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contractual obligations. These credit exposures exist within financing 
relationships, commitments, derivatives and other transactions. These exposures 
may arise, for example, from a decline in the financial condition of a 
counterparty, from entering into swap or other derivative contracts under which 
counterparties have obligations to make payments to us, from a decrease in the 
value of securities of third parties that the Company holds as collateral, or 
from extending credit through guarantees or other arrangements. As the Company's 
credit exposure increases, it could have an adverse effect on the Company's 
business and profitability if material unexpected credit losses occur. 
 
The Company will typically be in a first loss or subordinated position with 
respect to realised losses on the collateral of each investment.  With the 
exception of investments in senior CLO notes, the Company will typically be in a 
first loss or subordinated position with respect to realised losses on the 
collateral of each investment. The leveraged nature of the equity notes and the 
mezzanine notes, in particular, magnifies the adverse impact of collateral 
defaults.  The leveraged nature of the equity notes and the mezzanine notes, in 
particular, magnifies the adverse impact of collateral defaults. 
 
14.3.       Liquidity risk 
 
Liquidity risk is defined as the risk that the Company may not be able to settle 
or meet its obligations on time or at a reasonable price. 
 
The Company does not currently use leverage and as a result it has no financing 
subject to margin calls which may force the Company to liquidate assets. The 
Company's unleveraged capital structure reflects the long-term investment 
strategy and matches the illiquidity of the underlying investments. As the 
Company is a closed-ended investment company, it is not required to meet any 
fund redemptions. 
 
The Company has been established with a 15 year life. At the annual general 
meeting in 2021, the Directors will be obliged to put a special resolution to 
the shareholders for the winding-up of the Company. The Directors may be 
relieved of this obligation by special resolution of shareholders. The Directors 
expect that at the end of the 15 year life the Company's investments will have 
been realised or will be capable of immediate realisation at their fair values. 
There is no certainty that market events in the intervening period will not 
cause legal maturities in the Company's underlying investments to have been 
extended beyond the anticipated life of the Company thus causing the Directors 
to seek relief from winding up the Company. 
 
Given the Company's permanent capital structure as a closed-ended fund, it is 
not exposed to redemption risk. However the Company's financial instruments 
include investments in collateralised debt obligations and derivative contracts 
traded over-the-counter which are not traded in an organised public market and 
which may be illiquid. As a result, the Company may not be able to promptly 
liquidate some of its investments in these instruments at an amount close to its 
fair value in order to meet its liquidity requirements or to respond to specific 
events such as deterioration in the credit worthiness of any particular issuer. 
It may be impossible to assess the exposure to risk in such circumstances. 
 
The table below analyses the Company's financial liabilities into relevant 
maturity grouping based on remaining period at the statement of financial 
position date to the contractual maturity date. There is a facility agreement in 
place with JP Morgan to mitigate liquidity risk, which is undrawn at year end. 
The amounts in the table are the contractual undiscounted cash flows. Balances 
due within 12 months equal their statement of financial position carrying 
balance, as the impact of discounting is not significant. 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS (continued) 
 
For the year ended 31 December 2009 
 
 
14.          RISK ASSOCIATED WITH FINANCIAL INSTRUMENTS (continued) 
 
14.3.       Liquidity risk (continued) 
 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
|                                              |             |                   Due on |                   Due |                 Due between 3 |    Due |                     | 
|                                              |             |                          |                within |                               |  after |                     | 
|                                              |             |                          |                     3 |                               |     12 |                     | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
|                                              |             |                   demand |                months |                 and 12 months | months |               Total | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
| Company                                      |             |                        EUR |                     EUR |                             EUR |      EUR |                   EUR | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
|                                              |             |                          |                       |                               |        |                     | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
| Financial liabilities as at 31 December 2009 |             |                          |                       |                               |        |                     | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
| Derivative financial instruments             |             |                       -  |             (408,560) |                            -  |        |           (408,560) | 
|                                              |             |                          |                       |                               |      - |                     | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
| Other payables                               |             |                       -  |             (270,280) |                            -  |        |           (270,280) | 
|                                              |             |                          |                       |                               |      - |                     | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
| Total financial liabilities                  |             |                       -  |             (678,840) |                            -  |        |           (678,840) | 
|                                              |             |                          |                       |                               |      - |                     | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
|                                              |             |                          |                       |                               |        |                     | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
|                                              |             |                   Due on |                   Due |                 Due between 3 |    Due |                     | 
|                                              |             |                          |                within |                               |  after |                     | 
|                                              |             |                          |                     3 |                               |     12 |                     | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
|                                              |             |                   demand |                months |                 and 12 months | months |               Total | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
| Company                                      |             |                        EUR |                     EUR |                             EUR |      EUR |                   EUR | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 
|                                              |             |                          |                       |                               |        |                     | 
+----------------------------------------------+-------------+--------------------------+-----------------------+-------------------------------+--------+---------------------+ 

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