FINANCIAL MANAGEMENT

Financial Management

Financial Management

Arkle Master Issuer plc

The Company was registered as Arkle Master Issuer plc in England and Wales on 20 September 2006 as a public limited company? with authorised share capital of £50?000 comprising 50?000 ordinary shares of £1 each. All of the authorised share capital of £50?000 was issued? of which 49?999 shares were partly paid to £0.25 each and one share was fully paid up. (Weick 2006)

Given the straight forward nature of the business? the Company's directors are of the opinion that analysis using KPIs is not necessary for an understanding of the development? performance or position of the Company. However? the performance of the Company is monitored by comparing the actual repayments on the issued loan notes to those forecast in the Company's Offering Circular. To date? all loan repayments have been made in accordance with the forecast.

Company law requires the directors to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the Company. The directors confirm that suitable accounting policies have been used and applied consistently in the year. They also confirm that reasonable and prudent judgements and estimates have been made in preparing the financial statements for the period from 12 May 2007 to 31 December 2007 and that applicable accounting standards have been followed. The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 1985. (Weick 2006)

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. So far as the directors are aware? there is no relevant audit information of which the Company's auditors are unaware? and the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Interest income and expense are recognised in the income statement for all interest-bearing financial instruments? including loans and advances? using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset or liability and of allocating the interest income or interest expense. The effective interest rate is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the instrument or? when appropriate? a shorter period? to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate? the future cash flows are estimated after considering all the contractual terms of the instrument but not future credit losses.

Current tax which is payable on taxable profits is recognised as an expense in the period in which the profits arise. Deferred tax is provided in full? using the liability method? on temporary differences ...