legal cases at each balance sheet date in order to 
assess the need for provisions and disclosures in the financial statements. This 
requires the Group's management to make determinations about various factual and 
legal matters beyond its control. Among the factors considered in making 
decisions on provisions are the nature of litigation, claim or assessment, the 
legal process and potential level of damages in the jurisdiction in which the 
litigation, claim or assessment has been brought, the progress of the case the 
opinions or views of legal advisers, experience on similar cases and any 
decision of the Group's management as to how it will respond to the litigation, 
claim or assessment. 
 
 
5 Segment reporting 
 
 
The Directors consider that there is only one business segment being specialist 
integrated finance and asset management and only one geographic area being 
Europe. 
 
 
 
 
 
 
 
 
 
 
6 Financial risk management 
 
 
The Group's activities expose it to a variety of financial risks: concentration 
risk, market price risk, interest rate risk, currency risk, credit risk, 
liquidity risk and capital risk. The Group's overall risk management programme 
focuses on the unpredictability of financial markets and seeks to minimise 
potential adverse effects on the Group's financial performance. 
 
a)  Concentration risk 
Concentration risk arises from individual investments to which the Group has 
significant exposure. The Group defines significant exposure as 20 percent of 
gross portfolio value. Concentration risk is managed through regular review of 
public information and from review of reports from debt agents and similar, 
where appropriate. The Group seeks to have board representation on such 
investments and to communicate regularly with managers of these investments. ACP 
management reports quarterly to the Board on the relevant investments. 
 
 
The concentration risks at year end were: 
-IFR Capital plc - the Group's exposure totaled GBP89.7 million of the net asset 
value total of GBP163.6 million (2007: GBP128.8 million of GBP233.2 million) 
-Leasecom Group SAS - the Group's exposure totaled GBP24.7 million of the net 
asset value total of GBP163.6 million (2007: GBP24.3 million of GBP233.2 
million) 
 
b)  Market price risk 
Market price risk arises from uncertainty in the future value of financial 
instruments. No new investments are being made. Existing investments are managed 
by the investment advisor who reports regularly to the Board to review past and 
expected future performance. The nature of investments is diverse. Monitoring 
includes reviewing monthly and quarterly financial management reports and 

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