TPV2 TP70 2008 (II)

·    IAS 24 (Revised 2009) Related Party Disclosures (effective 1 January 2011) 
 
All of these changes will be applied by the Company from the effective date but 
none of them are expected to have a significant impact on the Company's 
financial statements. 
 
Capital Management 
 
The Company's objectives when managing capital are: 
·    to safeguard its ability to continue as a going concern, so that it can 
continue to provide returns to shareholders and benefits for other stakeholders; 
·    to ensure sufficient liquid resources are available to meet the funding 
requirements of its investments and to fund new investments where identified; 
 
The Company has no external debt; consequently all capital is represented by the 
value of share capital, distributable and other reserves.  Total Shareholder 
equity at 31 March 2010 was GBP19.8 million (2009: GBP19.8 million). 
 
Non-current Asset Investments 
The Company invests in financial assets with a view to profiting from their 
total return through income and capital growth. These investments are managed 
and their performance is evaluated on a fair value basis in accordance with a 
documented investment strategy, and information about the portfolio is provided 
internally on that basis to the Company's Board of directors. Accordingly upon 
initial recognition the investments and loan notes are designated as "at fair 
value through the profit and loss" ("FVTPL"). They are included initially at 
fair value which is taken to be their cost (excluding expenses incidental to the 
acquisition which are written off in the statement of comprehensive income and 
allocated to "capital" at the time of acquisition).  Subsequently the 
investments are valued at "fair value" which is measured as follows: 
 
 
Notes to the Financial Statements (continued) 
 
 
2.     Basis of preparation and accounting policies(continued) 
 
Non-current Asset Investments continued) 
·    Unlisted investments are fair valued by the directors in accordance with 
the International Private Equity and Venture Capital Valuation Guidelines. Fair 
value is established by using measurements of value such as price of recent 
transactions, earnings multiples and net assets. 
·    Listed investments are fair valued at bid price. 
Where securities are designated upon initial recognition as at fair value 
through the profit or loss, gains and losses arising from changes in fair value 
are included in net profit or loss for the period as a capital item in 
accordance with the AIC SORP.  The profit or loss on disposal is calculated net 
of transaction costs of disposal. 
 
Investments are recognised as financial assets on legal completion of the 
investment contract and are de-recognised on legal completion of the sale of an 
investment 
 
In accordance with the exception within IAS 28, "Investments in Associates", 
those undertakings in which the Company holds more than 20% of the equity are 
not regarded as associated undertakings.  Therefore these investments are 
measured at fair value in accordance with IAS 39, "Financial Instruments: 
Recognition and Measurement". 
 
Money Market Funds 
 
Money market funds are held at cost as the nature of these funds is their 
capital value remains at par and all income less operating costs is distributed. 
 All income is recognised as earned. 
 
Income 
Investment income includes interest earned on bank balances and money market 
securities and includes income tax withheld at source. Dividend income is shown 
net of any related tax credit and is brought into account on the ex-dividend 
date. 
 
Fixed returns on investment loans, debt and money market securities are 
recognised on a time apportionment basis so as to reflect the effective interest 
rate, provided there is no reasonable doubt that payment will be received in due 
course. 
 
Expenses 
All expenses are accounted for on the accruals basis. Expenses are charged to 
revenue with the exception of the investment management fee, which has been 
charged 25% to the revenue account and 75% to the capital account to reflect, in 
the directors' opinion, the expected long term split of returns in the form of 
income and capital gains respectively from the investment portfolio. 
 
Taxation 
Corporation tax payable is applied to profits chargeable to corporation tax, if 
any, at the current rate in accordance with IAS12, "Income Taxes". The tax 
effect of different items of income / gain and expenditure / loss is allocated 
between capital and revenue on the same basis as the particular item to which it 
arises using the marginal basis in line with the AIC SORP. 
 
In accordance with IAS12, "deferred tax" is recognised in respect of all 
temporary differences that have originated but not reversed at the balance sheet 
date where transactions or events have occurred at that date that will result in 
an obligation to pay more, or a right to pay less tax, with the exception that 
deferred tax assets are recognised only to the extent that the Directors 
consider that it is more likely than not that there will be suitable taxable 
profits from which the future reversal of the underlying timing can be deducted. 
These temporary differences are due to differences between the carrying amount 
and the tax base of assets and liabilities using the Balance Sheet method. The 
Directors have considered the requirements of IAS12 and do not believe that any 
provision should be made. 
 
 
 
Notes to the Financial Statements (continued) 
 
 
2.     Basis of preparation and accounting policies(continued) 
 
Financial instruments 
The Company's principal financial assets are its investments and the policies in 
relation to those assets are set out above.  Financial liabilities and equity 
instruments are classified according to the substance of the contractual 
arrangements entered into. An equity instrument is any contract that evidences a 
residual interest in the assets of the entity after deducting all of its 
financial liabilities. Where the contractual terms of share capital do not have 
any terms meeting the definition of a financial liability then this is classed 
as an equity instrument. Dividends and distributions relating to equity 
instruments are debited direct to equity. 
 
Derivatives, comprising income swaps, are classified at fair value through 
profit and loss. 
 
Provisions 
A provision is recognised when the Company has a legal or constructive 
obligation as a result of a past event and it is probable that an outflow of 
economic benefits will be required to settle the obligation. If the effect is 
material, expected future cash flows are discounted using a current pre-tax rate 
that reflects, where appropriate, the risks specific to the liability. 
Where the Company expects some or all of a provision to be reimbursed, for 
example under an insurance policy, the reimbursement is recognised as a separate 
asset but only when recovery is virtually certain. The expense relating to any 
provision is presented in the income statement net of any reimbursement. Where 
discounting is used, the increase in the provision due to unwinding the discount 
is recognised as a finance cost. 
 
Issued share capital 
Ordinary shares are classified as equity because they do not contain an 
obligation to transfer cash or another financial asset.  Issue costs associated 
with the allotment of shares have been deducted from the share premium account 
in accordance with IAS 32, "Financial Instruments: Presentation". 
 
Cash and cash equivalents 
 
Cash and cash equivalents represents cash available at less than 3 month's 
notice. 
 
Receivables 
Receivables are included at fair value on initial recognition and subsequently 
at amortised cost.  An impairment loss is recognised whenever the carrying 
amount of an asset exceeds the receivable amount.  The recoverable amount is 
only determined when objective evidence of impairment exists. 
 
Trade and other payables 
Trade and other payables are included at fair value on initial recognition and 
subsequently at amortised cost. 
 
Reserves 
All fixed asset investments are designated as fair value through profit or loss 
at the time of acquisition, and all capital gains or losses on investments so 
designated. Given the nature of the Company's venture capital investments, the 
changes in fair value of such investments recognised in these financial 
statements are not considered to be readily convertible to cash in full at the 
balance sheet date and accordingly these gains are treated as unrealised gains 
or losses. 
 
 When the Company re-values the investments still held during the period, 
any gains or losses arising are credited/charged to the Capital reserve - 
holding gains/(losses). 
 
 When an investment is sold any balance held on the Capital reserve - 
holding gains/(losses) is transferred to the Capital reserve - realised 
gains/(losses) as a movement in reserves. 
 
 Reserves available for potential distribution by way of a dividend are the 
revenue reserve and special distributable reserve. 
 
 
Notes to the financial Statements (continued) 
 
 
2.     Basis of preparation and accounting policies(continued) 
 
Reserves (continued) 
 
Movements in reserves and an analysis of the capital reserve between realised 
and unrealised are shown in the statement of changes in shareholders' equity. 
 
 
 
3.     Seasonality of operations 
The Company's operations are not seasonal. 
 
 
 
4.     Segmental reporting 
The Company only has one class of business, being investment activity. 
 
 
 
5.    Investment Income 
+----------------------+---------+---------+---------+--+---------+---------+---------+ 
|                      |               Year ended 31 |  |                Period ended | 
|                      |                  March 2010 |  |               31 March 2009 | 
+----------------------+-----------------------------+--+-----------------------------+ 
|                      | Revenue | Capital |   Total |  | Revenue | Capital |   Total | 
+----------------------+---------+---------+---------+--+---------+---------+---------+ 

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