TPV2 TP70 2008 (II)

issue during the year is equal to the number of shares in issue at both 31 March 
2009 and 31 March 2010. 
 
There are no potentially dilutive capital instruments in issue and, therefore, 
no diluted return per share figures are included in these financial statements. 
 
 
 
11.   Financial assets at fair value through profit and loss 
 
The Board's assessment of the key risks of the Company is disclosed on pages 
12-13 of the Directors' Report. 
 
Investments 
 
Effective from 1 January 2009 the Company adopted the amendment to IFRS 7 
regarding financial instruments that are measured in the balance sheet at fair 
value, this requires disclosure of fair value measurements by level of the 
following fair value measurement hierarchy: 
·    Level 1: quoted prices in active markets for identical assets or 
liabilities. The fair value of financial instruments traded in active markets is 
based on quoted market prices at the balance sheet date, A market is regarded as 
active if quoted prices are readily and regularly available, and those prices 
represent actual        and regularly occurring market transactions on an arms 
length basis. The quoted market price used for   financial assets held by the 
group is the current bid price. These instruments are included in level 1 and 
comprise AIM listed investments or government securities classified as held at 
fair value through profit or loss. 
·    Level 2: the fair value of financial instruments that are not traded in 
active markets is determined by using valuation techniques. These valuation 
techniques maximise the use of observable market data where it is 
available and rely as little as possible on entity specific estimates.  If all 
significant inputs required to fair   value an instrument are observable, the 
instrument is included in level 2. 
·    Level 3: the fair value of financial instruments that are not traded in an 
active market (for example, investments in unquoted companies) is determined by 
using valuation techniques such as earnings multiples. If one or more of the 
significant inputs is not based on observable market data, the instrument is 
included in level 3. 
 
There have been no transfers between these classifications in the period (2009: 
none). The change in fair value for the current and previous year is recognised 
through the profit or loss account. 
 
Further details of these investments are provided in the Investment Manager's 
Review. 
 
All items held at fair value through profit and loss were designated as such 
upon initial recognition. 
 
 
 
Notes to the Financial Statements (continued) 
 
 
11.   Financial assets at fair value through profit and loss (continued) 
 
Movements in investments held at fair value through profit and loss during the 
year to 31 March 2010 and included in profit or loss were as follows: 
 
+---------------------+-------------+-------------+-------------+ 
|                     |       Level |       Level |             | 
|                     |           3 |           2 |             | 
+---------------------+-------------+-------------+-------------+ 
|                     |    Unquoted |  Derivative |       Total | 
+---------------------+-------------+-------------+-------------+ 
|                     | Investments | Transaction | Investments | 
+---------------------+-------------+-------------+-------------+ 
|                     |     GBP'000 |     GBP'000 |     GBP'000 | 
|                     |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
| Opening cost        |     12,408  |      3,292  |     15,700  | 
+---------------------+-------------+-------------+-------------+ 
| Opening unrealised  |     (1,134) |     (1,126) |     (2,260) | 
| loss                |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
| Opening fair value  |     11,274  |      2,166  |     13,440  | 
| at 1 March 2009     |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
| Purchases at cost   |      2,385  |        -    |      2,385  | 
+---------------------+-------------+-------------+-------------+ 
| Disposal proceeds   |       (950) |        -    |       (950) | 
+---------------------+-------------+-------------+-------------+ 
| Unrealised gain on  |        182  |        195  |        377  | 
| investments         |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
| Closing fair value  |     12,891  |      2,361  |     15,252  | 
| at 31 March 2010    |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
| Closing cost        |     13,843  |      3,292  |     17,135  | 
+---------------------+-------------+-------------+-------------+ 
| Closing unrealised  |       (952) |       (931) |     (1,883) | 
| gain                |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
 
 
Movements in investments held at fair value through profit and loss during the 
period to 31 March 2009 and included in profit or loss were as follows: 
 
+---------------------+-------------+-------------+-------------+ 
|                     |       Level |       Level |             | 
|                     |           3 |           2 |             | 
+---------------------+-------------+-------------+-------------+ 
|                     |    Unquoted |  Derivative |       Total | 
+---------------------+-------------+-------------+-------------+ 
|                     | Investments | Transaction | Investments | 
+---------------------+-------------+-------------+-------------+ 
|                     |     GBP'000 |     GBP'000 |     GBP'000 | 
|                     |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
|                     |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
| Purchases at cost   |     12,408  |      3,292  |     15,700  | 
+---------------------+-------------+-------------+-------------+ 
| Unrealised (loss)   |     (1,134) |     (1,126) |     (2,260) | 
| on investments      |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
| Closing fair value  |     11,274  |      2,166  |     13,440  | 
| at 31 March 2009    |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
| Closing cost        |     12,408  |      3,292  |     15,700  | 
+---------------------+-------------+-------------+-------------+ 
| Closing unrealised  |     (1,134) |     (1,126) |     (2,260) | 
| loss                |             |             |             | 
+---------------------+-------------+-------------+-------------+ 
 
+---------------------+--------+--------+--------+ 
|                     |        |        |        | 
+---------------------+--------+--------+--------+ 
Level 3 valuations include assumptions based on non-observable data, such as 
discounts applied either to reflect movement in the fair value of financial 
assets held at the price of recent investments, or to adjust earnings multiples. 
 
 
Included in the above is an investment of GBP3,292,000 with Julius Baer, which 
is the subject of the derivative transaction described in note 12.  Due to the 
nature of this investment the deposit held by Julius Baer is an integral part of 
the transaction, therefore the Directors consider that it is appropriate to 
disclose this as part of the Investment Portfolio. 
 
 
 
 
Notes to the Financial Statements (continued) 
 
 
11.   Financial assets at fair value through profit and loss (continued) 
 
All investments are designated as fair value through profit or loss at the time 
of acquisition and all capital gains or losses arising on investments are so 
designated.  Given the nature of the Company's venture capital investments, the 
changes in fair values 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 any gains are or losses on these items are 
treated as unrealised. 
 
Sensitivity 
 
An increase of 1% in the value of investments would increase the capital profits 
for the year and the net asset value at 31 March 2010 by GBP153,000.  A decrease 
of 1% would reduce the capital profits and net asset value by the same amount. 
 
An increase of interest rates by 1% would have no significant impact. 
 
 
 
12.   Derivative transaction 
The Company has made a payment of GBP3,292,000 to Julius Baer and in return will 
receive back an equivalent sum plus or minus the performance in the intervening 
time of GAM Diversity 2.5XL. The transaction will run for a maximum of 5 years 
but may be terminated by the Company on three months' notice before the period 
expires.  The loss on this investment in the period is deemed to be a capital 
item and is therefore included in the capital column of the income statement. 
 
The value shown for the derivative transaction represents the amount payable by 
the company if the derivative transaction were closed on the balance sheet date. 
 
 
 
13.   Receivables 
+----------------------+-----------------+-----------+-----+-----------------+---------+ 
|                      |                   31-Mar-10 |     |                 31-Mar-09 | 
+----------------------+-----------------------------+-----+---------------------------+ 
|                      |                 |   GBP'000 |     |                 | GBP'000 | 
+----------------------+-----------------+-----------+-----+-----------------+---------+ 
| Receivables          |                 |       68  |     |                 |  2,500  | 
+----------------------+-----------------+-----------+-----+-----------------+---------+ 

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