HgCapital Trust

Our policy is to value HgCapital Trust plc’s investment portfolio at fair value. We achieve this by valuing individual investments on a considered basis using a consistent approach across the portfolio. Our valuation policy is owned by the Board and periodically reviewed by the Board’s Valuations Committee. The policy ensures that the portfolio valuation complies with all relevant accounting standards and is fully consistent with IFRS and the guidelines issued by the International Private Equity Valuation Board (the “IPEV guidelines” ). Further information can be found at www.privateequityvaluation.com.
 
Fair value is defined as “the price at which an orderly transaction would take place between Market Participants at the Reporting Date” (IPEV guidelines, August 2010). Fair value is therefore an estimate and accordingly determining fair value requires use of judgements.

VALUATION METHODOLOGY

HgCapital values portfolio companies in accordance with the IPEV Guidelines. The valuations are initially reviewed internally by the HgCapital Valuation Committee (this is independently chaired) and then independently by the Audit and Valuation Committee of HgCapital Trust plc, and the auditors of our funds.

Where there is a conflict between a recommendation contained in these Guidelines and the requirements of any applicable laws, regulations or accounting standards or generally accepted accounting principles, the latter requirements should take precedence.

GENERAL PRINCIPLES

Investments should be reported at their Fair Value, being the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction, except in situations where Fair Value cannot reliably be measured. In these situations the Investment should be valued at the previous reporting date unless there is evidence that the investment has since been impaired. Methodologies should be applied consistently from period to period, except where a change would result in better estimates of Fair Value.