TPV2 TP70 2008 (II)

The Company has a Board of four non-executive Directors, three of whom are 
considered to be independent of the Company's investment manager (the exception 
being Peter Hargreaves). The Board meets regularly on a quarterly basis, and on 
other occasions as required, to review the investment performance and monitor 
compliance with the investment policy laid down by the Board. The Board has a 
formal schedule of matters specifically reserved for its decision and the 
agreement between the Company and the Investment Manager has authority and 
limits beyond which Board approval must be sought. 
 
The Investment Manager has authority over the management of the investment 
portfolio, the organisation of custodial services, accounting, secretarial and 
administrative services. In practice the Investment Manager makes investment 
recommendations for the Board's approval. In addition all investment decisions 
involving other VCTs managed by the Investment Manager are taken by the Board 
rather than the Investment Manager. Other matters reserved for the Board 
include: 
·      the consideration and approval of future developments or changes to the 
investment policy, including risk and asset allocation; 
·      consideration of corporate strategy; 
·      approval of the appropriate dividend to be paid to the shareholders 
·      the appointment, evaluation, removal and remuneration of the Manager; 
·      the performance of the Company, including monitoring the net asset value 
per share; and 
·      approving shareholder communications. 
 
The Chairman leads the Board in the determination of its strategy and in the 
achievement of its objectives.  The Chairman is responsible for organising the 
business of the Board, ensuring its effectiveness and setting its agenda, and 
has no involvement in the day to day business of the Company.  He facilitates 
the effective contribution of the directors and ensures that they receive 
accurate, timely and clear information and that they communicate effectively 
with shareholders. 
 
The Company Secretary is responsible for advising the Board through the Chairman 
on all governance matters.  All of the directors have access to the advice and 
services of the Company Secretary, which has administrative responsibility for 
the meetings of the Board and its committees.  Directors may also take 
independent professional advice at the Company's expense where necessary in the 
performance of their duties.  As all of the directors are non-executive, it is 
not considered appropriate to identify a member of the Board as the senior 
non-executive director of the Company. 
 
The Company's articles of association and the schedule of matters reserved to 
the Board for decision provide that the appointment and removal of the Company 
Secretary is a matter for the full Board. 
 
 
 
Report of the Directors - Corporate Governance (continued) 
 
The Company's articles of association require that one third of the directors 
should retire by rotation each year and seek re-election at the Annual General 
Meeting, and that directors newly appointed by the Board should seek 
re-appointment at the next Annual General Meeting.  The Board complies with the 
requirement of the Combined Code that all directors are required to submit 
themselves for re-election at least every three years. 
 
The Board regularly reviews the independence of its members and is satisfied 
that (with the exception of Peter Hargreaves who is beneficially interested in 
TPIM LLP, the Company's investment manager) the Company's directors are 
independent in character and judgement and there are no relationships or 
circumstances which could affect their objectivity. 
 
During the year ended 31 March 2010 the following meetings were held: 
 
+--------------------+----------+-----------+-----------+ 
| Directors present  |  4 Full  |           |  2 Audit  | 
|                    |  Board   |           |Committee  | 
|                    |Meetings  |           | Meetings  | 
+--------------------+----------+-----------+-----------+ 
| J C Murrin         |    4     |           |    2      | 
| (Chairman)         |          |           |           | 
+--------------------+----------+-----------+-----------+ 
| J Lucas-Tooth      |    4     |           |    2      | 
+--------------------+----------+-----------+-----------+ 
| R V Reid           |    4     |           |    2      | 
+--------------------+----------+-----------+-----------+ 
| P W Hargreaves     |    4     |           |   2       | 
+--------------------+----------+-----------+-----------+ 
 
 
The Board has appointed an Audit Committee, of which Chad Murrin is Chairman, 
comprising the full Board, which deals with matters relating to audit, financial 
reporting and internal control systems. The committee meets as required and has 
direct access to Grant Thornton UK LLP, the Company's auditor. The committee met 
once in the period ending 31 March 2010. 
 
The Audit Committee safeguards the objectivity and independence of the auditor 
by reviewing the nature and extent of non-audit services supplied by the 
external auditors of the Company, seeking to balance objectivity and value for 
money. 
 
The Audit Committee's terms of reference include the following roles and 
responsibilities: 
·   reviewing and making recommendations to the Board in relation to the 
Company's published financial statements and other formal announcements relating 
to the Company's financial performance; 
·   reviewing and making recommendations to the Board in relation to the 
Company's internal control (including internal financial control) and risk 
management systems; 
·   periodically considering the need for an internal audit function; 
·   making recommendations to the Board in relation to the appointment, 
re-appointment and removal of and approving the remuneration and terms of 
engagement of the external auditor; 
·   reviewing and monitoring the external auditor's independence and objectivity 
and the effectiveness of the audit process, taking into consideration relevant 
UK professional regulatory requirements; 
·   ensuring that the investment manager has arrangements in place for the 
investigation and follow-up of any concerns raised confidentially by staff in 
relation to propriety of financial reporting or other matters. 
 
The committee reviews its terms of reference and effectiveness annually and 
recommends to the Board any changes required as a result of the review.  The 
terms of reference are available on request from the Company Secretary. 
 
The Board considers that the members of the committee are independent and 
collectively have the skills and experience required to discharge their duties 
effectively, and that the chairman of the committee meets the requirements of 
the Combined Code as to relevant financial experience. 
 
 
Report of the Directors - Corporate Governance (continued) 
 
The Company does not have an independent internal audit function as it is not 
deemed appropriate given the size of the Company  and the nature of the 
Company's business.  However, the committee considers annually whether there is 
a need for such a function and if so would recommend this to the Board. 
 
During the year ended 31 March 2010, the Audit Committee discharged its 
responsibilities by: 
 
·   reviewing and approving the external auditor's terms of engagement and 
remuneration; 
·   reviewing the external auditor's plan for the audit of the financial 
statements, including identification of key risks and confirmation of auditor 
independence; 
·   reviewing TPIM LLP's statement of internal controls operated in relation to 
the Company's business and assessing those controls in minimising the impact of 
key risks; 
·   reviewing periodic reports on the effectiveness of TPIM LLP's compliance 
procedures; 
·   reviewing the appropriateness of the Company's accounting policies; 
·   reviewing the Company's half-yearly results statements and interim 
management statements prior to Board approval; and 
 
Internal Control 
 
The Directors have overall responsibility for keeping under review the 
effectiveness of the Company's systems of internal controls. The purpose of 
these controls is to ensure that proper accounting records are maintained, the 
Company's assets are safeguarded and the financial information used within the 
business and for publication is accurate and reliable; such a system can only 
provide reasonable and not absolute assurance against material misstatement or 
loss. The system of internal controls is designed to manage rather than 
eliminate the risk of failure to achieve business objectives. The Board 
regularly reviews financial results and investment performance with its 
investment managers. 
 
TPIM LLP is engaged to provide administrative including accounting services and 
retains physical custody of the documents of title relating to investments. 
 
The Directors confirm that they have established a continuing process throughout 
the year and up to thedate of this report for identifying, evaluating and 
managing the significant potential risks faced by the Company and have reviewed 
the effectiveness of the internal control systems. As part of this process an 
annual review of the internal control systems is carried out in accordance with 
"Internal Controls: Guidance for Directors on the Combined Code", published by 
the Institute of Financial Reporting Council. This process has been in place 
throughout and subsequent to the accounting period under review. 
 
Risk management 
 
TPIM LLP carries out management of liquid funds in accordance with the policy 
guidelines laid down and regularly reviewed by the Board. In general the 
guidelines require that uninvested cash will be held in money market funds. The 
Company has no borrowing facilities 
Risk management is discussed in greater detail in the Directors' Report on pages 
12-13. 
 
Going concern 
 
After making the necessary enquiries, the Directors confirm that they are 

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