Annual Report and Accounts 2011 Company information Financial information Corporate information Business review Overview 12 Introduction statement Executive’s Chief 10 08 Chairman’s statement aglance at Capital SVG 02 plc Capital SVG to Welcome 01 12 Investment objective Investment 12 12 Investment policy 12 Key performance indicators performance Key 12 13 Strategy 13 30 List of investments (Group) of List investments 30 and Risks risk management 27 26 Contractual arrangements Fund management businesses 26 15 companies underlying largest 23 review Investment portfolio 17 Large 17 investments 16 Financial review 15 Marketplace 9 Corporate social responsibility 49 Corporate 44 governance 37 Remuneration report of the Directors Report 34 Board of Directors 32 2 Consolidated income statement 52 Independent auditors’ report 51 52 52 54 Consolidated statement of changes in equity in changes of statement Consolidated 54 53 Company income statement 53 6 Consolidated balance sheet 56 Company statement of changes in equity 55 7 Company balance sheet 57 102 Notice of Annual General Meeting General Annual of Notice 102 accounts the to Notes 60 statement flow cash Company 59 statement flow cash Consolidated 58 109 Glossary of terms of Glossary 109 108 Financial calendar 108 Advisers 107 Annual Report 2011 Report Annual SVG Capital plc comprehensive income Company statement of comprehensive income of statement Consolidated for shareholders Company and E-communications summary Exchange. Stock London business listed on the management fund and investor equity private international SVG Capital is an www.svgcapital.com Find us online 1 SVG Capital plc Annual Report 2011 01 Welcome to SVG Capital plc

Our objective… SVG Capital’s investment objective is to achieve capital appreciation Overview by investing principally in private equity funds that are managed or advised by Permira, a leading international private equity specialist. In addition, the Company invests in private equity funds that invest in Japan, North America, Asia and the life sciences sectors, and in unquoted and quoted businesses through specialist funds and co-investments alongside these funds. The Company may also invest in other private equity related assets and alternative asset classes. To complement this investment objective and create capital and income for the Company, its fund management business structures, markets, manages and advises products for investment in private equity, private equity related assets, alternative asset classes and in public equity using private equity techniques.

More detail on our top 15 investments 23 | 25 p SVG Capital plc 02 Annual Report 2011 SVG Capital at a glance

Our business… The Group invests from its own balance sheet as well as on behalf of third-party investors through funds that it manages and/or advises. At 31 December 2011, total assets and commitments under advice or management were £4.1 billion, including £2.7 billion1 managed or advised on behalf of third-parties.

Private equity investment SVG Capital invests in a portfolio of private equity funds, the majority of which are advised by Permira, a leading international private equity specialist. Fund management SVG Capital’s fund management businesses, SVG Advisers (SVGA) and SVG Investment Managers (SVGIM), structure, market, manage and advise products for investment in private equity and public equity using private equity techniques. Total assets Balance sheet: 31 Dec 31 Dec £1,306.9m 2011 2010 Investment portfolio £1,168.5m £1,248.8m Net investment portfolio Cash £121.0m £17.1m Other assets £17.4m £15.7m £1,168.5m Total assets £1,306.9m £1,281.6m Senior Notes (£162.0m) (£198.5m) +11.2% Bank facility – (£19.3m) total return Convertible bonds (£90.9m) (£101.9m) Since December 2010 Other liabilities and non-controlling interests (£15.3m) (£16.2m) Net assets of £1,079.2m Shareholders’ funds (audited)2 £1,038.7m £945.7m Directors’ valuation of SVGA and SVGIM (unaudited) £40.4m £53.7m 350.2p per share Net assets (including SVGA and SVGIM) (unaudited) £1,079.1m £999.4m Net assets per share (unaudited) 350.2p 315.9p Shareholders’ funds Net debt as % of Shareholders’ funds 12.3% 31.9% £1,038.7m Loan to value ratio (maximum of 30%)3 13.4% 16.2%

1 This figure excludes SVG Capital’s commitments/investments in SVG Advisers’ and SVG Investment Managers’ managed or advised funds 2 Calculated in accordance with IFRS 3 Maximum decreased to 30% from 1 July 2011 with the flexibility to go up to 40% for one nine month period SVG Capital plc Annual Report 2011 03

Portfolio: Private equity funds Overview

Valuation analysis Dec 2011 Dec 2010 4 1 Value £955.9m £1,065.5m1 56 3 Percentage of the investment portfolio 81.8% 85.3%1

By value Investing in 17 funds with an underlying portfolio of 97 companies2, 95.9% of the private equity funds portfolio and 78.4% of the total investment portfolio is invested 2 in Permira funds.

£m 1,065.5 14.5 (247.0) 122.9 955.9 31 Dec 2011 31 Dec 2010 1,100 % % (by value) (by value) 1,000 900 1. Earnings 60 39 800 2. Quoted 23 18 700 3. Written down – earnings 10 35 600 4. Third-party 5 6 500 5. Written down 1 1 400 300 6. Cost 1 1 200 100 Geographical analysis 0 Opening Calls Distributions Return Closing 1 5 1 valuation paid received portfolio 4 1 Figures restated to include the one remaining warehoused asset 2 Excluding investments held by American Capital Equity II 3 By value Key features of the 12 months 2 1. Total return of 11.4% over the year as strong earnings momentum across the 31 Dec 2011 31 Dec 2010 portfolio companies outweighed the negative impact of financial market volatility. % % (by value) (by value) 2. Strong earnings momentum supported by top-line growth as management 1. Global 55 51 teams continued to drive initiatives such as geographic expansion and new 2. Continental Europe 18 24 product launches. 3. UK 13 11 3. Weighted average year-on-year revenues and earnings increased by 32% and 40% 4. Asia 12 11 respectively across our investments in Permira IV. 5. North America 2 3 4. Aggregate debt across the top 15 companies decreased by 9.1% over the year (in constant currencies). Sector analysis

7 8 1 6 Major unrealised portfolio movements Change in year1 5 By value 2 Hugo Boss and VFG 260.9 +£96.1m 164.8 4 3 Galaxy Entertainment 120.2 70.5 +£79.4m 111.3 31 Dec 2011 31 Dec 2010 % % 104.3 (by value) (by value) iglo Group +£18.1m 86.2 1. Retail 29 22 Ayrsta LifeScience 148.3 2. Consumer 15 9 +£15.1m 133.2 3. Chemicals 15 20 Freescale 48.8 4. Leisure 14 11 (£14.6m) 63.4 5. Electronics and 13 17 ProSiebenSat 51.9 communications (£14.8m) 66.7 6. Media 7 12 31 Dec 2011 £m2 31 Dec 2010 £m2 Distributions in 12 months 7. Financial 5 4 1 8. Medical/health 2 2 Including Permira feeder vehicles 2 Gross of any carried interest provision 9. Other services – 3 SVG Capital plc 04 Annual Report 2011 SVG Capital at a glance continued 15 largest underlying companies

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1 2 3 4 5 Hugo Boss Arysta LifeScience Galaxy iglo Group TDC and Valentino Agrochemicals Entertainment Frozen food Communications Fund Fund solutions Fashion Group Permira IV Casino and hotel Permira Europe III Fund Fashion Cost operator Cost Permira Europe II, Permira Europe III Fund Fund Cost Permira IV £151.5m Permira IV £49.0m % of gross private equity portfolio % of gross private equity portfolio Cost Cost £40.8m £205.5m 14.2% £43.5m 10.0% % of gross private equity portfolio Value Dec 2011 Value Dec 2011 % of gross private equity portfolio % of gross private equity portfolio 6.6% 25.0% £148.3m 11.5% £104.3m Value Dec 2011 Value Dec 2011 Value Dec 2011 £69.1m £260.9m £120.2m

6 7 8 9 10 ProSiebenSat.1 Freescale Acromas Legico Marazzi Media Embedded (AA Saga) Finance Ceramic tiles semiconductors Fund Fund Television and radio Motoring, travel, media, Permira IV Permira IV Fund Fund finance Cost Cost Permira IV Permira IV Fund Cost Cost Permira Europe III £50.4m £41.9m £140.3m £145.1m Cost % of gross private equity portfolio % of gross private equity portfolio % of gross private equity portfolio % of gross private equity portfolio £41.8m 4.3% 2.1% 5.0% 4.7% % of gross private equity portfolio Value Dec 2011 Value Dec 2011 Value Dec 2011 Value Dec 2011 4.6% £44.9m £21.6m £51.9m £48.8m Value Dec 2011 £47.7m SVG Capital plc Annual Report 2011 05 Overview

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12 13 14 15

11 12 13 14 15 Sisal All3Media Telepizza NDS Just Retirement Gaming TV production Take-away pizza Pay-TV solutions Financial services Fund Fund Fund Fund Fund Permira Europe III Permira Europe III Permira Europe III Permira IV Permira IV Cost Cost Cost Cost Cost £16.9m £14.0m £12.3m £7.7m £3.5m % of gross private equity portfolio % of gross private equity portfolio % of gross private equity portfolio % of gross private equity portfolio % of gross private equity portfolio 2.0% 1.9% 1.5% 1.1% 0.6% Value Dec 2011 Value Dec 2011 Value Dec 2011 Value Dec 2011 Value Dec 2011 £21.1m £19.8m £15.2m £11.4m £6.3m SVG Capital plc 06 Annual Report 2011 SVG Capital at a glance continued

Portfolio: Private equity funds of funds

Key features of the 12 months Dec 2011 Dec 2010 1. Total return of 19.1% over the year. Value £147.4m £123.7m 2. Substantial rebound in value of the Percentage of the investment portfolio 12.6% 9.9% private equity funds of funds portfolio as increases in underlying investment Focus: values have been amplified by the Investing in six diversified funds of funds, the majority of which are managed or advised leverage within many of the by SVG Advisers. fund structures. £m 123.7 5.0 (5.7) 24.4 147.4 3. The valuations of these holdings are 160

predominantly based on September 140 2011 underlying fund valuations, 120 adjusted for subsequent cash flows. 100

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0 Opening Calls Distributions Return Closing valuation paid received portfolio

Portfolio: Public equity funds

Key features of the 12 months Dec 2011 Dec 2010 1. Mixed performance – negative total Value £55.0m £49.4m return of 6.4% over the year. Percentage of the investment portfolio 4.7% 4.0% 2. Strong returns from strategic engagement funds offset by Focus: unconstrained funds’ exposure to Investing in five funds managed by SVG Investment Managers which invest in public European periphery economies markets using private equity techniques. and financials. £m 49.4 10.1 (0.7) (3.8) 55.0 60

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40

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0 Opening Calls Distributions Return Closing valuation paid received portfolio SVG Capital plc Annual Report 2011 07

Portfolio: Other investments Overview Key features of the 12 months Dec 2011 Dec 2010 1. Negative total return of 8.3% over Value £10.1m £10.2m the year. Percentage of the investment portfolio 0.9% 0.7% 2. Portfolio value loss driven by negative foreign exchange movements and Focus: a decline in the quoted investments. Holdings in two private equity funds focused on India.

£m 10.2 0.9 (1.0) 10.1 12

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0 Opening Calls Return Closing valuation paid portfolio SVG Capital plc 08 Annual Report 2011 Chairman’s statement

I am pleased to report another year of progress for SVG Capital.

I am pleased to report another year of progress for SVG Capital. We have laid the We have laid the foundations of the Company’s future strategy; and, against a backdrop of market foundations of the uncertainty and volatility, we are able to report a positive set of results. Our NAV per share (excluding the value of SVG Advisers and SVG Investment Managers) increased by 12.8% Company’s future to 337.1p over the year, which compares to a fall in the FTSE All-Share (TR) of 3.5% over the same period. This has been driven by continued strong performance from the underlying strategy; and, against Permira funds’ portfolio companies, which has outweighed the negative impact of lower a backdrop of market comparable earnings multiples over the year. Including the 13.1p unaudited Directors’ valuation for SVG Advisers and SVG Investment Managers our NAV per share at year end uncertainty and was 350.2p, a 10.9% increase. volatility, we are able At the end of 2011, following consultation with our shareholders, we set out our intentions with regards to the future strategy of the Company. Throughout the downturn our to report a positive over-riding priority has been to maintain a strong balance sheet. The actions taken by the set of results. management team over the last three years have significantly strengthened the balance sheet. Coupled with the growth in the asset value, this has resulted in net debt having fallen from 70.1%1 at the end of 2008 to 12.3% at December 2011. With the material distributions from the portfolio in the latter half of 2011, the Company’s liquidity position has improved significantly, which in turn has given us increased flexibility. The Board is clearly focused on improving shareholder returns. In the short term, we believe these can be maximised by returning capital to shareholders, and we propose to return up to £170 million through a series of market buy-backs and tender offers.

1 31 December 2008 SVG Capital plc Annual Report 2011 09

Looking to the longer term, while our relationship with Permira remains an important one, we propose to evolve from a concentrated, single manager investor to one that is more diversified, in order to achieve wider asset diversity and better flexibility in the management of the Company’s cash flows. We will therefore look to add to our Permira Overview portfolio through commitments to a limited number of other leading private equity funds. In time, we may also potentially make co-investments alongside funds. This proposed investment strategy will build upon SVG Capital’s heritage as an investor in management buyout funds and upon SVG Advisers’ core strengths of private equity fund selection. A Circular will be sent to shareholders in due course seeking approval at a general meeting for both the series of tender offers and for an amendment to our investment objective to allow for more diversification. In 2011 the private equity industry experienced a year of two halves: while investment activity and financing conditions improved in the first half, market volatility and increased risk aversion in the second half of the year has clouded the outlook, and hampered activity. Private equity managers are more cautious about near-term deal flow and disposals. However, we believe that our underlying portfolio of Permira investments are well-diversified, high quality companies with global reach and will continue to return value to our investors over time. SVG Capital remains fully committed to the asset class, and we believe the competitive dynamics will continue to improve and play to private equity strengths. We are mindful of the uncertain macroeconomic backdrop and the impact this may have on private equity activity in the near-term. That said, we are in a very different place to 24 months ago: corporate balance sheets are much healthier and most private equity backed companies are much stronger following the action taken by managers and their underlying management teams through the downturn. Listed private equity plays a pivotal role in providing access to the asset class for those investors who value and need liquidity. SVG Capital is a leading London-listed private equity investor underpinned by a strong balance sheet and armed with increased flexibility following another positive year. We believe that we are in a good position to capitalise on investment opportunities as they arise, and that our portfolio and future strategy for the Company can unlock and create value for our shareholders across business cycles.

Nicholas Ferguson Chairman 15 February 2012 SVG Capital plc 10 Annual Report 2011 Chief Executive’s statement

We believe that the medium to longer term investment environment plays to the strengths of the private equity model, especially in a capital constrained environment.

This has been another positive year for SVG Capital. We continue to see good performance As a strategic investor from the large majority of the underlying Permira portfolio companies, and despite the in the asset class, negative impact of market volatility on comparable earnings multiples during the year, we are able report a positive total return of 11.2% on the investment portfolio over SVG Capital is well the year. This has been driven by sustained earnings and revenue growth from the placed to take underlying portfolio companies, and strong performance from the quoted investments. In the latter part of the year, SVG Capital benefited from a number of significant advantage of these distributions from the portfolio, principally the partial realisation of Galaxy, the full realisation of Provimi and the refinancing of the P25 subordinated debt. Total distributions opportunities as in 2011 were £253.4 million, a two fold increase on 2010, and the Company ended the year with cash balances of £121.0 million and net debt as a percentage of Shareholders’ they arise. funds of 12.3%. The management team have continued their focus on balance sheet strength, both through the buy-back of Senior Notes and convertible bonds, and also in the extension of €100 million of the Company’s revolving credit facility until December 2015. All of these actions, combined with the continued improvement in the performance and value of our investment portfolio, have meant that it was apposite for the Board to look to the future investment strategy and in December we outlined a strategy focused on maximising both short and longer term shareholder returns. We have a strong belief in the quality of our underlying investment portfolio and Permira’s ability to realise value for investors. In the near-term, the Board is very much focused on improving returns through returning capital to shareholders via share buy-backs and tender offers. The first of the tender offers for £50 million is expected to take place next month. This tender offer will be priced at a discount of 10% to the December 2011 net asset value per share (excluding the value of SVG Advisers and SVG Investment Managers and rolled forward for movements in quoted holdings, finance costs, foreign exchange, realisations and fees). In addition to this, we have been using authorities granted at the 2011 AGM to buy-back shares in the market and since 20 December 2011 we have bought back 1.8 million shares at an average discount of 37% to the December 2010 net asset value of the Company (excluding the value of SVG Advisers and SVG Investment Managers). The timing of future returns will be dependent on distributions from the portfolio which will be supplemented by more active management of the assets of the Company through the sale of non-core assets. SVG Capital plc Annual Report 2011 11

Hugo Boss and Valentino Over the medium term, we expect the investment portfolio to evolve from its current Fashion Group concentrated strategy to one of a portfolio made up of a limited number of private equity managers and potentially, in time, co-investments alongside funds. This strategy will Hugo Boss and VFG was the largest value driver over the year and represents 25.0% of the gross private build upon SVG Advisers’ strong fund selection, monitoring and risk management skills Overview equity funds’ portfolio value at 31 December 2011. which will be augmented by the formation of an investment committee made up of Hugo Boss reported an increase in revenues and investment professionals and senior members of the SVG Advisers’ team. The investment earnings over the first nine months of 2011 of 20% and 36% respectively (in local currency terms), with committee will be responsible for allocating capital with the over-riding objective of all regions reporting double-digit sales growth, largely maximising value for shareholders. This may be by improving the capital structure driven by a solid wholesale order book and sales from through deleveraging, making new investments, or returning capital to shareholders new stores. Following the stronger than expected results, Hugo Boss raised its forecast for the year as a if the discount that the shares trade at remains relatively wide. whole, projecting an increase in sales of 15% to 17% (previously: at least 12%) and EBITDA of 25% to 30% SVG Advisers and SVG Investment Managers (previously: at least 15%). In addition, they increased their sales and earnings targets for 2015 to €3 billion The strong performance across the investment portfolios of the funds advised by (previously: €2.5 billion) and €750 million (previously: SVG Advisers in 2010 has continued into 2011. The funds managed or advised by €500 million) respectively. In Q4 2011, the Permira SVG Advisers continue to perform well, with most funds reporting both increases funds sold a small stake in the company (4.5 million preference shares), using the c.€300 million proceeds in NAV and positive portfolio returns at the latest reporting date. SVG Investment to deleverage the investment. Managers’ fund performance was mixed with the strategic funds delivering positive returns despite a sharp fall in smaller company valuations while the unconstrained mandates underperformed their respective indices. The SVG Advisers’ investment platform is a key source of intellectual capital for the Group. We have continued to invest in both the people and the infrastructure of the business in order to support longer term growth and we expect to see the benefits of this over the course of 2012 and 2013. The fundraising environment is challenging, however, we are beginning to see renewed interest in private equity funds of funds and expect to be fundraising with a new primary offering during the course of 2012. At 31 December 2011, the businesses had funds under management or advice of €3.7 billion. Total fee income was £31.8 million, compared to £30.7 million for 2010. Profits before tax for the year have increased by 8% to £8.4 million, driven by tight cost controls. The Directors have placed an unaudited valuation on the business of £40.4 million, a decline of 24.8% on the previous year. This decline has predominantly been driven by a fall in comparable earnings multiples. Outlook The Company has reported another year of good progress. The growth in the investment portfolio has continued to outperform public markets and as a management team we have reduced the interest costs of the business by approximately 17%. The profits from SVG Advisers continue to make a positive contribution to the Group, partially offsetting running costs and in September 2012 the management fees paid to our underlying managers will reduce by 46% to approximately £22.0 million p.a. For the 12 months to December 2011, the Permira IV companies that SVG Capital has an exposure to reported weighted average earnings growth of 40% and revenue growth of 32%, year-on-year1. Permira is still not seeing much evidence of a meaningful softness in earnings, however, we remain cautious on the outlook for the macroeconomic environment, which we believe will remain challenging in the near-term and may impact the timing of distributions from the portfolio. The significant deleveraging required across the western world will likely hamper growth for some time and the challenge for companies will be to maintain earnings momentum in a low growth environment. Looking at our underlying portfolio more than half of the companies are multinational, and the bulk of these have a significant and increasing percentage of revenues from higher growth economies. We believe that the medium to longer term investment environment plays to the strengths of the private equity model, especially in a capital constrained environment. As a strategic investor in the asset class, SVG Capital is well placed to take advantage of these opportunities as they arise.

Lynn Fordham Chief Executive 15 February 2012

1 Permira IVa companies only. Earnings and revenue growth across all of the Permira IV companies was 28% and 25% respectively SVG Capital plc 12 Annual Report 2011 Business review

The Business review provides shareholders with an overview of SVG Capital’s: The Group’s Financial Key Performance Indicators are: Investment objective and policy – page 12 Investment portfolio review – page 17 Key Performance Indicators – page 12 15 largest underlying companies – page 23 1 Shareholder total return Strategy – page 13 Fund management business – page 26 Marketplace – page 15 Contractual arrangements – page 26 (2.8%) Financial review – page 16 Risks and risk management – page 27 Year to 31 December 2011 Introduction 0.9% p.a. SVG Capital is an international private equity investor and fund management business Since listing in 1996 with offices in London, Boston and Singapore.

Net asset per share growth2 The Group invests from its own balance sheet as well as on behalf of third-party investors through funds that it manages and/or advises. At 31 December 2011, total assets and commitments under management and/or advice 12.8% 1 Year to 31 December 2011 were £4.1 billion, including £2.7 billion managed or advised on behalf of third-parties. 3.6% p.a. Investment objective Since listing in 1996 The Company’s investment objective is to achieve capital appreciation by investing principally in private equity funds that are managed or advised by Permira, a leading 1 Source Bloomberg international private equity specialist. 2 Excluding the 31 December 2011 Directors’ unaudited valuation of SVG Advisers and In addition, the Company invests in private equity funds that invest in Japan, SVG Investment Managers North America, Asia and the life sciences sector, and in unquoted and quoted businesses More information on non-financial KPIs are contained in the Corporate social responsibility through specialist funds and co-investments alongside these funds. The Company report on page 47. may also invest in other private equity related assets and alternative asset classes. To complement this investment objective and create capital and income for the Company, its fund management business structures, markets, manages and advises products for investment in private equity related asset classes and in public equity using private equity techniques. Investment policy The Company invests principally in private equity funds managed or advised by Permira, which provide it with exposure to a portfolio of companies that are diversified by vintage year, size, geography and industry sector. Under current legislation, the Company operates so as to ensure that, at the point of acquiring or adding to its investment in any company or group, its holding in that company or group does not exceed 15.0% by value of its overall investments. The Company has a desired average level of gearing of approximately 20.0% over time and has an absolute maximum limit on borrowings of two times its adjusted capital and reserves, as set out in the Articles of Association of the Company.

1 This figure excludes SVG Capital’s commitments/investments in SVG Advisers’ and SVG Investment Managers’ managed or advised funds management capabilities. risk and equity, structuring private its using advice bespoke with clients SVGA provides vehicles, investment equity toprivate access with clients toproviding addition In Investment and advisory solutions management. ongoing intheir and vehicles investment of construction and design into the isincorporated optimisation This financing. their with portfolios investment inoptimising experience extensive has function finance SVGA’s corporate risk. of level acceptable atan return attractive an todelivering iscritical management risk Effective funds. manager tosingle route access alternative an with investors provided have which vehicles feeder of anumber and obligation fund collateralised equity private first the structuring included has This constraints. or requirements investment specific investors’ toaddress products innovative of anumber structured has SVGA capabilities. finance corporate and bylegal iscomplemented offering SVGA’s investment management risk and Structuring portfolio. investment its on Board Capital SVG the opp equity private secondary and primary Asian and US,European on mainly focuses team investment The managers. of network global toa access discerning with clients providing relationships, extensive built and universe equity private the of knowledge deep havedeveloped professionals SVGA’s investment time Over selection. manager and allocation asset construction, inportfolio expertise and process SVGA’s investment through robust isdelivered This potential. performance high with funds equity private inselecting record track proven along, has SVGA Investment of complementary disciplines. range abroad across 45 over professionals employs It markets. equity private to major access ‘on ground’ the offering Singapore, and Boston inLondon, offices has SVGA equity. toprivate access tailored with investors providing funds, single manager 1 €3.7 billion of advice and management under commitments and funds has and investors international for solutions equity private delivering of record track astrong has SVGA class. asset equity private the toaccess ways innovative with investors in2001 toprovide established was It business. advisory and management fund equity private isaspecialist (SVGA) Limited Advisers SVG SVG Advisers techniques. using private equity and public equity equity inprivate investment for products advise and manage market, structure, Managers, Investment SVG and Advisers SVG businesses, management fund Capital’s SVG Building asuccessful fund management business 3. pages 17 page on and to22 on review portfolio investment inthe iscontained sector industry and geography year, byvintage size, assets underlying its of diversification the including portfolio, Company’s investment the on Information specialist. equity private an international manager, one on Permira, focused are Company’s investments the of majority The Diversification equity. private international ison focus Company’s core investment The Investing in international private equity international private in Investing At 31 December 2011 and including subsidiary undertakings subsidiary 2011 including 31 and At December Strategy 1 . It advises eight diversified private equity funds of funds and five five and funds of funds equity private diversified eight advises . It ortunities. In addition,ortunities. SVGA also advises Annual Report 2011 Report Annual SVG Capital plc

13 Business review SVG Capital plc 14 Annual Report 2011 Business review continued

SVG Investment Managers SVG Investment Managers (SVGIM) is a London based specialist fund manager, created with the objective of adopting private equity investment techniques and adapting them for use in the public markets. Established in 2002, SVGIM is one of Europe’s longest standing investors in this field. It has a proven track record of disciplined and responsible investing with assets under management of over £200.0 million1. SVGIM offers two investment strategies that follow the same distinctive investment process and are driven by a single research platform. These strategies are available to investors via specific funds and to certain types of investors as segregated mandates: Unconstrained mandates These mandates invest in the equity of publicly listed companies where private equity based research indicates they are undervalued and where SVGIM have identified a specific catalyst that should lead to an increase in shareholder value. These are focused portfolios typically made up of 25-35 holdings, offering full liquidity and transparency. Strategic mandates For the strategic mandates SVGIM employs a philosophy of constructive corporate engagement. These mandates invest in publicly listed companies where it has identified strategic, operational or management initiatives to create shareholder value. Having done so SVGIM aims to increase the value of these companies by working in partnership with management and other stakeholders. Strategic update Since 2009, SVG Capital’s management team has focused on strengthening the balance sheet through a proactive approach to managing both assets and liabilities which has included the sale of non-core assets, buy-backs of debt and equity and targeted investments around existing products. Over the same period the investment portfolio has delivered a total return of 57%2 as Permira and the underlying portfolio company management teams have worked to protect, improve and realise equity value for investors. SVG Capital now has a significantly strengthened balance sheet with increased flexibility and intends to take advantage of opportunities to enhance shareholder value. The Board remains focused on improving shareholder returns and will allocate capital with the over-riding objective of maximising value for shareholders. This may be by improving the capital structure through deleveraging, making new investments in private equity or returning capital to shareholders via on market share buy-backs and tender offers. In the short term, the Board believes that shareholder returns can be maximised by returning capital to shareholders and proposes to return up to £170 million, through a series of market buy-backs and tender offers, reflecting the Board’s commitment to shareholders in 2009 to offer a choice between reinvestment and a return of capital. Key to any further investment considerations will be an appropriate balance of risk and return, maintaining a conservative balance sheet and ensuring a strong alignment between investment and financing strategies. In order to achieve these objectives, flexibility in the management of SVG Capital’s cash flows is important. This flexibility is difficult to achieve through the current concentrated, single manager fund of funds investment strategy.

1 At 31 December 2011 2 Since 31 December 2008 opportunities for the asset class. class. asset the for opportunities and, additionally,financial headwinds t and economic tocounter the positioned better are companies these reduced, risks refinancing and stabilised structures capital up. With held has companies backed equity ofmany private however, companies, performance operating the portfolio unrealised of valuations tomarket mark on impact havean markets public inglobal falls The term. near inthe flow deal on macroeconomic environment, private managers equity are generally exercising caution current the of longevity and impact term long the tocall early low. itistoo remains While visibility forward and market, refinancing the impacting summer, the over directly down 2011, of half first abuoyant despite market, shut bond yield high The performance. operating strong with and size reasonable of assets for isavailable ‘some’that debt suggests managers equity private with dialogue and However, activity recent retrench. banks and market the from obligation’s disappear loan collateralised as specific deal and scarcer, expensive tobecome more islikely deals for credit of availability The assets. off byselling II, Solvency and III Basel as such pressures, regulatory and tofunding respond they as transactions of source amajor tobecome expected are institutions Financial cash. un-invested of amounts havelarge corporates many that fact the despite importance, strategic with businesses toacquire looking buyers trade of appetite the mayimpact environment economic uncertain the and 2 1 IPOs five and 154 sales the trade by43 increased disposals secondary – inEurope year the of half second the off in 2011, of quarter second tapered inthe highs downturn post activity but reached exits equity private Global halves. two of ayear experienced also industry equity private The mark financial global culminated infurther and economy world tothe Eurozone, risks the heightened across crisis debt sovereign escalating an USand the of downgrade credit the including shocks, macroeconomic of half, However, aseries second inthe prevailed. sentiment and conditions macroeconomic half, improving first the In halves. 2011 distinct two of ayear been has shortly. held will be managers equity private of number alimited toinclude toevolve portfolio allow the to objective investment the of abroadening and offers tender of aseries through capital of return proposed the for approval shareholder toseek meeting A general alongside funds. make co-investments potentially will intime and buyouts management on focused records track strong with managers equity private of other leading number byalimited managed tofunds commitments through portfolio its Permira on tobuild look will Capital SVG conditions. market on dependent class the asset across capital equity, allocating toprivate exposure point single balanced, a liquid, investors offering vehicle equity private into alisted toevolve proposes SVG Capital term, tolong However, medium inthe byPermira. managed tofunds committed ispredominantly portfolio investment Capital’s SVG future, immediate the For Centre for Management Buy-out Research (as featured in the Financial Times): ‘Private equity secondary deals deals secondary equity ‘Private Times): Financial the in (as featured Research Buy-out Management for Centre 2011 15 December Doldrums’, the in Exits Equity ‘Private release: press Preqin Marketplace hit landmark’, Daniel Schäfer, 2012 22 January 1 2 with secondary activity being the dominant exit route route exit dominant the being activity secondary with . For the time being, the IPO market remains volatile volatile remains market IPO the being, time the . For his prevailing environment might throw up his prevailingenvironment might up throw et volatility and increased uncertainty. uncertainty. andincreased et volatility % in2011 to exceeding 165 transactions, Annual Report 2011 Report Annual SVG Capital plc

15 Business review SVG Capital plc 16 Annual Report 2011 Business review continued

Financial review The Group’s NAV per share increased during the year by 12.8% from 298.9p to 337.1p. If you include the unaudited Directors’ valuation for SVG Advisers and SVG Investment Managers of 13.1p the NAV per share was 350.2p. The portfolio performance is analysed in more depth in the investment portfolio review. Cash balances and uncalled commitments The Company received significant cash inflows from investments in the second half of the year, notably from the part-realisation of Galaxy, the full realisation of Provimi, and the refinancing of P25’s subordinated debt. As a result, the Group’s short-term net liquidity position increased by £123.2 million, from a deficit of £2.2 million at the end of last year to a surplus of £121.0 million at 31 December 2011. The loan facility was undrawn, compared to £19.3 million drawn at the beginning of the year, and Group cash balances increased from £17.1 million to £121.0 million. The main cash outflows during the year included £38.0 million of Senior Note buy-backs, £14.3 million of convertible loan note buy-backs, £14.3 million of share purchases for the Employee Benefit Trust, £6.8 million of share buy-backs into treasury and finance costs of £35.0 million. Against this we had net investment cash inflows of £222.4 million. The positive cash position will be used in part to finance the proposed first tender offer which is expected to return £50.0 million to shareholders. It is the Company’s intention to maintain a strong balance sheet. Under current conditions, capital returns to shareholders will only take place if there are sufficient financial resources1 to cover 75% of outstanding fund commitments plus any debt falling due for repayment within 12 months. Once the Company has sufficient financial resources, it has committed to return a minimum of 50% of excess capital to shareholders, until it has returned Galaxy Entertainment £170.0 million. The Board will keep the free cash flow requirement under review as Galaxy Entertainment reported a total return of 71.3% conditions change. Under the Company’s current debt documentation, it is unable driven by the 62.0% increase in its share price over the year, following continued improvements in trading to distribute more than 10% of the Group’s gross assets to shareholders in any one and the successful opening of Galaxy Macau in May 12 month period. 2011, as well as the partial exit of 33.8% of the Permira funds’ holding in Galaxy Entertainment at HK$17.70 The Company made no new primary commitments during the period. Uncalled per share (31 December 2010: HK$8.78). The value of commitments fell from £209.8 million to £170.2 million, helped by the 3% appreciation this partial realisation for SVG Capital represents 70% of the original cost of the investment. SVG Capital’s of sterling against the euro. There was a €7.2 million (0.3%) call from Permira IV, reducing remaining investment in Galaxy Entertainment was the uncalled commitment to this fund from €108.3 million to €101.1 million, falling in valued at £120.2 million at 31 December 2011. sterling terms from £92.8 million to £84.5 million. In addition there was the disposal of CVC Europe V from the warehoused private equity fund portfolio, which released uncalled commitments of £11.3 million. On 15 July 2011 the Company’s uncalled commitment to Vintage I was reduced by €8.0 million. Borrowings Net borrowings fell by £173.9 million over the year from £301.7 million to £127.8 million, and net debt to Shareholders’ funds fell from 31.9% to 12.3%. At 31 December 2011, the Company’s Loan to Value ratio (LTV) for its senior borrowings was 13.4%. The fair value of the currency swap is netted off against senior debt for the purposes of the LTV calculations. The Company has extended €100.0 million of its revolving credit facility until December 2015. The remaining €150.0 million matures in January 2013. Foreign exchange The appreciation of sterling against the euro had a negative impact on portfolio gains, partly offset by a marginally stronger US dollar, decreasing the portfolio uplift by an estimated £21.2 million to an overall gain of £143.2 million2. The foreign exchange losses on senior borrowings were offset by gains on the related currency swap. Risks A description of the Group’s principal risks and uncertainties is included in the report and accounts. These include risks relating to valuation, leverage, funding, borrowing, concentration and portfolio company risk.

1 Cash plus the undrawn loan facility (excluding the facility which expires in 2013) 2 Including investment income 1 of of and revenue 32% 40% average growth year-on-year growth earnings weighted toreported exposure an has Capital SVG that companies portfolio Permira IV 12 2011, the For toDecember launches. months product new and the expansion geographic as such initiatives, of anumber todrive continued teams management as expansion bytop-line supported been has growth earnings Encouragingly, the of much year. the over by6.8% declining multiples earnings average weighted like-for-like with half second the over multiples earnings comparable weakening the of impact negative the momentum ac earnings strong 11.4% an reported year, the over the return as total portfolio funds’ equity private The portfolio. 78.4% investment and the of portfolio funds’ equity 95.9% private the of represent which byPermira advised byfunds isdominated portfolio funds’ equity private The (81.8% of the net investment portfolio) Private –£955.9 equity funds’ portfolio million companyearnings. portfolio of strengthening continued half, despite second the over 8.5% of return total anegative reported portfolio investment the context, this half. Within 67,062 first the over movements exchange foreign positive the of unwinding the and multiples leading and macroeconomic risks, instability 63,624 However,exchange. saw half second the foreign of impact positive 600,710 the and investments quoted the of strengthening an overall growth, earnings strong 21.3%, of from return atotal benefited valuations as reported 118,449 portfolio investment the half first the During 2011 halves. disparate two of ayear was multiples earnings comparable SVG Advisers outwei momentum morethan which earnings 11.2% of return atotal 2011, over reported portfolio bystrong investment driven The Advisers SVG Permira Manager/adviser Permira Diamond SVG P25 Permira Europe III IV Permira Fund 31 December 2011. at byvalue investments Company’s 10 fund the are largest below Listed over the year. the over holding residual the benefited ata101.6% 2010 addition, Entertainment December In tothe valuation. in Galaxy uplift holdings funds’ 33.8% of Permira the of disposed and price share arising of advantage 2011, year. the over September In Entertainment took Galaxy listed Permira Hong Kong in 71.3% investment the its from on return total benefited also value portfolio The itg iDb aaes26,072 21,454 Managers 3i Debt Managers Investment SVG II Fund Recovery Strategic I Vintage P1234 SVG 59,879 Advisers 13SGAvsr 32,581 27,576 34,313 SVG Advisers Permira Advisers SVG Permira Europe II P123 II Diamond SVG Permira IVa companies only. Earnings and revenue growth across all of the Permira IV companies companies IV Permira the of all across growth revenue and Earnings only. companies IVa Permira Large investments Investment review portfolio was 28% and 25% respectively was 28% and 25% from the share price increasing to increasing shareprice HK$14.22 the from HK$8.78 from ross the Permira funds’ portfolio companies outweighed outweighed companies portfolio funds’ Permira the ross used to value the portfolio. the tovalue used a significant increase in financial market market infinancial increase a significant to a contraction in to acontraction ghed the negative impact of contracting contracting of impact negative the ghed comparable earnings earnings comparable Annual Report 2011 Report Annual 1 . SVG Capital plc £000’s 2011

17 Business review SVG Capital plc 18 Annual Report 2011 Business review continued

Permira and the underlying management teams have continued to reduce portfolio companies’ net debt positions through targeted sales of non-core assets, partial disposals of quoted shares and free cash flow generation. Aggregate debt across the top 15 companies decreased by 9.1% over the year (in constant currencies) and at 31 December 2011, less than 10% of the Permira funds’ portfolio companies’ debt was due to expire before 2014. The portfolio’s five largest investments (Hugo Boss and VFG, Arysta LifeScience, Galaxy Entertainment, iglo Group and TDC) represent 67.3% of the gross private equity funds’ portfolio value, with the four largest companies reporting the largest valuation gains over the year. The top five portfolio companies are well diversified across industry and geography with a mixture of Permira IV and Permira Europe III and II assets.

Major unrealised portfolio movements Change in year1

Hugo Boss and VFG 260.9 +£96.1m 164.8

Galaxy Entertainment 120.2 70.5 +£79.4m 111.3

iglo Group 104.3 +£18.1m 86.2

Ayrsta LifeScience 148.3 +£15.1m 133.2

Freescale 48.8 (£14.6m) 63.4

ProSiebenSat 51.9 (£14.8m) 66.7 31 Dec 2011 £m2 31 Dec 2010 £m2 Distributions in 12 months 1 Including Permira feeder vehicles 2 Gross of any carried interest provision

Hugo Boss and VFG was the largest value driver over the year (+£96.1 million) and represents 25.0% of the gross private equity funds’ portfolio value at 31 December 2011. Hugo Boss reported an increase in revenues and earnings over the first nine months of 2011 of 20% and 36% respectively (in local currency terms), with all regions reporting double digit sales growth, largely driven by a solid wholesale order book and sales from new stores. Following the stronger than expected results, Hugo Boss raised its forecast for the year as a whole, projecting an increase in sales of 15% to 17% (previously: at least 12%) and EBITDA of 25% to 30% (previously: at least 15%). In addition, it increased its sales and earnings targets for 2015 to €3 billion (previously: €2.5 billion) and €750 million (previously: €500 million) respectively. Valentino also continues to report good trading. In Q4 2011, the Permira funds sold a small stake in the company (4.5 million preference shares), using the c.€300 million proceeds to deleverage the investment. Galaxy Entertainment delivered a £79.4 million gain driven by the 62.0% increase in its share price over the year, following continued improvements in trading and the successful opening of Galaxy Macau in May 2011, as well as the partial exit of 33.8% of the Permira funds’ holding in Galaxy Entertainment at HK$17.70 per share (31 December 2010: HK$8.78). iglo Group has maintained good trading momentum across all regions driven by successful new product launches and continuing international expansion while the integration of Findus Italy is progressing well. The valuation has increased by £18.1 million over the year and the company should be well placed to continue driving revenue growth through product innovation, continued international expansion and top-line synergies as a result of the Findus integration. deliver strong a strong deliver and margins todrive continuing while growth further tocapture business the enabled has process transformation This footprint. year, geographic last its in Mexico toenhance NASSA of acquisition the including markets, infast-growing acquisitions strategic made and activities Pet Foods and Feed Fish its as such assets non-core of disposed The company markets. inemerging presence astrong with organisation international integrated an into businesses individual of group adisparate from business the transformed has team Provimi’s management fund’s ownership the 2007 under and in April Provimi acquired year. IV the Permira during toCargill Provimi of realisation afull completed also IV Permira at£120.2 valued was 2011. at31 million December Entertainment inGalaxy investment remaining Capital’s SVG investment. the of cost original the 70% of represents SVG Capital for realisation partial 2010 31 this of tothe value December The price. uplift share sold IV Permira 33.8% holding in Entertainment in September of Galaxy its at a 101.6% at £1.7 million. 2011,At 31 valued was December business inthe investment remaining Capital’s SVG Belgium. and inHolland stores with retailer aDIY as totrade continues Maxeda the sale, inQ1 2011. formats fashion individual its of exit full Following the completed Maxeda in2009. structure capital the of restructuring aconsensual and performance in operating adecline following 2008 since atzero December held been had company. BorsodChem inthe stake funds’ Permira the toacquire option acall exercised in BorsodChem, 2011,In January Group, a Wanhua Industrial P25’s of refinancing debt. the and subordinated Provimi of realisation full the ofsale Maxeda’s th formats, fashion individual the BorsodChem, of exit tothe inrelation option acall of exercise the following year the over portfolio £247.0 of funds’ equity private Distributions the from received were million Realisations in foryear, revenues 2011. growth mid single-digit targeting full the for outlook positive their to2016. loans haveconfirmed term Management of its €2.1 billion approximately of maturity the extended and schedule of ahead loans term ProSiebenSat Benelux sold and its used assets the proceeds to pay back €1.2 billion of its innovation platform has also helped to transform Provimi into the global leader itistoday. leader global into the Provimi totransform helped also has platform innovation recurring EBITDA in Q3 with 2011 inallsegments, growth revenue earnings incomparable decline significant by£14.8 bya year, declined driven the over million valuation ProSiebenSat’s entirely year. the over by£14.6 declined has 29.7% million valuation Freescale’s price a subsequent inshare fall and IPO the 2014 down topay Following used in2020 was due which debt of maturities. US$750 raised million IPO, Freescale the after shortly Furthermore, business. the deleverage 2011, inMay IPO an completed to US$843 used was approximately which million raising year,the ma gross improving prog company further made has the this, Despite businesses. networking and industrial inthe weakness and uncertainties macroeconomic some revenue in Q3 and backlog softness and 2011, Q4 largely driven by global experienced Freescale industry, semiconductor inthe companies other with Consistent in has business ofthe The valuation Russia. and India of markets growth high inthe operate which acquisitions add-on two completed has company the addition, In America. inNorth conditions weather adverse and inMarch earthquake Japanese the of effects negative the offset business the across savings cost continued and levels volume higher as year the over growth gross valu private funds’ equity portfolio 14.2% company, the of representing portfolio largest second isthe LifeScience Arysta nnual revenue andE nnual revenue creasing 11.1%.creasing completion Following rgins and increasing design design rgins andincreasing creased by£15.1creased year. millionover the BITDA performance. Significant investment in its e. company The report multiples. The business continues to report toreport continues business The multiples. Chinese chemical firm and strategic investor investor andstrategic firm chemical Chinese e partial realisation of Galaxy Entertainment, Entertainment, ofGalaxy realisation e partial revenues increasing 6.2% year-on-year and and year-on-year 6.2% increasing revenues ress on several operating initiatives over over initiatives operating several on ress wins momentum. Freescale momentum.wins Freescale of a strategic review inH1 review 2011,of astrategic ed double-digit EBITDA EBITDA ed double-digit Annual Report 2011 Report Annual SVG Capital plc

19 Business review SVG Capital plc 20 Annual Report 2011 Business review continued

In 2009, SVG Capital invested €40.0 million in a subordinated loan note to P25 (a Permira feeder vehicle advised by SVG Advisers) which accrued an effective annual interest rate of 30%. In December 2011, P25 completed a refinancing in order to significantly reduce its finance costs which included the refinancing of SVG Capital’s subordinated loan note and SVG Capital received proceeds of £60.0 million. SVG Capital did not participate in the new financing structure but retains an equity commitment to the fund. At 31 December 2011, SVG Capital’s equity commitment to P25 was valued at £67.1 million. New investments and follow-ons Permira IV announced four portfolio company acquisitions and one follow-on investment during 2011. SVG Capital will participate in these investments indirectly through its holdings in the Permira feeder vehicles and the SVG Diamond programme. BakerCorp is the industry leader in providing liquid and solid containment, pump, filtration and trench shoring solutions. Permira IV is backing BakerCorp’s current management to accelerate revenue growth and expansion internationally, particularly in its European business, which represented 5% of revenues at acquisition having grown rapidly since its launch in 2007. Operating from five locations in Germany, France and the Netherlands, the European business has significant potential to further penetrate existing markets, expand into new geographic regions and extend its product set. SVG Capital’s share of this investment was approximately £3.2 million. On 30 June 2011, Permira IV made a follow-on investment to support the merger of eDreams and Go Voyages and the subsequent acquisition of Opodo. The companies operate a multi-channel marketplace that connects travel suppliers (airlines, hotels, car rental companies etc.) with end customers and other intermediaries such as travel agents. Together they form one of Europe’s leading online travel groups, with a presence in 27 countries and strong positions in all key European countries (France, Italy, Germany, Nordics, Spain and the UK). The value of the follow-on for SVG Capital was £1.1 million. Renaissance is a leading provider of technology-based school improvement and student assessment programs for pre-kindergarten through to senior high (pre-K-12) schools and districts. The company’s products and services, currently adopted by more than 70,000 schools, are primarily focused on two curriculum areas: reading and mathematics. The progress-monitoring and assessment tools provided by Renaissance enable teachers to make data-driven decisions to enhance core curriculum and tailor instruction for students at varying levels. SVG Capital’s share of this investment was approximately £1.7 million. Netafim is the pioneer and global leader in smart drip and micro irrigation solutions for sustainable agriculture and other applications. Netafim provides drip irrigation solutions for value crops in over 100 countries globally and is the clear market leader with c.30% share of the global market. In comparison to traditional flood irrigation or sprinklers, drip irrigation controls water flow so that crop yields can be increased by up to 50% whilst saving up to 40% in water consumption. As drip irrigation is only used in 6% of global irrigated arable land, the market offers substantial growth opportunities through penetrating existing markets but also in new crops and new regions. SVG Capital’s share of this investment was approximately £3.2 million. Genesys is a leading supplier of enterprise software and solutions that enable best-in-class customer service for companies and organisations. Genesys software provides products for call routing and handling which integrate with all major contact centre hardware vendors. Headquartered in California, USA, and with over 45 offices worldwide, Genesys software directs more than 100 million customer interactions every day for 4,000 companies and government agencies in 80 countries. With the backing of Permira IV, Genesys intends to enhance its core product portfolio and expand its offerings in the growing areas of customised customer service solutions. SVG Capital’s share of this investment, which completed in January 2012, was approximately £5.7 million. in the quoted investments. quoted in the adecline and movements exchange foreign bynegative driven year of 8.3% the over 2011,At 31 December at£10.1 valued were return funds total these anegative million, funds. equity private inIndian investments two upof made are investments Other (0.9% of the investment portfolio) Other investments – £10.1 million year. the over return at£55.0 total a6.4% million, valued negative 2011, At31 December were outperformance. of funds the quarters nine consecutive Strategic gains with Equity solid single-digit reported funds however, strategic financials, the and economies periphery to European exposure bytheir driven returns total 2011. negative delivered funds unconstrained The over performance mixed reported Managers Investment bySVG managed funds The (4.7% of the investment portfolio) Public – funds £55.0 equity million portfolio 2011 At31 at£147.4 December valued were structures. funds fund the the of million. haveyear, increases valuation underlying as a19.1% reported has portfolio the over funds of return total funds equity private The (12.6% of the investment portfolio) Private funds equity of – funds £147.4 portfolio million Other assets Year of original investment in companies underlying 9.3x 8.8x. was was median the and portfolio the 2011,At 31 tovalue used December multiple earnings discounted average weighted the year. by6.8%over the decreased multiples discounted basis, alike-for-like earnings On basis Valuation 31 December 2011 (£m) Portfolio maturity –investments in companies 2002 Up to 2003 2004 2005 2006 2007 2008 2009 2010 2011

Write-downs 0 0 0 0 500 400 300 200 100 0 Cost Quoted

Earnings Capital ending the year having delivered ending Capital year the having delivered been amplified by the leverage within many many within leverage bythe amplified been Earnings belowEarnings cost Third-party Annual Report 2011 Report Annual SVG Capital plc

21 Business review SVG Capital plc 22 Annual Report 2011 Business review continued

Fund commitments Amount Uncalled called commitment Uncalled (local currency) (local currency) commitment1 Permira funds Permira Europe III €352.4m €6.1m £5.1m Permira IV €1,343.3m €101.1m £84.4m P1234 €30.8m €7.7m £6.4m SVG Sapphire IV €11.5m €1.7m £1.4m Sapphire IV €1.5m €0.3m £0.3m £97.6m Other private equity funds The Japan Fund IV ¥4,601.5m ¥1,071.4m £9.1m SV Investments Fund I US$44.4m US$3.0m £1.9m SV Life Sciences Fund IV US$38.9m US$11.1m £7.1m American Capital Equity II US$7.6m US$2.4m £1.5m £19.6m Private equity fund of funds SVG Diamond III €47.2m €18.3m £15.3m SVG Asia Fund of Funds US$12.3m US$28.6m £18.4m Vintage I €11.2m €20.8m £17.4m Schroder Private Equity Fund of Funds III €0.9m €0.1m £0.1m £51.2m Other investments SVG India US$32.1m US$0.8m £0.5m Gaja Capital Fund US$3.1m US$2.0m £1.3m £1.8m Total £170.2m

1 Based on exchange rates at 31 December 2011 attributable to follow-ons into Permira IV companies is not subject to this provision. tothis isnotsubject companies IV into Permira tofollow-ons attributable Value distributions. future against aprovision include to2009 prior made investments IV the Permira of all of valuations the 2008, inDecember IV toPermira commitment its Company to cap bythe decision the Following IFRS. inaccordance with presented 2011. at31 byvalue, havebeen December companies portfolio, these of valuations The funds’ equity private the of 15 investments the weshow largest pages following the In 15 largest underlying companies 15 underlying largest geographic regions. top 15 cover arange of sectors and The companies that make up our Annual Report 2011 Report Annual SVG Capital plc

23 Business review SVG Capital plc 24 Annual Report 2011 Business review continued

1 Hugo Boss and Valentino Fashion Group 2 Arysta LifeScience 3 Galaxy Entertainment Headquarters: Germany and Italy Headquarters: Japan Headquarters: Greater China

Cost £m 205.5 Cost £m 151.5 Cost £m 43.5

Value £m 260.9 Value £m 148.3 Value £m 120.2 Date of acquisition May 2007 Date of acquisition February 2008 Date of acquisition November 2007 % of gross PE portfolio 25.0 % of gross PE portfolio 14.2 % of gross PE portfolio 11.5 % of Shareholders’ funds 25.1 % of Shareholders’ funds 14.3 % of Shareholders’ funds 11.6 Underlying fund Permira IV Underlying fund Permira IV Underlying fund Permira IV Hugo Boss and VFG operate in over 100 countries, Arysta LifeScience is the world’s largest privately Galaxy Entertainment Group is one of the largest with more than 1,600 single-brand boutiques and held agrochemical company. The company markets casino and hotel operators in Macau SAR, China. 430 directly-managed shops. The group’s activities are a portfolio of over 150 products in more than It is one of only six gaming concessionaires licensed broken down into three business units, covering the 125 countries worldwide and specialises in to operate casinos in Macau SAR, the only legal entire luxury and fashion sector: Hugo Boss, Valentino conventional crop protection products including gaming location in China and the world’s largest and licensed brands including Marlboro Classics and herbicides, insecticides, fungicides and growth gaming market by revenue. Galaxy operates Galaxy M Missoni. The valuation basis is earnings. regulators. The valuation basis is earnings. Macau, StarWorld, four ‘City Club’ casinos and owns a construction materials business. The valuation basis is quoted.

4 iglo Group 5 TDC 6 ProSiebenSat.1 Media Headquarters: UK Headquarters: Denmark Headquarters: Germany

Cost £m 49.0 Cost £m 40.8 Cost £m 140.3

Value £m 104.3 Value £m 69.1 Value £m 51.9 Date of acquisition November 2006 Date of acquisition December 2005 Date of acquisition March 2007 % of gross PE portfolio 10.0 % of gross PE portfolio 6.6 % of gross PE portfolio 5.0 % of Shareholders’ funds 10.0 % of Shareholders’ funds 6.7 % of Shareholders’ funds 5.0 Underlying fund Permira Europe III Underlying fund Permira Europe II & III Underlying fund Permira IV The iglo Group is a leader in the European frozen TDC is a leading Danish-based provider of The ProSiebenSat.1 Group is a leading European food market, operating mainly in the UK and Ireland communications solutions with approximately 12,700 media company. The Group’s core business is free under the ‘Birds Eye’ brand, in Germany and Austria employees, around 11.7 million customers and nearly TV, financed through advertising. Reaching more under the ‘iglo’ brand and in Italy under the ‘Findus’ nine million customer accounts in Denmark. It also has than 78 million households, the ProSiebenSat.1 brand. The company’s main products include fish, significant presence in markets in the other Nordic Group is the second largest broadcasting group vegetable, poultry and ready meals, in addition to countries. The valuation basis is quoted. in Europe. In Germany, its family of stations are iconic products such as fish fingers and Schlemmer number one in the TV advertising market. The Filets. The valuation basis is earnings. Group also has strong market positions in free TV in The Netherlands, in Hungary and in Sweden. ProSiebenSat.1 Media AG is a listed company and employs over 4,000 employees across Europe. The valuation basis is earnings.

7 Freescale 8 Acromas (AA Saga) 9 Legico Headquarters: USA Headquarters: UK Headquarters: Luxembourg

Cost £m 145.1 Cost £m 41.8 Cost £m 50.4

Value £m 48.8 Value £m 47.7 Value £m 44.9 Date of acquisition November 2006 Date of acquisition September 2004 Date of acquisition January 2008 % of gross PE portfolio 4.7 % of gross PE portfolio 4.6 % of gross PE portfolio 4.3 % of Shareholders’ funds 4.7 % of Shareholders’ funds 4.6 % of Shareholders’ funds 4.3 Underlying fund Permira IV Underlying fund Permira Europe III Underlying fund Permira IV Freescale is a global leader in the design and Acromas was formed in September 2007 by the Legico seeks to invest in credit market opportunities by manufacture of embedded semiconductors for merger financing of the AA and Saga, bringing investing in senior, mezzanine and PIK opportunities wireless, networking, automotive, consumer and together the two brands to create the UK’s leading in both the primary and secondary markets. The industrial markets. Based in Texas, Freescale has affinity organisation with 18 million customers, company’s main geographical focus is the UK and a broad portfolio of more than 14,000 products providing motoring, travel, media and financial Europe, although it does have the flexibility to invest serving over 10,000 customers. Freescale is services to the UK motorist and people aged over worldwide. The valuation basis is mark-to-market. headquartered in Austin, Texas with design, 50. The initial investment in the AA was made in research and development, manufacturing and September 2004. The valuation basis is earnings. sales operations in more than 20 countries. The company employs approximately 19,000 employees worldwide. The valuation basis is quoted. has about 430 outlets. The valuation basis is earnings. is basis valuation The 430 outlets. about has it where Poland and America Central Chile, Portugal, in presence international an has company The outlets. franchised and owned 650 about operating business pizza take-away and delivery Spanish home the in player leading the currently is Telepizza in the USA and Russia. The valuation basis is earnings. is basis valuation The Russia. and USA the in distribution direct with 130 over in countries and sells Russia and USA the Europe, in facilities production with innovation and design in record track strong a has It line. product afull and presence a global with tiles ceramic of distribution and manufacturing design, the in leader aworld is Group Marazzi 10 13 fSaeodr’fns1.5 Permira Europe III 1.5 Underlying fund September 2006 % of Shareholders’ funds portfolio PE gross % of Date of acquisition Value Cost Cost Headquarters: Spain Telepizza Cost Headquarters: Italy Marazzi neligfn Permira IV 2.1 2.1 July 2008 Underlying fund % of Shareholders’ funds portfolio PE gross % of Date of acquisition Value £m £m £m £m 15.2 21.6 12.3 41.9 The valuation basis is earnings. is basis The valuation people. 1,000 around employs and sales of points 38,000 about operates Milan, in is headquartered group The top-ups. card prepaid pay-TV and satellite phones mobile services, payment and machines slot betting, racing horse and sports (lotteries), games traditional activities: main four has group The worldwide. player lottery largest sixth the and sector gaming the in player largest second Italy’s is Sisal mobile TV markets. The valuation basis is earnings. is basis valuation The markets. mobile TV and IPTV cable, satellite, the for offers solutions relationship with leading pay-TV and operators standing along has It pay-TV. for applications interactive and technologies enabling security, content media of provider leading aworld is NDS 14 11 Value Cost Headquarters: UK NDS Value Cost Headquarters: Italy Sisal fSaeodr’fns2.0 Permira Europe III 2.0 2006 October Underlying fund funds Shareholders’ % of portfolio PE gross % of Date of acquisition neligfn Permira IV 1.1 1.1 2009 January Underlying fund % of Shareholders’ funds portfolio PE gross % of Date of acquisition £m £m £m £m 16.9 21.1 11.4 7.7 The Only Way is Essex. The valuation basis is earnings. is basis valuation The Essex. is Way Only The include Midsomer Hollyoaks, Murders, Shameless and programmes Key business. management a talent and company distribution international an agency, digital media producer, a generation next advertising a includes also group The Australia. and USA the Zealand, New Netherlands, The Germany, UK, the in business, comprising a group of production companies All3Media is the largest UK independent production TV The valuation basis is earnings. is basis valuation The enhanced release and annuities mortgages. equity retirement: in or at those to products provides two company The retirement. approaching in or clients to solutions financial provides business that services financial aspecialist is Retirement Just 15 12 Value fSaeodr’fns1.9 Permira Europe III 1.9 Underlying fund September 2006 % of Shareholders’ funds portfolio PE gross % of Date of acquisition Just RetirementJust neligfn Permira IV 0.6 0.6 Underlying fund November 2009 % of Shareholders’ funds portfolio PE gross % of Date of acquisition Cost Headquarters: UK Cost Cost Headquarters: UK All3Media Value £m £m £m £m Annual Report 2011 Report Annual SVG Capital plc 14.0 19.8 3.5 6.3

25 Business review SVG Capital plc 26 Annual Report 2011 Business review continued

Fund management businesses The strong performance across the investment portfolios of the funds advised by SVG Advisers in 2010 has continued in 2011. The funds managed or advised by SVG Advisers continue to perform well, with most funds reporting both increases in NAV and positive portfolio returns at the latest reporting date. SVG Investment Managers’ fund performance was mixed with the strategic funds delivering positive returns despite a sharp fall in smaller company valuations while the unconstrained mandates underperformed their respective indices. Business development was positive, with the open ended funds seeing an 88% increase in units in issue. Further details of the Company’s fund management businesses are contained in the Chief Executive’s statement on page 11. Contractual arrangements As was fully reported in a Circular to shareholders dated 24 March 2005, SVG Capital entered into arrangements with Permira which allowed SVG Capital full access to Permira IV and to its successor, Permira V. Concurrent with the arrangements, Permira subscribed for shares in the Company. The arrangements also included an operating agreement which imposes material limits on the extent to which the Group may have investments which are not in Permira funds or Permira products. These limits substantially prevent the Group from investing in private equity funds or products managed or advised by general partners or managers other than Permira during the term of the operating agreement. One of the principal undertakings made by SVG Capital is that the Company will operate with the intention that no more than 20% of the gross assets and uncalled commitments of the Group will be in non-Permira funds or products (subject to certain limited exceptions) at the time of commitment and subject to a maximum of 25%. The effect of the operating agreement therefore is to increase the Group’s reliance on Permira and increase its concentration risk. Subject to earlier termination, the operating agreement will terminate on the date on which the first closing of Permira V occurs if none of SVG Capital, any other member of the Group or any SVG product makes any commitment to Permira V or, if SVG Capital, any other member of the Group or any SVG product does so, the date of final closing of that fund. There can be no assurance as to when Permira V will be raised. If the first closing of Permira V has not occurred by 30 June 2012, the Company and Permira Holdings are each able to terminate the operating agreement by giving written notice. A copy of the Circular to shareholders is available on the Company’s website: www.svgcapital.com.

1 At 31 December 2011 and including subsidiary undertakings since been considered as increasing. as considered since been and economic developments. This risk was in as assessed 2011, early stable but has political market, of monitoring toongoing inaddition uncertainty, tosuch reacting are companies the that toverify Permira with companies portfolio of performance the discussing bycontinually risk this Company mitigates The companies. in portfolio change toaffect ability no has and funds equity inprivate investor apassive generally Company is The Shares. Ordinary its of value and price Company and the trading bythe earned returns the affect will Company’s subsidiaries and the companies portfolio on uncertainty such of Company. impact the to impact the particular, In potential the has uncertainty economic and political market, current continuing The Current market and economic uncertainty follows: as tobe considered are risks Company. principal These the on impact haveamaterial and tooccur likely most those as identified have been risks principal The meeting. board each of business the of part as risk considers Board the addition, In statement. governance corporate inthe out isset system, monitoring its and control internal of system Directors’ the of details Further possible. as far risks as these tomitigate Directors the toenable asystem toprovide and risks those monitor to isdesigned which control internal of framework arobust adopted has and business its affect which identified havebeen that key risks of amatrix prepared has Board The Company. the of control of achange of event inthe agreement the toterminate Permira allows agreement This Permira. with 21 2005 dated March agreement (d) operating the redemption. for datefixed to the interest with bonds price) conversion their Company the todecreased redeem orrequire (at a rights conversion their toexercise intention their of notice maygive bondholder each notice, of such giving the of days calendar 60 Within control. of any change of 14 calendar days within holders bond and trustee tothe notice give shall Company the 2016. of agreement, amaturity this with Company Under bythe issued bonds converted £120.0 the (as cent per constituting Limited trustee) 8.25 million Trustee Company (UK) Corporate HSBC and Company the between 2008 5June dated deed (c) trust the rejected. tohavebeen deemed be shall offer the a noteholder, by isreceived response no If offer. prepayment the reject toaccept or days has 30 noteholder Each prepayment. date of tothe interest noteholder, byeach with held notes of amount principal unpaid entire the toprepay offering control, of the change of noteholders all notify topromptly required be would Company the agreements, 2007. 2August and 18 these dated 2008 Under July agreements (b) purchase note the commitment. its cancel and facility the toitunder outstanding amount Failinamendment isrequired. any whether and available facility tomake the continue shall lenders the whether todetermine days 60 of period anegotiation open would notification Such control. of any change of banks, the for agent as capacity inits plc, Bank TSB Lloyds notify promptly to required be would Company the agreement, this Under 10dated 2006. March Branch London AG, Bank Unicredit and plc Scotland of Bank Royal The plc, Bank TSB Company, the Lloyds between made agreement facility revolving (a) multicurrency the bid: atakeover following Company the of control of achange on terminate or alter effect, take that agreements 2011, at31 following As December tothe party was Company the Risks and riskRisks management g agreement, any lendermay g agreement, require repayment of the repayment ofthe require Annual Report 2011 Report Annual SVG Capital plc

27 Business review SVG Capital plc 28 Annual Report 2011 Business review continued

Borrowing and funding risk There is a risk that the Company may not be able to pay its unfunded commitments. At 31 December 2011, the Group had uncalled commitments of £170.2 million (2010: £209.8 million), compared to Shareholders’ funds of £1,038.7 million (2010: £945.7 million), including cash balances of £121.0 million (2010: £17.1 million). In addition, the Company has the ability to draw a further €250.0 million (€302.5 million) from its loan facility. During the year, the Company agreed with its bankers to amend its facility agreement. The total facility available is €250 million. Of this, €150 million is available until 17 January 2013 and €100 million is available until 31 December 2015. At 31 December 2011, the Company had £162.0 million of unsecured Senior Notes in issue, after repurchasing 18% of the Senior Notes during the year. The Senior Notes are repayable between 2013 and 2015. In addition the Company has £90.9 million of subordinated convertible loan notes in issue, repayable in 2016. The revolving credit facility and the Senior Notes each contain financial covenants. The consequences for the Company of breaching such covenants would be serious. The lenders under the revolving credit facility would no longer be required to advance amounts available under the revolving credit facility and amounts outstanding under the revolving credit facility and the Senior Notes may become immediately due and payable by the Company. In such circumstances, the Company may become obliged to sell its assets on unfavourable terms to repay its debts, thereby reducing the returns which shareholders may otherwise have earned. Any such default may also trigger a cross- default under other existing financing arrangements. The Group’s revolving credit facility and the Senior Notes may mature before the investments in underlying portfolio companies are realised. In that case, the Group will be required to seek a refinancing. There can be no assurance that the Group will be able to obtain new finance on competitive terms or at all and therefore it may suffer a loss as a result of having to dispose of investments at a price which does not reflect the full value of the asset which may be achieved upon its maturity. A failure to obtain new finance could result in a member of the Group defaulting on its obligations which could have a material adverse effect on the Group. Part of the revolving credit facility is currently available until January 2013 with the balance available until December 2015. The convertible loan notes mature in 2016 and the Senior Notes are due in 2013, 2014 and 2015. Any reduction in the net asset value attributable to shareholders and the share price will be amplified by balance sheet gearing. The Board considers cash flow forecasts at each Board meeting and expects to meet a substantial portion of its uncalled commitments, as well as commitments to future funds, from distributions received from its investments and from borrowings available to the Group. The Directors keep the Group’s gearing under review and impose restrictions on borrowings to mitigate this risk. The Company is in ongoing contact with its lenders and it may seek to renegotiate with lenders, dispose of assets or raise capital to mitigate this risk. This risk has been assessed as decreasing due to the reduction in the amount of debt on the balance sheet. movements affecting the value of its balance sheet. This risk has been assessed as stable. as assessed been has risk This sheet. balance its of value the affecting movements currency foreign against hedge totime time mayfrom Group The Board. by the basis aregular on ismonitored risk Currency rates. exchange inforeign by movements affected significantly be can value sterling their and currency inforeign denominated are liabilities and assets its of majority since the directly risk tocurrency isexposed Group The Currency risk funds. alongside make co-investments mayalso Company the time, In funds. equity private leading other of number toalimited commitments through portfolio Permira our on tobuild look will and diversified, ismore that to one investor manager single aconcentrated, from byevolving flows, cash the Company’s of management inthe flexibility better and diversity asset wider toachieve Objective Investment 2011, toits December In amendment aproposed announced Company the by Permira. advised or managed funds through 15 held All are companies portfolio. private equity 95% gross represent the of company holdings underlying Company’s largest The stable. as assessed been has risk This Shares. Ordinary the of price trading and value the Company and the of performance the on effect adverse mayhavean atPermira partners or professionals key investment several or one of departure the Therefore, byPermira. professionals experienced and skilled equally with replaced be can key individuals that assurance no be can there and guaranteed isnot individuals these of service continued The personnel. its and Permira of experience and skills the upon extent toasignificant depends funds Permira of performance The stable. as assessed been has risk This weinvest. inwhich funds Permira the of ofThe performance the Group will therefore be largely dependent on the performance by Permira. advised or managed are that funds equity inprivate principally investments its focuses currently Group the objective, investment stated its with inaccordance that, noted in and theinvestments buy-out development capital However, markets. it should be making with associated normally risks the reduces portfolio fund equity Group’s private inthe investments underlying the natureof diversified the that believe Directors The Concentration risk the additional disclosures contained in note 30. innote 30. contained disclosures the additional with inconjunction considered be to101.pages 91 therefore should risks above The on accounts the innote30of isincluded Group’s the on risks information Further stable. as assessed been has risk This staff. Group of members byongoingcommunic ismitigated risk This Permira. and Group the between contact of level the Company byreducing the impact might Permira with relationship inthe deterioration Any Group’s Permira. on reliance isto the increase Permira with agreement operating ofthe effect above, the disclosed As Contractual arrangements ation and regular meetings by different bydifferent meetings andregular ation Annual Report 2011 Report Annual SVG Capital plc

29 Business review SVG Capital plc 30 Annual Report 2011 List of investments (Group) at 31 December 2011

SVG Capital’s Value of holding in SVG Capital’s Year Original life the fund holding % of total formed (years) % £’000 investments Europe Permira Europe I The first US$1 billion fund raised for private equity investment in Europe focusing on large and medium-sized leveraged buy-out opportunities. 1997 10* 13.5 1,333 0.1 Permira Europe II Focused on European buy-outs/ins, in addition to growth capital investments. 2000 10* 15.2 27,576 2.4 Permira Europe III Focused on buy-outs/ins and growth capital investments in European businesses or of global businesses with a strong European presence. 2003 10 7.2 118,449 10.1 Permira IV Focused on buy-outs/ins and growth capital investments in businesses which have or intend to have significant activities in Europe. The fund may invest up to 30% of its committed capital in businesses which do not have or intend to have significant activities in Europe. 2006 10 22.2** 600,710 51.4 P123 A fund of Permira buy-out funds, with interests in Permira Europe I, II and III. 2003 15 24.8 32,581 2.8 P1234 A fund of Permira buy-out funds, with interests in P123 and Permira IV. 2006 15 42.8 59,879 5.1 P25 A fund of Permira buy-out funds, with interests in Permira Europe III and Permira IV. – limited partnership interest 2006 15 47.7 67,062 5.7 Sapphire IV A feeder fund that invests solely in Permira IV. 2006 15 0.5 934 0.1 SVG Sapphire IV A feeder fund that invests solely in Permira IV. 2006 15 32.3 7,036 0.6 Permira Italy II 1993 10* 21.0 774 0.1 Permira UK Venture IV 1995 10* 4.2 233 – Total Europe 916,567 78.4

SVG Capital’s Value of holding in SVG Capital’s Year Original life the fund holding % of total formed (years) % £’000 investments Asia Asia Pacific Fund II 1994 10* 14.0 801 0.1 Schroder Ventures Asia Pacific Fund 1999 10* 29.9 1,561 0.1 The Japan Fund IV 2004 10* 27.2 5,077 0.5 Total Asia 7,439 0.7

* The lives of these funds have been extended ** Interest in existing portfolio companies as at the date of the Permira IV reorganisation in 2008 SVG Diamond Private Equity III Equity Private Diamond SVG taei eoeyFn I–c-netet2,5 1.8 21,454 0.1 679 SVG India funds Total equity public Fund European SVG Fund Focus UK SVG –co-investment II Fund Recovery Strategic Strategic Equity Capital funds: Public equity funds of funds equity Total private Funds of Fund Asia SVG III Funds of Fund Equity Private Schroder Vintage I Notes) (F II Holdings Diamond SVG America Total North Fund Investments SV I IV Fund Sciences Life SV III Fund Sciences Life SV * The life of this fund has been extended been has fund this of life * The statements 17 financial note in the of shown are funds 10 largest the for values Comparative fund. the in interest † Direct Total assets net liabilities total less assets Other Total portfolio investment investments Total other Gaja Fund SVG Diamond Holdings II Notes) (F Holdings Diamond SVG SVG Diamond Holdings funds: of funds equity Private portfolio fund equity Total private II Equity Capital American I Fund SV Investments Co-investments with Schroder Canadian Funds Buy-Out III and Schroder Canadian Fund Buy-Out III America North formed 001 6635– 355 26.6 10 2000 061 . 9311.7 19,311 9.0 10 2006 021 . ,1 0.4 5,011 3.8 10 2002 071 . ,2 0.2 2,529 1.7 10 2007 99 01. ,6 0.4 4,467 19.4 10 1999* Year Year Original life life Original (years) SVG Capital’s holding in the fund % † SVG Capital’s 1,038,833 ,6,1 100.0 1,168,511 (129,678) 5,3 81.8 955,932 4,3 12.7 147,438 4464.7 54,436 6022.2 26,072 5054.7 55,035 9502.5 29,510 0190.9 10,109 1962.7 31,926 0160.8 10,106 1301.0 11,320 2121.0 12,152 6161.4 16,116 Value of holding holding ,3 0.6 6,634 ,0 0.4 4,803 ,7 0.7 8,379 ,2 0.1 1,727 ,8 0.8 9,188 £’000 5 – 253 Annual Report 2011 Report Annual SVG Capital plc investments % of total total % of

31 Business review SVG Capital plc 32 Annual Report 2011 Board of Directors

1 234

1 Nicholas Ferguson Chairman Nicholas Ferguson was appointed as a Director on 12 February 1996 and Chairman on 25 April 2005. He was formerly Chairman of Schroder Ventures and instrumental in its development since 1984. He is Deputy Chairman of British Sky Broadcasting Group Plc. Committees: Nominations (Chairman)

2 Lynn Fordham Chief Executive Lynn Fordham was appointed as a Director on 1 July 2008. She is the Company’s Chief Executive Officer. She has over 20 years of financial experience and has worked in a number of companies including Mobil Oil, BAA plc, Boots Group plc and MAN Group plc. She is chairwoman of SVG Advisers. On 18 January 2011, Lynn joined Fuller, Smith and Turner P.L.C. as a non-executive director. Committees: Nominations

3 Francis Finlay Non-Executive Director Francis Finlay was appointed as a Director on 1 October 2004. His other non-executive directorships of investment companies include the London listed investment trust, Scottish Investment Trust plc, as well as Blakeney Investors, Boyer Allan Holdings Limited and Old Mutual (US) Holdings Inc. Committees: Remuneration (Chairman) Nominations

4 Caroline Goodall Non-Executive Director Caroline Goodall was appointed as a Director of the Company on 4 October 2010. She is currently a consultant to international law firm Herbert Smith, where she was a partner and held a number of senior management positions. Caroline is an independent non-executive of accountancy firm Grant Thornton UK LLP. She is also a non-executive director and trustee of the Woodland Trust and has sat as a non-executive on the Governing Body of Newnham College, Cambridge. Committees: Remuneration Nominations SVG Capital plc Annual Report 2011 33

5 678

5 Edgar Koning Non-Executive Director Edgar Koning was appointed as a Director on 12 February 1996 and is Executive Vice President with AEGON Nederland NV. He joined the AEGON Group in 1981 and has held various senior management positions in the AEGON Group. Committees: Nominations

6 Denis Raeburn Non-Executive Director Denis Raeburn was appointed as a Director on 25 June 2001 and was Managing Director of the asset management company Global Asset Management (GAM) between 1986 and 1999. information Corporate Committees: Audit Remuneration Nominations

7 Charles Sinclair Non-Executive Director Charles Sinclair was appointed as a Director on 1 January 2005. He is Chairman of Associated British Foods plc. He retired as Chief Executive of Daily Mail and General Trust plc on 30 September 2008, a post he held since 1989. Committees: Audit Nominations

8 Andrew Sykes Non-Executive Director Andrew Sykes was appointed as a Director on 8 February 2010. He is deputy chairman of Smith & Williamson Holdings Limited, chairman of Invista Foundation Property Trust Limited and Absolute Return Trust Limited. He is also a non-executive director of SVG Advisers Limited, Record plc, Gulf International Bank (UK) Limited and MBIA UK Insurance Limited. Committees: Audit (Chairman) Nominations SVG Capital plc 34 Annual Report 2011 Report of the Directors for the year ended 31 December 2011

The Directors submit their report and the audited accounts of the Company for the year ended 31 December 2011. Company’s business The Company is an investment company within the meaning of Section 833 of the Companies Act 2006. In order to obtain exemption from capital gains tax, the Company has conducted itself with a view to being an approved investment trust for the purposes of Section 1158 of the United Kingdom Corporation Tax Act 2010. The last accounting period for which the Company has been treated as approved by HM Revenue & Customs as meeting the qualifying criteria for investment trust status is the year ended 31 December 2010 and the Company has subsequently conducted its affairs so as to enable it to continue to qualify for such approval. The Company is not a close company for taxation purposes. A review of the Company’s business and its likely future development is given in the Chairman’s statement on pages 8 and 9, the Chief Executive’s report on pages 10 and 11 and the Business review on pages 12 to 29. The Business review, Corporate Governance review and Corporate Social Responsibility review are to be treated as part of the Report of the Directors. Revenue and earnings The Company’s investment objective is one of capital growth and it is anticipated that returns for shareholders will derive primarily from capital. No final dividend is recommended for the year ended 31 December 2011 (2010: no dividend). The consolidated revenue loss for the year attributable to equity shareholders was £33,038,000 (2010: loss of £28,045,000). The Company’s revenue loss for the year was £32,116,000 (2010: loss of £30,086,000). The consolidated capital gain for the year attributable to equity shareholders was £140,985,000 (2010: gain of £354,942,000). The Company’s capital gain for the year was £140,684,000 (2010: gain of £345,701,000). Taking capital returns into account, the consolidated profit for the year attributable to equity shareholders was £107,947,000 (2010: profit of £326,897,000). The Company’s profit for the year was £108,568,000 (2010: profit of £324,615,000). Dividend The Company is prohibited by its Articles of Association from distributing as dividends any capital surpluses that arise from the realisation of investments. Accordingly, any dividends paid by the Company will be funded out of its revenue account. Policy for payment of creditors It is the policy of the Company to settle all investment transactions in accordance with the terms and conditions of the relevant markets in which it operates. All other expenses are paid on a timely basis in the ordinary course of business. The Company had no trade creditors at 31 December 2011 (2010: nil). Purchase of shares At the AGM held on 31 March 2011, the Company was authorised to purchase up to 46,570,147 shares (representing 14.99% of share capital in issue on 18 February 2011). The Directors have relied on this authority to make market purchases of shares during the year to take advantage of weakness in the share price. In the period from 23 September to 31 December 2011, the Company bought 3,357,910 shares of 100p each (representing 1.08% of the Company’s issued shares) at an average price of 201.2p per share and at a total cost of £6,754,583 (plus commission and stamp duty). All these shares are currently held in treasury though may be cancelled. Since year end up until 14 February 2012, the Company has bought a further 1,441,000 shares at an average price of 217.1p per share which are also held in treasury though may be cancelled. Annual General Meeting The AGM will be held at 11.30 am on 23 March 2012 at 61 Aldwych, London WC2B 4AE. Details of the resolutions to be proposed at the AGM, together with explanations, appear in the Notice of AGM on page 102. Directors In accordance with the Company’s Articles of Association and the Company’s policy on tenure outlined on page 45, Nicholas Ferguson, Edgar Koning, Denis Raeburn, Lynn Fordham and Charles Sinclair will retire at the Annual General Meeting and, being eligible, offer themselves for re-election. The Board recommends that you support the re-elections of Nicholas Ferguson, Edgar Koning, Denis Raeburn, Lynn Fordham and Charles Sinclair who continue to demonstrate commitment to their roles and provide valuable contributions to the deliberations of the Board and its Committees. Edgar Koning and Denis Raeburn have each served as non-executive Directors of the Company for more than nine years. Edgar Koning is an employee of AEGON, a large shareholder in the Company. Andrew Sykes is a non-executive director of the Company’s subsidiary, SVG Advisers Limited. The Board considered the independence of each of these directors given that they are each presumed not to be independent under the Corporate Governance Code, taking into consideration the assessment of each director's contribution to the Board undertaken as part of the Board effectiveness review. The Board agreed that each of Mr Koning, Mr Raeburn and Mr Sykes continues to be an effective member of the Board and their different backgrounds and experience added to the Board’s effectiveness. The Board agreed that they each continue to be independent. Biographical details of all current Directors may be found on pages 32 and 33. SVG Capital plc Annual Report 2011 35

The Directors of the Company and their beneficial and family interests in the Company’s share capital as at 31 December 2011 are given below:

Ordinary shares of £1.00 each At At 31 December 1 January 2011 2011 Beneficial Nicholas Ferguson 879,618 879,618 Francis Finlay 250,000 250,000 Lynn Fordham 119,523 68,000 Caroline Goodall Nil N/A Edgar Koning 80,000 80,000 Denis Raeburn 328,332 328,332 Charles Sinclair 110,124 110,124 Andrew Sykes 21,000 21,000 Non-beneficial Nicholas Ferguson 204,937 204,937

Nicholas Ferguson has options over ordinary shares, details of which are given on page 42. Denis Raeburn holds £800,000 convertible loan notes due 2016 and Charles Sinclair holds £100,000 convertible loan notes due 2016. Nicholas Ferguson and members of his family have an interest in the carried interest in respect of certain private equity funds. Nicholas Ferguson has foregone a portion of his entitlement to carried interest on existing private equity funds and any entitlement he may have to carried interest on Permira or Schroder Ventures’ funds launched after 2001 in return for share options granted by the Company under the Executive Share Option Plan. Nicholas Ferguson received no further options following his retirement as Chief Executive Officer in April 2005. Nicholas Ferguson also participates in the Schroder Ventures Co-Investment Scheme and has a non-beneficial interest in Schroder Ventures Investments Limited. He has received no new carried interest allocations and made no new commitments since he joined SVG Capital plc in 2001. Lynn Fordham has a service contract with SVG Advisers Limited (“SVGA”). Andrew Sykes is a non-executive director of SVGA. No other Director has any material interest in any other contract that is significant to the Company’s business.

Auditors information Corporate The Company is required to appoint auditors for each financial year of the Company, to hold office until the conclusion of the next general meeting at which accounts are presented. Ernst & Young LLP have expressed their willingness to remain in office and resolutions to re-appoint them and to authorise the Directors to determine their remuneration will be proposed at the Annual General Meeting. The Auditor provides non-audit services to the Group, including tax and regulatory services. The Audit Committee has adopted a policy on the engagement of the Auditor to supply non-audit services to the Group. Certain non-audit services are not permitted. Certain types of non-audit services, including any non-audit service with a fee of greater than the lower of £50,000 or 25% of the most recent annual audit fee for the Group, must be referred to the Audit Committee for pre-approval. Certain types of non-audit services (such as tax compliance services) need not be referred to the Audit Committee. The Audit Committee considers whether any engagement of the auditor for non-audit services will impair objectivity and independence and seeks written confirmation from the Auditor on its policies and procedures for maintaining independence. It is not considered that the independence of the Auditor has been prejudiced by the provision of non-audit services during 2011. The total amount of fees paid to the Auditor with respect to the provision of non-audit services was £130,000 in 2011. Terms of Reference of the Audit Committee may be found on the Company’s website, www.svgcapital.com. Provision of information to auditors As far as the Directors are aware, there is no relevant audit information of which the Auditor is unaware and they have taken all steps they should have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information. Statement of Directors’ responsibilities The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable United Kingdom law and those International Financial Reporting Standards (“IFRS”) as adopted by the European Union. Under company law the Directors must not approve the Group financial statements unless they are satisfied that they present fairly the financial position of the Group and the financial performance and cash flows of the Group for that period. In preparing those financial statements, the directors are required to: – select suitable accounting policies in accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently; – present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; SVG Capital plc 36 Annual Report 2011 Report of the Directors continued

– provide additional disclosures when compliance with the specific requirement in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group’s financial position and financial performance; – make judgements and estimates that are reasonable and prudent; and – state that the Group has complied with IFRS, subject to any material departures disclosed and explained in the financial statements. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the Group financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Each of the Directors, whose names and functions are set out in this report, confirms that, to the best of their knowledge: – the accounts, which have been prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and net return of the Group; and – the Report of the Directors includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces. Substantial share interests As at 14 February 2012, the Company had 310,407,923 shares of £1 in issue. 4,798,910 shares were held in treasury. The total number of voting rights as at 14 February 2012 was 305,609,013 (excluding shares held in treasury). As at 14 February 2012, the Company has received notifications in accordance with the FSA’s Disclosure and Transparency Rule 5.1.2 R of the following interests in 3% or more of the voting rights attaching to the Company’s issued share capital: Voting rights attached to shares Number of Percentage ordinary of total shares voting rights Coller Investment Management Limited 62,000,000 20.29 AEGON Investment Management BV 55,293,749 18.09 Schroders plc and its subsidiaries: – non-beneficial, managed for clients 19,582,700 6.41 – beneficial 10,670,173 3.49 Legal & General Group Plc 15,388,932 5.04 Permira Capital Limited 12,000,000 3.93 Aviva plc 11,610,507 3.80

Rights attaching to shares The Company has one class of shares, namely ordinary shares, with standard rights as to voting, dividends and payment on winding-up and no special rights and obligations attaching to them. There are no material restrictions on transfers of shares. Other than as disclosed above, the Company is not aware of any person who has a significant direct or indirect holding of securities in the Company. There are no restrictions on voting rights. The Company is not aware of any agreements between holders of securities that may result in restrictions on the transfer of securities or on voting rights. The Company has no rules about the amendment of the Company’s articles of association. By order of the Board

Stuart Ballard Company Secretary 15 February 2012 Registered Number: 3066856 Registered Office: 61 Aldwych, London WC2B 4AE SVG Capital plc Annual Report 2011 37 Remuneration report for the year ended 31 December 2011

Introduction This report provides details of the remuneration paid to the Directors for the year ended 31 December 2011 and describes the Remuneration Committee’s policy on the remuneration of the Directors for the coming year. This report has been prepared in accordance with the Companies Act 2006, Schedule 8 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 and the Listing Rules of the Financial Services Authority. The report is divided into two parts. Part A, which is not subject to audit, describes the Remuneration Committee’s policy on the remuneration of Directors for the coming year. Part B, which is audited, contains tables detailing the Directors’ emoluments for the year ended 31 December 2011, their accrued pensions and their interests under the Companies’ long-term incentive arrangements. A resolution to approve this report will be put to shareholders at the Company’s Annual General Meeting in March 2012. Part A – Unaudited section The Remuneration Committee (the “Committee”) The Committee’s members during the year were Francis Finlay (Chairman), Denis Raeburn and Caroline Goodall, who were all considered by the Board to be independent non-executive Directors. Ms Goodall joined the Committee on 11 February 2011. The biographies of the current members are provided on pages 32 and 33. The Chairman and selected executives, including the Chief Executive, and the Committee’s advisers are invited to attend as appropriate. None of the executives invited to attend during the year participated in discussions or decisions regarding their remuneration. The Committee is responsible for determining the remuneration policy throughout the SVG Group (including making a recommendation to the Board on the remuneration of the Chairman) and the operation of the Company’s Executive Share Incentive Plans. Its terms of reference take into account the provisions of the Corporate Governance Code. The Committee is able to consider corporate performance on environmental, social and governance issues when setting remuneration of executive directors. As a financial services firm, the environmental and social impact of the Company’s activities is low. Governance issues, including effective engagement with shareholders and the general partners of the funds the Company invests in, is considered in evaluating the CEO’s performance and therefore impacts the performance-related portion of her remuneration package. The Committee has appointed independent remuneration consultants, New Bridge Street (a trading name of Aon Corporation), to advise it. New Bridge Street also provides advice on the operation of the Company’s share schemes. Work included providing updates on governance and tax developments and providing benchmark and market information. Neither New Bridge Street nor any other part of Aon Corporation provided other services to the Company during the year. The Committee meets at least twice a year and during the year under review it met formally twice, in February to agree remuneration proposals and in December 2011 for an update meeting. Mr Finlay and Mr Raeburn attended both meetings. The February meeting Corporate information Corporate took place prior to Ms Goodall joining the Committee. Ms Goodall was unable to attend the December meeting due to a conflict with a meeting of a sub-committee of the Nominations Committee. Ms Goodall received the relevant papers and was briefed by the Company Secretary following the meeting. In addition, the subcommittee of the Remuneration Committee, comprising the Chairman of the Committee and the Company Secretary, met in February 2011 to effect a proposal for the granting of awards under the Performance Share Plan (“PSP”). During the year the Committee: – Determined the aggregate bonus awards for the years to 31 December 2010. – Approved the granting of awards under the PSP. – Approved all remuneration packages for any Group executive with a proposed total cash remuneration in excess of £250,000 per annum. Both SVGA and SVGIM have separate Boards with independent directors and separate remuneration committees. The SVG Capital Remuneration Committee sets parameters and principles for the salary increases, discretionary bonuses and long-term incentive plans for these subsidiaries which are consistent with effective risk management. Accordingly, the subsidiary remuneration committees, operating under specified delegated limits of authority from the main Board, met during the year to determine increases in salary and discretionary bonuses for all executives below main Board level. A summary of these were presented to the SVG Capital Remuneration Committee for its approval. A summary of the terms of reference of the Committee are set out on page 47. A copy of the full terms of reference of the Committee is available on the Company’s website, www.svgcapital.com. SVG Capital plc 38 Annual Report 2011 Remuneration report continued

Policy on the remuneration of executive Directors The Committee’s aim is to ensure that remuneration packages should attract, retain and motivate senior executives (including executive Directors) while avoiding paying more than is necessary for this purpose and not encouraging excessive risk taking or rewarding failure. At 31 December 2011, Lynn Fordham was the only executive Director of the Company. The Committee’s policy is that the fixed elements of remuneration should be sufficient to allow the Company to be competitive against other companies with which the Company competes for executive talent. The majority of the remuneration package should be performance-related so that it is linked to the returns created for shareholders and the total cost is sufficiently flexible to reflect changes in business performance. The variable element comprises a balance between short-term and long-term performance through the Company’s annual bonus and the performance share plan. In order to help mitigate risk and ensure that overall rewards are not excessive, incentive levels are capped at a level that encourages out-performance and allows the Company to deliver competitive levels of remuneration without encouraging undue risk taking. The Committee considers performance on a multi-year basis and in the event of exceptional circumstances of misstatement or misconduct, an appropriate reduction will be made to a following year’s bonus. This, coupled with the 200% cap on bonuses and an appropriate weighting to the long-term performance share plan, means the Committee is satisfied that it has sufficient flexibility within the current arrangements to enable it to adjust future bonus payouts for exceptional circumstances and that executives are not incentivised to take undue risks. The Committee continues to keep its policy under review in light of market and corporate governance developments and will review the policy in light of BIS’s review of executive remuneration. Basic salary Salaries are reviewed annually with changes becoming effective in April each year. The Committee decides on the increases awarded to the executive Directors and is consulted on increases for all employees of the business. The Committee considers Group performance, individual performance and pay and employment conditions of employees of the Group in reaching any decisions. The Committee considers the pay awards and other employment conditions of employees of the Group before approving the pay packages of any executive Directors. In addition, relevant compensation surveys are reviewed but as a guide only. No executive Director of the Company is involved in deciding his or her own remuneration. Lynn Fordham’s salary was not increased in April 2011 and stayed at £350,000 per annum. The Committee has approved an increase of 5% to Lynn Fordham’s salary effective 1 April 2012 bringing her salary to £367,500. The Committee considers this increase is appropriate and reflects the CEO’s performance, role and responsibility as well as the performance of the Company. The increase is consistent with increases given to other members of staff this year and follows salary increases of 2.9% in 2010 and 0% in 2011 to Lynn Fordham. Annual bonus Annual bonuses are intended to reward achievement of Group and personal objectives. Bonuses are non-pensionable and discretionary. The Committee sets the performance targets for the annual bonus plan at the beginning of the financial year. The targets are chosen to reflect the successful implementation of the business plan and strategies agreed by the Board and may be adjusted to take account of risk. The normal maximum annual bonus for an executive Director has been set at 200% of salary, although this cap can be exceeded in exceptional circumstances. The Committee believes that capping bonuses at this level enables the Company to provide competitive levels of remuneration while ensuring that executives are not incentivised to take inappropriate risks. The bonus awarded to Lynn Fordham in respect of her performance in the year to December 2011 amounted to £560,000 being 160% of her 2011 salary. Mrs Fordham will buy shares in the Company with the after-tax proceeds of £70,000 of her bonus. Mrs Fordham has made similar purchases in prior years. This bonus is between on target bonus and maximum bonus and compares to a bonus of £455,000 (130% of 2010 salary) paid in 2011. The key performance parameters for Lynn Fordham for 2011 included increasing the strength of the balance sheet, developing the Company’s long-term strategy and widening shareholder relationships. SVG Capital plc Annual Report 2011 39

The Chairman met with Lynn Fordham to assess her performance in 2011. In each case, Lynn Fordham had met or exceeded her goals. In particular, it was noted that: – the strategic plan for shareholders was completed; – net debt was reduced by 60% enabling completion of the strategic plan; – the Company’s €40 million sub-debt investment in P25 had been realised at a multiple of 1.78x in just over 2.5 years. This investment had been initiated and led by Lynn Fordham; – the very successful widening of the shareholder relationships. It was also noted that over the period, the Company’s net asset value had grown by 12.8% versus a fall of 3.5% in the FTSE All Share (TR) Index. The overall bonus earned was ahead of the 2010 level reflecting the Committee’s assessment that the targets were fully met and that Lynn Fordham had performed very well during the year. It was noted that Lynn Fordham’s salary and bonus continued to be below the comparator median, reflecting the Company’s bias to long-term incentive remuneration. Long-term incentives Lynn Fordham and selected employees of the SVG Group are eligible to participate in the Performance Share Plan (“PSP”) at the discretion of the Remuneration Committee. The Committee believes that participation in long-term incentives ensures that a significant part of executives’ potential remuneration is tied to the returns received by shareholders over the longer term through the use of performance conditions linked to the Group’s strategy and through exposure to the Group’s share price. This provides alignment between executives and shareholders and, because vesting of awards takes place three or four years after grant, provides an element of lock-in and encourages a focus on performance that is sustainable in the longer term and potentially protects against misstatement or misconduct during the vesting period. PSP awards are made annually, as this enables executives to build up a series of overlapping awards, which the Committee believes is more retentive than larger one-off awards. The PSP enables awards of conditional free shares (or nil or nominal cost options) to be made. Award levels are determined by reference to the individual’s seniority, level of salary and bonus earned in the previous year (as this provides a link to individual performance). The maximum that can be awarded in any financial year is 200% of base salary and bonus. For the purposes of calculating these limits the maximum amount of bonus which may be used is capped at 300% of base salary and the value of an award shall be calculated and, if necessary, adjusted to take into account any employer’s secondary National Insurance contributions (or overseas equivalent) that may have been transferred to the award holder. In practice, the cap on the amount of bonus that may be included in the calculation of awards is unlikely to be reached as the normal maximum annual bonus of 200% of salary can only be exceeded in exceptional circumstances. The maximum bonus as a percentage of salary that was information Corporate paid in 2011 was 130%. The maximum award as a percentage of base salary and bonus in 2011 was 175%. In order to ensure that long-term incentives provide alignment with shareholders, the Committee sets performance conditions that reward executives for delivering absolute growth in the value of the Group. The performance conditions used for the 2011 awards were the same as those for the 2010 awards and consist of (i) the average growth in the Company’s undiluted Net Asset Value per Share (“NAV”) over a four-year period of 7% per annum (0% of the award vests) and 15% per annum (100% of the award vests) and (ii) the Company’s average annual compound total shareholder return (“TSR”) over a three-year period of 10% per annum (0% of the award vests) and 20% per annum (100% of the award vests), with each determining the vesting of 50% of the award. In 2011, Lynn Fordham was awarded 563,500 shares under the PSP. The face value of this award represented 175% of Lynn Fordham’s 2010 base salary and bonus paid in 2011. The Committee has approved an LTIP award with a face value of £1,592,500 (and expected value of £637,000 as estimated by New Bridge Street) representing 175% of Lynn Fordham’s 2011 salary and bonus to be paid in 2012. NAV-based awards will normally vest on the fourth anniversary of the award being granted provided that the award holder is a director or employee within the SVG Group on that date and to the extent that the NAV performance condition has been satisfied. If average annual growth in NAV over the performance period is less than 7% per annum, none of this part of the award will vest. If average annual growth in NAV over the performance period is 15% per annum or more, all of this part of the award will vest. For NAV growth between these two points, between 0% and 100% of this part of the award will vest on a pro-rata basis. SVG Capital plc 40 Annual Report 2011 Remuneration report continued

TSR based awards will normally vest on the third anniversary of the award being granted provided that the award holder is a director or employee within the SVG Group on that date and to the extent that the TSR performance condition has been satisfied. If average annual compound TSR over the performance period is less than 10% per annum, none of this part of the award will vest. If average annual compound TSR over the performance period is 20% per annum or more, all of this part of the award will vest. For TSR performance that is between these two points between 0% and 100% of this part of the award will vest on a pro-rata basis. The Remuneration Committee believes that TSR and growth in NAV are appropriate measures of long-term performance for a business focused on delivering superior levels of NAV growth and returns to shareholders. In setting the performance targets for the 2011 awards the Remuneration Committee took account of the current shareholder expectations of future performance for the Company. The PSP replaced the 2001 ESOP following the 2007 AGM. No further grants can be made under the 2001 ESOP. In addition, the Company introduced a SIP at the 2007 AGM. The SIP is a tax approved all-employee share plan with standard features. No awards have been made under the SIP. Benefits Benefits in kind (which are not pensionable) relate to the provision of health insurance and life assurance cover. Private health insurance is offered to all employees who have the option to cover their partners and dependent children. In addition, all employees are entitled to a contribution to their pension plans. External appointments The Company permits executive Directors of the Company to accept limited non-executive directorships and other similar appointments, it being recognised that such appointments increase their commercial knowledge and business experience to the general benefit of the Company. Fees earned from such directorships may be retained by the executive Directors. Lynn Fordham joined the Board of Fuller, Smith and Turner P.L.C. as a non-executive director on 18 January 2011 and received fees of £48,333.47 in respect of this appointment. Such fees were retained by Mrs Fordham. Executive Director service contracts Lynn Fordham’s contract provides for six months’ notice for termination and SVG Advisers Limited may terminate her employment by paying a sum in lieu of notice calculated by reference to her salary and other benefits.

Date of last Notice period issued contract (months) Lynn Fordham 13 November 2009 6

Policy on the remuneration of non-executive Directors Remuneration paid to non-executive Directors is determined by the Board and reviewed each year. When considering remuneration levels, the Board will consider, amongst other things, industry practice and contribution to various committees and time spent on the business of the Company. Fees payable to non-executive directors have not been increased in the past five years. A base fee is paid and supplemental fees are also paid for attendance at Board meetings and contributions to committees. SVG Capital plc Annual Report 2011 41

Appointment, re-appointment and re-election of non-executive Directors All Directors are appointed for an initial term of three years, subject to election or re-election at the Annual General Meeting. Thereafter Directors retire by rotation at least every three years. The Company will introduce annual re-election for each director when he or she is next due for re-election. Further details on re-election are on page 45. Subject to the evaluation of performance carried out each year, the Board agrees whether it is appropriate for that Director to seek an additional term. When recommending whether an individual Director should seek re-election, the Board will take into account the provisions of the UK Corporate Governance Code. Non-executive Directors are appointed under letters of appointment and do not have service contracts. The letters of appointment are available for inspection at the Company’s registered office during normal business hours. Performance graph The TSR for the five years to 31 December 2011 is shown in the graph below. This graph looks at the value, by the end of 2011, of £100 invested in SVG Capital on 31 December 2006 compared with the value of £100 invested in the FTSE All-Share Index. The other points plotted are the values at intermediate financial year ends. For this purpose, the Committee has decided that the FTSE All-Share Total Return Index is the most appropriate available broad market index for comparative purposes because it is the principal index in which the Company’s shares are quoted.

Total shareholder return

140

120

100

80

60

40

20

0 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 31-Dec information Corporate 2006 2007 2008 2009 2010 2011

SVG Capital FTSE All-Share Index Source: Datastream SVG Capital plc 42 Annual Report 2011 Remuneration report continued

Part B – audited Directors’ remuneration The emoluments of the Directors in respect of the year ended 31 December 2011 were as specified below:

Total Total emoluments emoluments Year to Year to Salary Annual Other 31 December 31 December and fee Benefits bonus§ compensation 2011 2010 £’000 £’000 £’000 £’000 £’000 £’000 Nicholas Ferguson 200 – – – 200 200 Lynn Fordham 348 62* 560 – 970 865 Francis Finlay 44 – – – 44 42 Caroline Goodall 38 – – – 38 9 Edgar Koning 31 – – – 31 31 Denis Raeburn 44 – – – 44 49 Charles Sinclair 44 – – – 44 44 Andrew Sykes 68** – – – 68 36 Gary Steinberg (resigned 12 January 2010) – – – – 1 Aggregate emoluments 817 62 560 – 1,439 1,277

* The Company is liable to attribute an amount equal to 30% of Lynn Fordham’s basic annual salary to her personal pension plan, subject to a notional salary cap equal to £200,000. For the year ended 31 December 2011 the Company made a total contribution of £50,000 to Lynn Fordham’s personal pension plan and paid the balance of £10,000 by way of a non-bonusable cash allowance ** Andrew Sykes received £15,000 for acting as a non-executive director of SVG Advisers Limited (“SVGA”) and received £8,686 for acting as the Company’s observer on the advisory committee to SVGA in respect of SVG Diamond Holdings Limited § Bonuses include provision for amounts accrued but not paid in each year. Annual bonuses are awarded in respect of calendar years Details of the Directors’ interests in shares are shown on page 35. Pension and other arrangements No defined benefit pension arrangements are in place for any of the Directors. There are no agreements between the Company and its directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid. Awards Under the Company’s Executive Share Incentive Plans Options held by Directors over ordinary shares of the Company under the 2001 ESOP The following Directors have been granted options over ordinary shares under the Executive Share Option Plan.

During the year Exercise dates† At At 31 December Options Options Options 31 December Exercise price 2010 granted exercised lapsed 2011 (pence) Earliest Latest Nicholas Ferguson* 404,484 – – – 404,484 334.50 5 April 2005§ 4 April 2012 349,840–––349,840 392.75 13 March 2006§ 12 March 2013 363,256–––363,256 479.00 12 March 2007§ 11 March 2014 250,704–––250,704 564.00 23 March 2008§ 22 March 2015 Total 1,368,284–––1,368,284

* Options granted to Nicholas Ferguson were made at a time prior to his appointment as Chairman † Options are exercisable subject to the satisfaction of performance conditions (see below) § Performance conditions have been met The performance targets have been met in respect of all the options listed above. All options under the 2001 ESOP were granted for nil consideration at the prevailing market price around the time of grant. SVG Capital plc Annual Report 2011 43

Awards held by Directors over ordinary shares of the Company During the year Vesting dates At At Exercise price 31 December Awards Awards Awards 31 December per share 2010 granted vested lapsed 2011 (pence) Earliest Latest L Fordham* 99,999* – – – 99,999 0.00 25 September 2012 25 September 2018 412,044** – – – 412,044 0.00 13 October 2012 13 October 2019 412,044** – – – 412,044 0.00 13 October 2013 13 October 2019 384,446** – – 384,446 0.00 15 April 2013 15 April 2020 384,446** – – 384,446 0.00 15 April 2014 15 April 2020 281,750** – – 281,750 0.00 17 Februar y 2014 17 Februar y 2021 281,750** – – 281,750 0.00 17 Februar y 2013 17 Februar y 2021 Total 1,692,979 563,500 – – 2,256,479

* Awards made before 2009 will vest and become exercisable subject to the satisfaction of an NAV performance condition requiring the average annual growth in SVG’s NAV over four years to be between 10% per annum (25% of the award vests) and 18% per annum (100% vests). Of the 99,999 shares awarded to Lynn Fordham in 2008, awards over 83,478 shares were made under the PSP and the remaining 16,521 shares were awarded under a one-off agreement under Listing Rule 9.4.2R(2). The details of this award were fully disclosed in the 2008 Annual Report and Accounts. The one-off award was granted on substantially the same terms as the 2008 PSP award and is subject to the same NAV growth performance conditions ** The awards granted in 2009, 2010 and 2011 were split equally between awards based on NAV growth and awards based on TSR (details summarised in the section headed ‘Long-Term Incentives’ above) The price of an ordinary share on 25 September 2008, when awards were granted to Lynn Fordham under the PSP and one-off agreement, was 579.0p. The price of an ordinary share on 13 October 2009, when awards were granted to Lynn Fordham under the PSP, was 126.2p. The price of an ordinary share on 15 April 2010, when awards were granted to Lynn Fordham under the PSP, was 170.7p. The price of an ordinary share on 17 February 2011, when awards were granted to Lynn Fordham under the PSP, was 250.5p. The mid-market price of shares at 31 December 2011 was 205.0p and the range for the year was 165.1p to 279.8p. External advisers will confirm the performance criteria calculations for the Committee, which will be measured on a consistent basis. Share Plan Dilution Limits The Company has established an employee benefit trust to enable it to subscribe for or purchase shares in the market to satisfy awards and options made to employees under the PSP and the 2001 ESOP. During the year, the employee benefit trust bought 5,766,318 information Corporate shares at an average price of 246.9p. The total number of shares held by the employee benefit trust is 8,891,318 at a total cost of £19,234,738.63 (excluding commission and stamp duty) (representing 2.91% of the Company’s issued share capital excluding treasury shares as at 14 February 2012). The maximum number of shares that the Company may require to satisfy awards (assuming that all awards vest fully and are exercised) is 12,059,757 shares. The Board will continue to regularly review the benefit of using the trust to make market purchases. The Board may use new issue shares or shares held in treasury (if any) to satisfy grants. In any ten calendar year period the Company may not issue (or grant rights to issue) more than 10% of the issued ordinary share capital of the Company under the PSP, the 2001 ESOP and any other employees’ share scheme adopted by the Company. As at 31 December 2011, the total number of shares issued or issuable under awards and options made under the PSP and the 2001 ESOP in the last ten calendar years was equal to 4.0% of the issued ordinary share capital on that date excluding treasury shares. On behalf of the Board

Francis Finlay Chairman, Remuneration Committee 15 February 2012 SVG Capital plc 44 Annual Report 2011 Corporate governance

The Board is committed to high standards of corporate governance and has implemented a framework for corporate governance which it considers to be appropriate for the Company. This framework is reviewed on an annual basis as part of the performance evaluation process and will be reviewed in light of any changes to the Company’s strategy. The Corporate Governance Code (the “Code”), published in June 2010 by the Financial Reporting Council (“FRC”), applies to disclosures in this statement. The Code is available to download from www.frc.org.uk. Compliance Statement The UK Listing Authority requires all listed companies to disclose how they have complied with the provisions of the Code. This Corporate governance statement, together with the Statement of Directors’ responsibilities on page 35 and Going concern set out on page 48, indicates how the Company has complied with the principles of good governance of the Code and its requirements on internal control. The Board considers that the Company has, throughout the year under review, complied with the best practice provisions of the Code other than the requirement that all directors be subject to annual election, which the Company proposes to phase in, as more fully explained on page 45 under ‘Tenure’. Role of the Chairman The Chairman is responsible for leading the Board, ensuring its effectiveness in all aspects of its role and setting its agenda. Role of the Board The Board determines and monitors the Company’s investment objectives and policy, decides on individual fund investments and considers the future strategic direction of the Company. The Board is responsible for presenting a balanced and understandable assessment of the Company’s position and, where appropriate, future prospects in annual and half-yearly reports and other forms of public reporting. It monitors and reviews the shareholder base of the Company, marketing and shareholder communication strategies, and evaluates the performance of all service providers, with input from its Committees where appropriate. The business of the Company is managed by the Board which may exercise all the powers of the Company including those powers relating to the issuing or buying back of shares. Further details of the authorities to be sought at the AGM with respect to issuing or buying back shares can be found on pages 104 to 106. A procedure for Directors, in the furtherance of their duties, to take independent professional advice at the expense of the Company has been agreed. Composition and independence At 31 December 2011, there was one executive and seven non-executive Directors, including the Chairman. Profiles of each of the Directors, including length of service, may be found on pages 32 and 33. The Board considers each of Francis Finlay, Caroline Goodall and Charles Sinclair to be independent. Edgar Koning and Denis Raeburn have each served as non-executive Directors of the Company for more than nine years. Edgar Koning is an employee of AEGON, a large shareholder in the Company. Andrew Sykes is a non-executive director of the Company’s subsidiary, SVG Advisers Limited. The Board considered the independence of each of these directors given that they are each presumed not to be independent under the Corporate Governance Code, taking into consideration the assessment of each director’s contribution to the Board undertaken as part of the Board effectiveness review. The Board agreed that each of Mr Koning, Mr Raeburn and Mr Sykes continues to be an effective member of the Board and their different backgrounds and experience added to the Board’s effectiveness. The Board agreed that they each continue to be independent. A review of Board composition and balance, including succession planning for appointments to the Board, is included as part of the annual performance evaluation of the Board, details of which may be found below. The Board is satisfied that it is of sufficient size, with an appropriate balance of skills and experience, and that no individual or group of individuals is or has been in a position to dominate decision making. Senior Independent Director Charles Sinclair was appointed Senior Independent Director on 4 March 2009. The Senior Independent Director is available to shareholders if they have concerns that cannot be resolved through discussion with the Chairman. Company Secretary The Directors have access to the advice and services of the Company Secretary, who is responsible to the Board, inter alia, for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. SVG Capital plc Annual Report 2011 45

Tenure The Directors have adopted a policy on tenure that they consider appropriate for the Company as a self-managed investment trust. The Board does not believe that length of service, by itself, impacts on independence. The independence of non-executive Directors will continue to be assessed on a case-by-case basis. While the Code recommends that all directors be subject to annual re-election at the Annual General Meeting, the Directors believe that it is appropriate to introduce annual re-election on a phased basis. The Company will introduce annual re-election for each director when he or she is next due for re-election. This year, five of the eight directors will be subject to ongoing annual re-election. At the AGM in 2013, two of the remaining three directors will be subject to ongoing annual re-election, with the final director due for ongoing annual re-election at the AGM in 2014. Any non-executive Director who has served for more than nine years will be subject to annual re-election at the Annual General Meeting. Otherwise, Directors retire by rotation at least every three years. This policy will continue to be kept under review. The Company’s articles provide that in addition to any power of removal conferred by the Companies Act 2006, the Company may by special resolution remove any director. The Company may by ordinary resolution elect a director. Induction and training When a Director is appointed he or she receives a full, formal and tailored induction. This includes a detailed briefing from the Company Secretary on the running of the Board covering such matters as terms of reference and calendar of events. In addition meetings are arranged with various members of management to facilitate a better understanding of the business. Changes affecting Directors’ responsibilities are advised to the Board as they arise. Advisers to the Company also prepare reports for the Board from time to time. In addition, Directors may attend ad hoc seminars covering issues and developments relevant to the Company. The suitability and adequancy of training that is made available to Directors is assessed as part of the performance evaluation process. It was assessed as adequate in the most recent evaluation. Performance evaluation The Board performance evaluation at the end of 2010 identified the importance of reviewing the development of strategy and continuing scrutiny of the composition of the Board and various committees. 2011 has seen a significant amount of time spent by the Board on development of the Company’s strategy, culminating in the strategy update announcement on 20 December 2011 and the upcoming general meeting to consider a change of investment policy and return of capital. The composition of the Board and various committees was kept under review and Caroline Goodall was appointed to the Remuneration Committee in early 2011. Further changes were not thought appropriate during 2011. In 2011, the Board has again adopted a formal and rigorous annual evaluation of its own performance and that of its Committees and individual Directors. This year, the evaluation process was completed in December 2011 and the results reviewed by the Board in early 2012. The process was led by Caroline Goodall, one of the Company’s independent non-executive Directors. Corporate information Corporate The process involved compiling a discussion guide which covered designated topics, with a particular focus this year on the development of strategy, corporate governance and risk management. In addition, senior members of management completed a separate form of discussion guide providing feedback on the operation of the Board. Caroline Goodall and the Company Secretary undertook a confidential, unattributable interview with each Director based on the discussion guide. Following the meetings, Caroline Goodall produced a written report which was discussed with the Chairman, before being sent to Board members and discussed at the following Board meeting. Among the main themes highlighted by this year’s evaluation was the importance of reviewing the composition of the Board and the Board committees in light of the new strategy which has been proposed to shareholders. In addition, a number of practical suggestions were made to improve information flows, thereby improving risk management and governance. A list of action points to deal with these suggestions is being implemented under the direction of the Chairman. Overall the evaluation process confirmed that the Board and its principal committees had functioned efficiently during the year and that each Director continued to contribute to his or her role effectively and with proper commitment, including of time. The evaluation process specifically addressed diversity, including gender, within the Board. The Board was in agreement that it had an appropriate level of diversity, but that this should be kept under review in light of any new strategy agreed by shareholders. The Board has considered carefully whether the evaluation of its performance should be externally facilitated at least once every three years and intends to arrange such an external facilitation at the end of 2012. SVG Capital plc 46 Annual Report 2011 Corporate governance continued

Meetings The Board held six scheduled meetings during 2011 including one, full day, strategy event and one unscheduled meeting. Attendance at the Board and Committee meetings was as set out below:

Remuneration Nominations Director Board Audit Committee Committee Committee Nicholas Ferguson 7/7 N/A N/A 1/1 Francis Finlay 7/7 N/A 2/2 1/1 Lynn Fordham 7/7 N/A N/A 1/1 Caroline Goodall 7/7 N/A 0/1 1/1 Edgar Koning 4/7 N/A N/A 1/1 Denis Raeburn 6/7 4/4 2/2 1/1 Charles Sinclair 6/7 3/4 N/A 1/1 Andrew Sykes 7/7 4/4 N/A 1/1

The Board is satisfied that each of the Chairman and the other non-executive Directors commit sufficient time to the affairs of the Company to fulfil their duties as Directors. Mr Koning has an executive role with Aegon in the Netherlands which can make attending Board meetings difficult. In the event that he does not attend the Chairman and/or the Chief Executive will contact him prior to and following the meeting to keep him apprised and seek his views on the matters to be discussed. Diversity As mentioned above, the Board is comfortable it has an appropriate level of diversity for the Company’s current strategy. It will seek to at least maintain its current 25% proportion of female board membership. In addition the Company’s subsidiaries monitor diversity and in particular adopt policies (such as flexible working arrangements and enhanced maternity pay) to encourage gender diversity. As at 2012, over 50% of the Group’s staff was female, including three out of thirteen employees at the most senior partner level and four out of eleven at the next most senior principal level. Information flows Management reports to the Board on at least a quarterly basis and as appropriate on specific matters. The Chairman ensures that Directors are provided, on a regular basis, with key information on the Company’s policies, regulatory requirements and internal controls. The Board receives and considers reports regularly from its advisers and ad hoc reports and information are supplied to the Board as required. Insurance and Indemnities During the year, the Company maintained cover for its Directors and Officers under a directors’ and officers’ liability insurance policy. The Company provides a Deed of Indemnity to each Director to the extent permitted by United Kingdom law whereby the Company agrees to indemnify such Director against any liability incurred in proceedings in which the Director is successful, and for costs in defending a claim brought against the Director for breach of duty where the Director acted honestly and reasonably. Conflicts of interest In the light of changes to the law resulting from the implementation of the Companies Act 2006, the Board has approved a policy on Directors’ conflicts of interest. Under this policy, the Directors are required to disclose all actual and potential conflicts of interest to the Board as they arise for consideration and approval. The Board may impose restrictions or refuse to authorise such conflicts if deemed appropriate. SVG Capital plc Annual Report 2011 47

Committees The Board has delegated certain responsibilities and functions to Committees. Terms of Reference for each of these Committees are available on the Company’s website at www.svgcapital.com. Details of membership of the Committees at 31 December 2011 may be found on pages 32 and 33 and information regarding attendance at Committee meetings during the year under review may be found above. Audit Committee The role of the Audit Committee is to ensure that the Company maintains the highest standards of integrity in financial reporting and internal control. The Board considers each member of the Committee to be independent. The Board also considers that members of the Committee have competence in accounting. To discharge its duties, the Committee met on four occasions during the year ended 31 December 2011 and considered the annual financial statements, the half-yearly financial statements and the quarterly valuation update, the external Auditors’ year end reports and management letters, the effectiveness of the audit process, the independence and objectivity of the external Auditor (including the provision of non-audit services by the auditors), the risk profile of the Group and the internal audit review process. Remuneration Committee The role of the Committee is to determine remuneration policy throughout the SVG Group and to operate the Company’s Share Awards Schemes. The Board considers each member of the Committee to be independent. To discharge its duties, the Committee met formally on two occasions during the year ended 31 December 2011 and considered the approval of annual bonus proposals and long term incentives for the executive Directors, and key staff based on performance in respect of the year ended 31 December 2011. Nominations Committee The role of the Committee is to consider and make recommendations to the Board on the Board’s composition and balance of skills and experience, and on individual appointments, to lead the process and make recommendations to the Board. To discharge its duties, the Committee met once during the year ended 31 December 2011 and considered an evaluation of the balance of skills, experience, independence and knowledge of the Company in the Board and succession planning. Relations with shareholders The Board believes that the maintenance of good relations with both institutional and retail shareholders is important for the prospects of the Company. It has, since its launch, sought engagement with investors. The Chief Executive and Chairman and other Directors, where appropriate, discuss governance and strategy with major shareholders and the Chairman ensures communication of shareholders’ views to the Board. The Board also undertakes shareholder perceptions research from time to time. information Corporate The Board believes that the Annual General Meeting provides an appropriate forum for investors to communicate with the Board, and encourages participation. The Annual Report and Accounts is, when possible, sent to shareholders at least 20 business days before the Annual General Meeting, which is normally attended by the full Board of Directors. There is an opportunity for individual shareholders to question the chairmen of the Board, Audit and Remuneration Committees. Details of proxy votes received in respect of each resolution are made available to shareholders at the meeting. The Board believes that the Company’s policy of reporting to shareholders as soon as possible after the Company’s year end is valuable. The notice of AGM at page 102 sets out the business of the meeting. SVG Capital plc 48 Annual Report 2011 Corporate governance continued

Going concern The Group’s activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman’s statement on pages 8 and 9, the Chief Executive’s report on pages 10 and 11 and the Business Review on pages 12 to 29. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Financial Review on page 16. In addition note 30 to the financial statements includes details of the Group’s financial instruments and its risk profile. A description of the Group’s risks and risk management are also outlined in the Business Review on pages 27 to 29. The Company finished the year with cash balances of £121 million and has access to an additional £208.8 million through the Revolving Credit Facility. This adequately covers the £170.2 million of uncalled commitments to the investment portfolio. In addition, the Company successfully completed the extension of €100 million of its Revolving Credit Facility to December 2015. In light of the Group’s financial resources, the Directors believe that the Group is positioned to manage its business risks successfully despite the continuing uncertain economic outlook, and, after making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Accounts. Internal control The Code requires the Board to at least annually conduct a review of the adequacy of the Group’s systems of internal control and report to shareholders that it has done so. The Board has undertaken a full review of all the aspects of the Turnbull Guidance for Directors, as revised in October 2005 (the “Turnbull Guidance”) under which the Board is responsible for the Group’s system of internal control and for reviewing its effectiveness. The Board has approved a detailed Risk Map identifying significant strategic, investment-related, operational and service provider-related risks and has adopted an enhanced monitoring system to ensure that risk management and all aspects of internal control are considered on a regular basis. The Board has appointed Deloitte LLP to provide internal audit support and management are required to provide appropriate support to Deloitte LLP in its efforts. The Board believes that the key risks identified and the implementation of an ongoing system to identify, evaluate and manage these risks are appropriate to the Group’s business as an investment trust. The ongoing risk assessment, which has been in place throughout the financial year and up to the date of this report, includes consideration of the scope and quality of the systems of internal control (including whistleblowing polices where appropriate) adopted by major service providers, and ensures regular communication of the results of monitoring by third parties to the Board, the incidence of significant control failings or weaknesses that have been identified at any time and the extent to which they have resulted in unforeseen outcomes or contingencies that may have a material impact on the Group’s performance or condition. No significant control failings or weaknesses were identified during the course of the year and up to the date of this report from the Board’s continuing risk assessment. The Board considers that adequate controls exist over the financial reporting process. A single team is responsible for preparing and consolidating the financial reporting for each of the Group entities and ensuring that financial information is accurate, complete, reconciled and reviewed by senior members of staff, and that transactions and balances are recognised and measured on a consistent basis and in accordance with accounting policies and financial reporting standards. Although the Board believes that it has a robust framework of internal control in place, this can only provide reasonable and not absolute assurance against material financial mis-statement or loss and is designed to manage, not eliminate, risk. SVG Capital plc Annual Report 2011 49 Corporate social responsibility

Introduction The long-term business success of the SVG Capital group requires effective management of both financial and non-financial performance. Our business relies in particular on strong relationships with our employees, our investors, and the general partners of the funds in which we invest. Although we are a major investor in private equity funds, regulations and commercial realities limit the degree to which we can have an active influence on those funds. We aim to develop open, long-term relationships with the general partners with whom we invest. Nonetheless we do engage with general partners to identify where non-financial issues may have an impact on our reputation and on that of our investors. We also engage with relevant industry associations and participate in other initiatives to help raise awareness and understanding of these issues, both within and outside the sector. The Group employs around 70 people based in London, Boston and Singapore. As a financial services firm, the environmental and social impact of our activities is low. However, we are looking at ways to reduce this environmental impact, and to support local communities. We recognise the mutual benefits that can arise from doing so in a consistent way. Overall responsibility for the implementation of the Group’s Corporate Social Responsibility (CSR) Policy rests with the Board, working with relevant corporate functions, including a CSR committee chaired by Nicholas Ferguson. The Board’s strategic priorities with respect to the CSR policy are: Employees Our objective is to recruit, train and retain high calibre employees, and to foster a work environment that helps them to fulfil their potential. To do this we aim to: – provide a supportive work environment and corporate culture – provide appropriate training and development – address, where possible, employees’ interests regarding environmental, social and governance issues. Investors Our objective is to ensure that our operations address investors’ policies relating to environmental, social and governance issues. To do this we aim to: – maintain a high standard of corporate governance – respond to investors’ environmental, social and governance concerns as they relate to our own operations

– give full consideration to investors’ concerns as they relate to our investment activities. information Corporate Funds in which we invest Our objective is to develop strong relationships, balancing the legitimate needs of the general partners of the funds in which we invest with our interests and the expectations of our investors. We aim to do this by: – ensuring the highest levels of integrity in our relationships with general partners – developing strong and open working relationships with general partners, so that we can maintain trust without unnecessary restrictions and unrealistic requests – undertaking early and constructive engagement on environmental, social and governance issues of legitimate concern to our investors. Prior to investment, we evaluate how the general partners assess such issues as part of their due diligence on underlying companies and how they report on such issues. Making a difference where we can

Communities Our objectives are to support our employees’ volunteering and charitable donations through a matched giving scheme and to support communities by providing charitable donations from the Group of up to £350,000 in aggregate per annum. The CSR committee has responsibility for the implementation of the charitable donations policy which is focused on: – creating opportunity – providing access to education – protecting the environment. In 2011, the Group agreed to continue to support the School for Social Entrepreneurs, Fairbridge and the Venture Partnership Foundation. A total of £130,000 was committed to our chosen charities in 2011. Additionally, approximately £57,000 was given via the give as you earn matching programme and other ad hoc donations. In 2011 members of the Group’s legal team provided pro-bono advice at the Islington Legal Centre. This volunteering initiative was conducted together with the law firm Slaughter & May LLP, who have supported the Islington Legal Centre for a number of years. SVG Capital plc 50 Annual Report 2011 Corporate social responsibility continued

Fairbridge Based in 15 of the most disadvantaged areas in England, Scotland and Wales, Fairbridge supports young people aged 13–25 who are not in education, employment or training – giving them the motivation, confidence and skills they need to change their lives. For more information: www.fairbridge.org.uk School for Social Entrepreneurs The School for Social Entrepreneurs (“SSE”) exists to provide training and opportunities to enable people to use their creative and entrepreneurial abilities more fully for social benefit. SSE also want to recruit more innovative and capable people into voluntary and other organisations. The SSE runs practical learning programmes aimed at helping develop the individual entrepreneur and their organisation simultaneously: SSE’s approach, and belief, is that social change is people-powered, and that the most valuable assets and resources we have are human ones. For more information: www.sse.org.uk Venture Partnership Foundation VPF is a grant-making foundation dedicated to supporting social entrepreneurs and the dynamic charities that they run. Using a due diligence process, VPF sources small, fast growing and well-run charities with an innovative solution to a deep social need and entrepreneurial and visionary leadership. VPF provides these charities with financial support (£25,000 of unrestricted funding for three to five years) and significant non-financial pro-bono support from its members and volunteers, such as strategy expertise, senior management mentoring and pro-bono legal advice. In 2011, a number of SVG Advisers’ staff took part in a volunteer-led due diligence process conducting web-based due diligence followed by face-to-face interviews with a range of charities/social enterprises that VPF was looking to include into its portfolio – thereby supporting an important new philanthropic concept. For more information: www.vpf.org.uk/ Environment Our objective is to reduce the most significant environmental impact of our operations. We aim to do this by: – periodically undertaking a carbon footprint analysis – reducing the impact of our travel and energy use – disposing of office waste and used equipment in a responsible manner. Engagement with the sector Our objective is to engage in debates on the role and impact of private equity. We aim to do this by: – working with relevant sector associations – participation in other relevant initiatives – engage in discussions with stakeholders. SVG Capital plc Annual Report 2011 51 Independent auditor’s report to the shareholders of SVG Capital plc

We have audited the financial statements of SVG Capital plc for the year ended 31 December 2011 which comprise the Consolidated and Company Income Statements, the Consolidated and Company Statements of Comprehensive Income, the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company Balance Sheets, the Consolidated and Company Cash Flow Statements and the related notes 1 to 31. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the Company financial statements, as applied in accordance with the provisions of the Companies Act 2006. This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditor As explained more fully in the Directors’ Responsibilities Statement set out on page 35, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s and the Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report and Accounts to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion: – the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31 December 2011 and of the Group and parent company’s profit for the year then ended; – the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and – the parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and – the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. Corporate information Corporate Opinion on other matters prescribed by the Companies Act 2006 In our opinion: – the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and – the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; – the information given in the Corporate Governance Statement set out on pages 44 to 48 with respect to internal control and risk management systems in relation to financial reporting processes and about share capital structures is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following: Under the Companies Act 2006 we are required to report to you if, in our opinion: – adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or – the parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or – certain disclosures of Directors’ remuneration specified by law are not made; or – we have not received all the information and explanations we require for our audit; or – a Corporate Governance Statement has not been prepared by the Company. Under the Listing Rules we are required to review: – the Directors’ statement, set out on page 48, in relation to going concern; – the part of the Corporate Governance Statement relating to the Company’s compliance with the nine provisions of the UK Corporate Governance Code specified for our review; and – certain elements of the report to shareholders by the Board on Directors’ remuneration. Sarah Williams (Senior statutory auditor) for and on behalf of Ernst & Young LLP, Statutory Auditor London 15 February 2012 SVG Capital plc 52 Annual Report 2011 Consolidated income statement

For the year ended 31 December 2011 For the year ended 31 December 2010 Revenue Capital Revenue Capital return return Total return return Total Notes £’000 £’000 £’000 £’000 £’000 £’000 Gains on investments – at fair value through profit and loss 9/14 –138,488138,488 –351,231351,231 Exchange gains on other items –989989 –2,4742,474 Movement in fair value of derivative contracts –3,2773,277 –883883 –142,754142,754 – 354,588 354,588 Operating income Investment income 4,706 – 4,706 11,357 – 11,357 Income from investment advisory services 24,052 – 24,052 24,643 – 24,643 Other operating income 71 – 71 185 – 185 Total operating income 4 28,829 – 28,829 36,185 – 36,185 Operating expenses Administrative expenses 5 (26,200) – (26,200) (24,433) – (24,433) Other operating expenses ––– ––– Total expenses (26,200) (26,200) (24,433) – (24,433) Operating profit 2,629 – 2,629 11,752 – 11,752 Finance costs 8 (36,590) (1,715) (38,305) (39,523) – (39,523) (Loss)/profit before tax (33,961) 141,039 107,078 (27,771) 354,588 326,817 Tax 10 898 (54) 844 (275) 353 78 (Loss)/profit for the year (33,063) 140,985 107,922 (28,046) 354,941 326,895 Attributable to: Equity holders of the parent (33,038) 140,985 107,947 (28,045) 354,942 326,897 Non-controlling interests (25) – (25) (1) (1) (2) Earnings per share From continuing activities

Basic 12 35.6p 106.0p

Diluted 12 34.6p 104.1p

The total column of this statement represents the Group’s income statement, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. The notes on pages 60 to 101 form an integral part of these accounts.

Consolidated statement of comprehensive income

For the year For the year ended ended 31 December 31 December 2011 2010 £’000 £’000 Profit for the year 107,922 326,895 Other comprehensive income: Net gain on cash flow hedges 2,190 694 Other comprehensive income 2,190 694 Total comprehensive income 110,112 327,589 Attributable to: Equity holders of the parent 110,137 327,591 Non-controlling interests (25) (2) 110,112 327,589 SVG Capital plc Annual Report 2011 53 Company income statement

For the year ended 31 December 2011 For the year ended 31 December 2010 Revenue Capital Revenue Capital return return Total return return Total Notes £’000 £’000 £’000 £’000 £’000 £’000 Gains on investments – at fair value through profit and loss 9/14 –138,297138,297 – 350,920 350,920 Exchange gains on other items –825825 –2,8982,898 Movement in fair value of derivative contracts –3,2773,277 –883883 –142,399142,399 – 354,701 354,701 Operating income Investment income 11,254 – 11,254 14,718 – 14,718 Other operating income 23 – 23 142 – 142 Total operating income 4 11,277 – 11,277 14,860 – 14,860 Operating expenses Administrative expenses 5 (9,660) – (9,660) (7,531) – (7,531) Other operating expenses ––– ––– Total expenses (9,660) – (9,660) (7,531) – (7,531) Operating profit/(loss) 1,617 – 1,617 7,329 – 7,329 Finance costs 8 (37,041) (1,715) (38,756) (39,549) – (39,549) (Loss)/profit before tax (35,424) 140,684 105,260 (32,220) 354,701 322,481 Tax 10 3,308 – 3,308 2,134 – 2,134 (Loss)/profit for the year (32,116) 140,684 108,568 (30,086) 354,701 324,615 Earnings per share From continuing activities Basic 12 35.8 105.2p Diluted 12 34.8 104.0p

The total column of this statement represents the Company’s income statement, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Trust Companies. All items in the above statement derive from continuing operations. The notes on pages 60 to 101 form an integral part of these accounts.

Company statement of comprehensive income Financial information

For the For the year ended year ended 31 December 31 December 2011 2010 £’000 £’000 Profit/(loss) for the year 108,568 324,615 Other comprehensive income: Net (loss)/gain on cash flow hedges 837 (62) Other comprehensive (loss)/income 837 (62) Total comprehensive (loss)/income 109,405 324,553 SVG Capital plc 54 Annual Report 2011 Consolidated statement of changes in equity

Share Share Total Non- capital and Share Revenue Capital Hedge option Other equity controlling own shares premium reserve reserve reserves reserve reserves holders interests Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 For the year ended 31 December 2011 Balance at 31 December 2010 305,408 131,230 (54,439) 447,419 (1,471) 8,166 109,364 945,677 125 945,802 (Loss)/profit for the year ––(33,038)140,985–––107,947(25)107,922 Other comprehensive income Recycled through the income statement: – currency contracts (investment advisory services) ––––695––695–695 – interest rate swaps ––––1,121––1,121–1,121 Movement in fair value of cash flow hedges ––––374––374–374 305,408 131,230 (87,477) 588,404 719 8,166 109,364 1,055,814 100 1,055,914 Issue of performance share awards –––––4,028–4,028–4,028 Purchase of treasury shares ––––––(6,775)(6,775)–(6,775) Own shares purchased by EBT (14,334)––––– (14,334)–(14,334) Buy-back of convertible loan notes –––1,754––(1,754)–– – Balance at 31 December 2011 291,074 131,230 (87,477) 590,158 719 12,194 100,835 1,038,733 100 1,038,833

Share Share Total Non- capital and Share Revenue Capital Hedge option Other equity controlling own shares premium reserve reserve reserves reserve reserves holders interest Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 For the year ended 31 December 2010 Balance at 31 December 2009 310,408 131,230 (26,394) 92,477 (2,165) 5,512 109,364 620,432 127 620,559 (Loss)/profit for the year ––(28,045)354,942–––326,897(2)326,895 Other comprehensive income Recycled through the income statement: – currency contracts (investment advisory services)––––971––971–971 – interest rate swaps ––––199––199–199 Movement in fair value of cash flow hedges ––––(476)––(476)–(476) 310,408 131,230 (54,439) 447,419 (1,471) 5,512 109,364 948,023 125 948,148 Issue of performance share awards –––––2,654–2,654–2,654 Own shares purchased by EBT(5,000)––––––(5,000)–(5,000) Balance at 31 December 2010 305,408 131,230 (54,439) 447,419 (1,471) 8,166 109,364 945,677 125 945,802

The notes on pages 60 to 101 form an integral part of these accounts. SVG Capital plc Annual Report 2011 55 Company statement of changes in equity

Share Share capital and Share Revenue Capital Hedge option Other own shares premium reserve reserve reserves reserve reserves Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 For the year ended 31 December 2011 Balance at 31 December 2010 305,408 131,230 (61,264) 447,837 (837) 7,818 109,364 939,556 (Loss)/profit for the year ––(32,116)140,684–––108,568 Other comprehensive income Recycled through the income statement ––––1,121––1,121 Movement in fair value of cash flow hedges ––––(284)––(284) 305,408 131,230 (93,380) 588,521 – 7,818 109,364 1,048,961 Issue of performance share awards –––––3,218–3,218 Buy-back of convertible loan notes – – – 1,754 – – (1,754) – Purchase of treasury shares ––––––(6,775)(6,775) Own shares purchased by EBT (14,334)––––––(14,334) Balance at 31 December 2011 291,074 131,230 (93,380) 590,275 – 11,036 100,835 1,031,070

Share Cash flow Share capital and Share Revenue Capital hedge option Other own shares premium reserve reserve reserve reserve reserves Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 For the year ended 31 December 2010 Balance at 31 December 2009 310,408 131,230 (31,178) 93,136 (775) 5,239 109,364 617,424 (Loss)/profit for the year – – (30,086) 354,701 – – – 324,615 Other comprehensive income Recycled through the income statement ––––199––199 Movement in fair value of cash flow hedges ––––(261)––(261) 310,408 131,230 (61,264) 447,837 (837) 5,239 109,364 941,977 Issue of performance share awards –––––2,579–2,579 Issue of shares (note 22) (5,000)––––––(5,000) Balance at 31 December 2010 305,408 131,230 (61,264) 447,837 (837) 7,818 109,364 939,556

The notes on pages 60 to 101 form an integral part of these accounts. Financial information SVG Capital plc 56 Annual Report 2011 Consolidated balance sheet

As at As at 31 December 31 December 2011 2010 Notes £’000 £’000 Non-current assets Property, plant and equipment 13 1,605 2,720 Investments designated as fair value through profit and loss 14 1,168,511 1,248,774 Derivatives at fair value through profit and loss 4,451 883 Deferred tax asset 2,868 1,200 1,177,435 1,253,577 Current assets Other receivables 18 8,498 7,0 85 Tax recoverable 19 – 3,781 Cash and cash equivalents 18 121,004 17,111 129,502 27,977 Total assets 1,306,937 1,281,554 Current liabilities Other payables 19 (15,107) (34,241) Total assets less current liabilities 1,291,830 1,247,313 Non-current liabilities Senior Notes 20 (162,046) (198,545) Convertible loan notes 20 (90,929) (101,866) Derivatives at fair value through profit and loss 20 – (1,097) Deferred tax liability (22) (3) (252,997) (301,511) Net assets 1,038,833 945,802 Equity Called up share capital 22 310,408 310,408 Own shares 23 (19,334) (5,000) Share premium account 24 131,230 131,230 Capital redemption reserve 24 3,204 3,204 Share purchase reserve 24 85,279 92,054 Share option reserve 24 12,194 8,166 Convertible loan notes – equity 24 12,352 14,106 Hedge reserves 24 719 (1,471) Capital reserve 24 590,158 447,419 Revenue reserve 24 (87,477) (54,439) Shareholders’ funds 1,038,733 945,677 Non-controlling interests 100 125 Total equity 1,038,833 945,802 Net asset value per ordinary share (“Shareholders’ funds”) – undiluted 25 348.4p 307.8p – diluted 25 337.1p 298.9p

The notes on pages 60 to 101 form an integral part of these accounts. The Group’s financial statements were authorised for issue by the Board of Directors on 15 February 2012 and the balance sheets were signed on behalf of the Board by: Lynn Fordham SVG Capital plc Annual Report 2011 57 Company balance sheet

As at As at 31 December 31 December 2011 2010 Notes £’000 £’000 Non-current assets Investments designated as fair value through profit and loss 14 1,160,074 1,239,407 Investments in subsidiaries 17 25,170 22,603 1,185,244 1,262,010 Derivatives at fair value through profit and loss 4,159 883 1,189,403 1,262,893 Current assets Other receivables 18 1,630 1,615 Cash and cash equivalents 18 109,580 7,912 111,210 9,527 Total assets 1,300,613 1,272,420 Current liabilities Other payables 19 (16,568) (31,616) Total assets less current liabilities 1,284,045 1,240,804 Non-current liabilities Senior Notes 20 (162,046) (198,545) Convertible loan notes 20 (90,929) (101,866) Derivatives at fair value through profit and loss 20 – (837) (252,975) (301,248) Net assets 1,031,070 939,556 Equity Called up share capital 22 310,408 310,408 Own shares 23 (19,334) (5,000) Share premium account 24 131,230 131,230 Capital redemption reserve 24 3,204 3,204 Share purchase reserve 24 85,279 92,054 Share option reserve 24 11,036 7,818 Convertible loan notes – equity 24 12,352 14,106 Hedge reserves 24 – (837) Capital reserve 24 590,275 447,837 Revenue reserve 24 (93,380) (61,264) Shareholders’ funds 1,031,070 939,556 Net asset value per ordinary share (“Shareholders’ funds”) – undiluted 25 345.8p 305.8p

– diluted 25 334.6p 297.0p Financial information

The notes on pages 60 to 101 form an integral part of these accounts. The Company’s financial statements were authorised for issue by the Board of Directors on 15 February 2012 and the balance sheets were signed on behalf of the Board by: Lynn Fordham SVG Capital plc 58 Annual Report 2011 Consolidated cash flow statement

For the For the year ended year ended 31 December 31 December 2011 2010 Notes £’000 £’000 Investment management and advisory fee income 23,944 30,177 Interest income 1,130 1,195 Income distributions 3,577 10,822 Expenses of the management and advisory group (18,203) (18,840) Other expenses (2,161) (3,802) Finance costs (35,025) (40,084) Tax recovered 3,776 279 Net cash used in operating activities 26 (22,962) (20,253) Investing activities Capital distributions from core private equity fund portfolio 232,814 66,931 Receipts in respect of other investments 16,323 45,412 Calls paid to core private equity fund portfolio (14,477) (77,108) Payments in respect of other investments (15,858) (36,253) Purchases of property, plant and equipment (608) (968) Net cash from/(used in) in investing activities 218,194 (1,986) Financing Loan facility drawdowns 83,942 79,260 Loan facility repayments (102,137) (156,846) Purchase of own shares into treasury (5,951) – Purchase of own shares by EBT (14,334) (5,000) Buy-back of Senior Notes (37,960) (26,846) Buy-back of convertible loan notes (14,260) – Dividends paid by subsidiaries to non-controlling interests (9) – Net cash (used in)/from financing activities (90,709) (109,432) Net (decrease)/increase in cash and cash equivalents 104,523 (131,671) Cash and cash equivalents at beginning of year 17,111 144,067 Effect of foreign exchange rates on cash and cash equivalents (630) 4,715 Cash and cash equivalents at end of year 28 121,004 17,111

The notes on pages 60 to 101 form an integral part of these accounts. SVG Capital plc Annual Report 2011 59 Company cash flow statement

For the For the year ended year ended 31 December 31 December 2011 2010 Notes £’000 £’000 Interest income 1,078 1,004 Dividends from subsidiaries 6,575 3,421 Income distributions 3,574 10,821 Expenses (6,188) (3,801) Finance costs (35,490) (40,094) Tax received 4,578 – Net cash outflow from operating activities 26 (25,873) (28,649) Investing activities Capital distributions from core private equity funds’ portfolio 232,525 66,927 Receipts in respect of other investments 16,324 45,412 Calls paid to the private equity fund portfolio (14,477) (77,105) Payments in respect of other investments (15,811) (36,230) Investment in subsidiaries (217) (169) Net cash used in investing activities 218,344 (1,165) Financing Loan facility drawdowns 83,942 79,260 Loan facility repayments (102,137) (156,846) Loans from subsidiaries drawn/(repaid) – 10,000 Purchase of own shares into treasury (5,951) – Purchase of own shares by EBT (14,334) (5,000) Buy-back of Senior Notes (37,960) (26,846) Buy-back of convertible loan notes (14,260) – Net cash (used in)/from financing activities (90,700) (99,432) Net (decrease)/increase in cash and cash equivalents 101,771 (129,246) Cash and cash equivalents at beginning of year 7,912 131,067 Effect of foreign exchange rates on cash and cash equivalents (103) 6,091 Cash and cash equivalents at end of year 28 109,580 7,912

The notes on pages 60 to 101 form an integral part of these accounts. Financial information SVG Capital plc 60 Annual Report 2011 Notes to the accounts

1 Accounting policies Basis of preparation The financial statements of the Company and the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”), which comprise standards and interpretations approved by the International Accounting Standards Board (“IASB”), and International Accounting Standards and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee (“IASC”) that remain in effect, and to the extent that they have been adopted by the EU and as applied in accordance with the provisions of the Companies Act 2006. The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice (“SORP”) for the Financial Statements of Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment Companies (“AIC”) in January 2009 is consistent with the requirements of IFRS, the financial statements have been prepared on a basis compliant with the SORP. The Group and Company financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (£’000) except when otherwise indicated. The accounts have been prepared on a going concern basis as the Directors consider that for the foreseeable future the Group will continue to be able to meet its liabilities as they fall due. The accounting policies adopted are consistent with those of the previous financial year. Summary of new standards and interpretations not applied The IASB and IFRIC have issued the following standards and interpretations with an effective date after the date of these financial statements:

Effective date* IFRS 7 (Amendment) Disclosures – Transfer of Financial Assets 1 July 2011 IFRS 9 Financial Instruments 1 January 2015 IFRS 10 Consolidated Financial Statements 1 January 2013 IFRS 11 Joint Arrangements 1 January 2013 IFRS 12 Disclosure of Interests in Other Entities 1 January 2013 IFRS 13 Fair Value Measurements 1 January 2013 IAS 1 (Amendment) Presentation of Items of Other Comprehensive Income 1 July 2012 IAS 12 (Amendment) Deferred Tax – Recovery of Underlying Assets 1 January 2012 IAS 19 Employee Benefits 1 January 2013 IAS 27 Separate Financial Statements 1 January 2013 IAS 28 Investments in Associates and Joint Ventures 1 July 2012

* The effective dates stated are those given in the original IASB standards and interpretations The Directors are considering the full effect of IFRS 10 on the Group. As currently drafted, the adoption of IFRS 10 may lead to the Company being required to consolidate some minority holdings in respect of funds managed or advised by SVG Advisers and SVG Investment Managers. The Directors do not anticipate that the adoption of the remaining standards will have a material impact on the Group’s financial statements in the period of initial application. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and all entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. Financial statements of all Group companies are prepared for the same reporting period. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Presentation of income statement In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the income statement between items of a revenue and capital nature has been presented alongside the income statement. In accordance with the Company’s status as a UK investment company under Section 833 of the Companies Act 2006, net capital returns may not be distributed by way of dividend. in which case they are included at fair value. atfair included are they case in which v investment are they unless atcost, insubsidiaries investment its recognises Company the statements financial separate its In Investments in subsidiaries • • • • • met. are conditions following the of all if accounting hedge for qualifies relationship A hedging incom tothe tooccur, istaken amount the expected isnot transaction related the If above. as liability or asset non-financial o amount carrying initial tothe or statement income tothe transferred are and occurs transaction forecast the until in equity inequity recognised previously amounts isrevoked, ahedge as designation rollover, or its if or replacement without exercised previously recognised are in transf equity tooccur expected longer isno transaction aforecast liability. or If asset non-financial the of amount carrying initial to the tra are toequity taken amounts liability, or the asset anon-financial of cost isthe item hedged the Where occurs. purchase or aforec when as such loss, or profit affects transaction hedged the when statement income tothe transferred are toequity taken Amounts statement. income inthe isrecognised portion ineffective the income,while comprehensive of statement inthe recorded For cash flow hedges, the effective portion of the unrealised gainor unrealised ofthe portion effective the hedges, flow For cash Cash flow hedges statement. income tothe taken are instruments financial derivative of fa inthe changes all hedges flow cash as designated Unless instruments. similar for values tomarket byreference is determined val fair attheir re-measured subsequently are and atcost sheet balance inthe recognised initially are instruments Derivative instruments. inderivative totrade Group’s the isnot It policy movements. exchang foreign and fluctuations rate interest with associated risks its tohedge instruments financial derivative uses Group The Derivative financial instruments value. fair inits changes the within included investments loss or profit through value fair on losses and gains exchange Foreign arise. they inwhich period inthe statement in included are loss, or profit through value atfair held investments as designated investments, from arising losses and Gains date. reporting atthe participants market between place take would transaction orderly an atwhich price Fair is the value Guid Valuation (“IPEV”) Venture and Capital Equity Private International inaccordance with methodologies, valuation recognised byu isestablished value fair active, isnot instrument afinancial for market the where or instruments, unquoted of respect In isquoted. investment the on exchange the of convention the on depending price, traded last the or price bid the ateither valued are instruments Quoted investments. underlying the of value fair the on based value asset net isattheir funds investment which value, atfair dates reporting atsubsequent measured are loss or profit through value fair as designated assets Financial assets are expensed. acqu on costs Incidental recognition. initial on loss or profit through value fair as designated are assets financial such gains, income of form inthe return total their from toprofiting aview with assets infinancial isinvesting Company’s business the As atfair measured initially are and concerned, market bythe established timeframe the within investment the of delivery require whose acontract isunder investment an of sale or apurchase datewhere atrade on derecognised and recognised are Investments Investments statement. income inthe recognised losses and gains with isdischarged, obligation th when derecognised are liabilities Financial transferred. are ownership of rewards and risks the all substantially or expires a the from flow cash tothe right Company’s contractual the when derecognised are assets Financial instrument. the of provisions con tothe aparty becomes Group the Group’s when the sheet on balance recognised are liabilities financial and assets Financial Financial instruments 1 Accounting policies periods for which the hedge was designated. was hedge the which for periods reporti financial the throughout effective highly tohavebeen actually determined and basis ongoing an on isassessed hedge The measured. reliably be can instrument hedging the of value fair the and risk hedged attributa are that item hedged the of flows cash or value fair i.e. the measured, reliably be can hedge the of effectiveness The loss. or profit affect ultimately could that flows incash to variations For cash flow hedges, a forecast transaction that is the subject of the hedge must be highly probable and must present an exposu an present must and probable highly be must hedge the of subject isthe that transaction aforecast hedges, flow cash For relationship. hedging particular that for strategy management risk documented originally the with consistently hed tothe attributable flows cash or value infair changes offsetting inachieving effective highly tobe isexpected hedge The management objective and strategy the for hedge. undertaking risk entity’s the and relationship hedging the of documentation and designation isformal there hedge the of inception At the continued erred toerred the income statement. or the If hedging expires is instrument sold, terminat loss on the hedging instrument is recognised in equity and inequity isrecognised instrument hedging onthe loss , amounts , amounts Annual Report 2011 Report Annual e contractual e contractual isition of such ofsuch isition ue. Fair value ue. Fair value e statement. SVG Capital plc sing sing f a f a the income income the for for nsferred nsferred ehicles, ehicles, or capital or capital remain remain ed or ed or value. are are ble to the tothe ble e ged risk, ged risk, ir value ir value

tractual tractual ast sale ast sale which which elines. elines. sset sset terms terms

ng ng re re

61 Financial information SVG Capital plc 62 Annual Report 2011 Notes to the accounts continued

1 Accounting policies continued Investments in associates In accordance with IAS 28 ‘Investments in Associates’, the standard does not apply to investments held in associates by private equity organisations that are designated as fair value through profit or loss. Such investments are measured at fair value, with changes in fair value recognised in profit or loss in the period in which they occur. An associate is an entity over which the Group is in a position to exercise significant influence, but not control or joint control, through participation in the financial and operating policy decisions of the investee. Convertible loan notes Convertible loan notes are regarded as compound instruments, consisting of a liability component and an equity component. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible debt. The difference between the proceeds of issue of the convertible loan notes and the fair value assigned to the liability component, representing the embedded option to convert the liability into equity of the Group, is included in equity. Issue costs are allocated proportionately to the liability and equity components. The liability component is accounted for as a borrowing. Bank borrowings and loan notes Interest-bearing bank loans and loan notes issued are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the income statement account using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Equity instruments Equity instruments issued by the Company are recorded as the proceeds received, net of direct issue costs. Own shares Own shares represent SVG Capital plc shares held in Employee Benefit Trusts to meet the future requirements of the employee share-based payment plans. The EBTs are accounted for as extensions of the parent company. Share-based payments The Group has applied the requirements of IFRS 2 ‘Share-based Payments’. In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested as of 1 January 2005. The cost of equity-settled share-based payments with employees of the Group are measured at fair value at the date of grant and recognised as an expense over the vesting period, which ends on the date on which the employees become unconditionally entitled to the award. Fair value is determined by an external valuer using an appropriate valuation model. In valuing equity-settled transactions, no account is taken of any non-market vesting conditions. At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best estimate of the number of equity instruments that will ultimately vest. The movement in cumulative expense since the previous balance sheet date is recognised in the consolidated income statement, with a corresponding entry in equity. The cost of equity awards to employees of subsidiaries is added to the Company’s investment in subsidiaries. Revenue recognition Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. Interest income is classified within operating activities in the cash flow statement. Dividend income from investments is recognised when the shareholders’ rights to receive payment has been established and is classified within operating activities in the cash flow statement. Investment management and advisory fees are accrued over the period for which the service is provided. Revenue that has been earned, but the receipt of which is contingent on the occurrence of a future event, such as investors receiving a return of capital, is only recognised when Management judges the realisation of that income to be virtually certain. The Group’s revenue and realised capital gains are derived primarily from distributions in respect of its holdings in fund investments. Realised gains on capital distributions which arise from the realisation of investments within the funds, and on sale of investments are credited to the income statement and taken to the capital reserve. Income distributions are credited to the income statement and taken to the revenue reserve. at the rates prevailing on the balance sheet prevailingonthe rates at the re are currencies inforeign denominated are that liabilities and assets date, monetary sheet balance Ateach transactions. the comprehensive income, in which case the deferred tax is also dealt with inequity. with dealt isalso tax deferred the case inwhich income, comprehensive toot directly credited or charged toitems itrelates when except statement, income inthe credited or ischarged tax Deferred asset the or issettled liability the when period inthe toapply expected are that rates tax atthe iscalculated tax Deferred recovered. tobe asset the of part or all toallow available be will profits taxable sufficient that probable longe itisno that extent tothe reduced dateand sheet balance ateach isreviewed assets tax deferred of amount carrying The future. foreseeable inthe reverse not will difference temporary that the itisp and difference temporary the of reversal the tocontrol isable Group the where except injoint ventures, and interests associates and insubsidiaries investments on arising differences temporary taxable for recognised are liabilities tax Deferred profit. accounting the nor profit ne affects that inatransaction liabilities and assets combination) other of (other inabusiness than recognition the initial or goodwill from arises difference temporary the if not recognised are liabilities and assets Such utilised. be can differences temp deductible which against available be will profits taxable that itisprobable that extent tothe recognised are tax assets and differences temporary taxable all for recognised generally are liabilities tax Deferred method. liability sheet the balance using isaccounted for and profit, taxable of computation inthe used bases tax corresponding the and statements financial in the liabili and assets of amounts carrying the between differences on recoverable or payable tobe expected tax is the tax Deferred capital gains. 1158 Tax on Section 2010 under Act taxation for haveapproval Corporation which and liable not are Income trusts Investment date. sheet balance by the enacted or substantively enacte havebeen that rates tax using iscalculated tax current for Group’s The liability deductible. or taxable never are that excludes itfurther and years inother deductible or taxable are that expense or income of items itexcludes because statement incom inthe reported as profit net from year. the for differs Taxable profit profit taxable on isbased payable currently tax The tax. deferred and payable currently tax the sumof the represents expense tax The Taxation appropriate. as capital, or torevenue either allocated Group operates. Transactions in currencies Transactions incurrencies operates. Group inwhich environment economic primary the of currency isthe this as sterling, Company ispounds the of currency functional The Foreign currencies costs. or assets, plan Group’s the obligations, allocating for basis ofth interms areset Group bythe payable contributions the where situat Such purposes. accounting for reliability sufficient with plan the of position financial and performance underlying the of s its toidentify isunable Group the where schemes contribution defined for as way same inthe for accounted are schemes benefit todefi relating costs The due. fall they as expense an as charged are schemes benefit retirement contribution todefined Payments Retirement benefit costs over basis astraight-line on spread also are lease into operating an toenter incentive an as receivable and received Benefits lease. relevant the of term the over basis astraight-line on toincome charged are leases operating under payable Rentals The Group as lessee leases. operating as classified are leases other All to the lessee. owner of rewards and risks the all substantially transfer lease the of terms the whenever leases finance as classified are Leases Leasing 1 Accounting policies continued other than pounds sterling ar sterling pounds than other date. Gains and losses arising onretransl arising date. Gainsandlosses e scheme as a whole and, as such, there is no consistent and consistent isno there such, as and, awhole as e scheme e recorded at the rates of exchange prevailing on the d ofexchange prevailingonthe rates at the e recorded ation are included in areincluded ation the income stateme the ither the tax tax the ither is realised. isrealised. Annual Report 2011 Report Annual the lease term. lease the from from d deferred deferred robable robable , SVG Capital plc ship ship orary orary translated nt and are nt and are her her e ions arise ions arise items items r ties ties reliable reliable ates of of ates

the the hare hare ned ned

63 Financial information SVG Capital plc 64 Annual Report 2011 Notes to the accounts continued

1 Accounting policies continued Property, plant and equipment Fixtures and equipment are stated at cost, including direct acquisition costs, less accumulated depreciation and any recognised impairment loss. Depreciation is charged so as to write off the cost less estimated residual value of assets over their estimated useful lives, using the straight-line method, on the following bases: Telecommunications and office equipment 10%–20% Leasehold improvements 10% Computer equipment 20%–33% The Group does not ordinarily provide for depreciation against art. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income. The carrying values of property, plant and equipment are reviewed for impairment when events or circumstances indicate the carrying value may not be recoverable. Cash and cash equivalents Cash and cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment purposes. Assets are classified as cash equivalents if they are readily convertible to cash and are not subject to significant changes in value. The Company has classified short-term bank deposits, investments in money market funds and short-dated treasury bills as cash equivalents. 2 Significant accounting judgements, estimates and assumptions The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of profits and net assets at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that have a material impact on net assets in future periods. The key assumptions and sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to net assets within the next financial year are discussed below. Other areas of uncertainty and risk are discussed in note 30. Fair value of financial instruments The Group primarily invests in private equity limited partnerships (“Funds”) that in turn invest in companies that are typically unquoted. Valuing unquoted investments involves a significant degree of judgement. Fair values of the Funds in which the Group invests are typically provided by the general partner of such funds and are reviewed and, if considered appropriate, approved by the Board. The fair value of a Fund’s investment in an investee company is generally obtained by calculating the Enterprise Value (“EV”) of the company and then deducting financial instruments, such as external debt, ranking ahead of the Fund’s highest ranking instrument in the company. A common method of determining the EV is to apply a market-based multiple (e.g. an average multiple based on a selection of comparable quoted companies) to the ‘normalised’ earnings of the investee company. This market-based approach presumes that the comparator companies are correctly valued by the market. A discount is sometimes applied to market based multiples to adjust for points of difference between the comparators and the company being valued. Where the fair value of financial assets recorded in the Group’s balance sheet cannot be derived from active markets, they are determined using valuation techniques, in accordance with IPEV Valuation Guidelines, including the methodology briefly outlined above. The valuation techniques recommended by the IPEV Board are industry standard. However, amounts ultimately realised on disposal of an investee company can differ materially from the previous carrying value and therefore have a significant impact on the Group’s profits and net assets. (“SVGS”) provide research and support to the Group. tothe support and research (“SVGS”) provide (Singapore) Pte. Limited Advisers (“SVGNA”) SVG and America North SVG (“SVGI”), Inc. Advisers SVG Limited. Managers Investment SVG and (“SVGM”) Limited (“SVGA”), Managers Limited SVG Advisers bySVG provided are services advisory and management Inves techniques. equity private using equity inpublic and equity inprivate investment for products advise and manage market, structure, businesses andincome Company, for the andcreate capital To advisory fund objective its investment complement this Investment management services and advisory investments. non-Permira and Group’s toPermira isthe exposure activities investment within analysis segmental A further Tru Platinum The and LP India SVG plc, Capital bySVG undertaken are activities Investing funds. these alongside co-investments and funds specialist through businesses quoted and inunquoted and sectors, sciences life the and Asia America, North in Japan, tha funds equity inprivate invests Company the addition, In specialist. equity private international an byPermira, or advised are that funds equity inprivate principally byinvesting appreciation capital istoachieve objective investment Capital’s SVG Investing activities activities: principal two following into the organised iscurrently Group the purposes, management For segments 3 Business year. inthe recognised been has fees contingent of inrespect amounts No certain. be virtually isdeemed income that of realisation the when recognised isonly events future on contingent are that fees of inrespect Income as investors receiving a return of capital. Management judgement events, future on contingent are that fees advisory investment certain of recoverability tothe respect with exists Uncertainty fees contingent of Recovery gains. capital on tax corporation from isexempt the Company trus investment an As portfolio. investment its on gains capital of form inthe primarily returns toderive expects Company The strategies. planning tax future with together profits taxable future of the level judgement is required to determine the amount of deferred as tax Management profits. taxable future tooffset utilise can Company the that losses tax brought-forward of inrespect recognised bee havenot assets tax deferred Significant income. taxable future of timing and amount tothe respect with exist Uncertainties Taxes 2 Significant accounting andassumptions estimates judgements, sets thatsets can be recognised, based upon the likely timing and is required to determine the probability that fees are recover continued Annual Report 2011 Report Annual managed managed SVG Capital plc t invest t invest such such able. able. to to t, t, n

tment tment st.

65 Financial information SVG Capital plc 66 Annual Report 2011 Notes to the accounts continued

3 Business segments continued These activities are undertaken by SVG Advisers Limited, SVG Managers Limited, SVG Investment Managers Limited, SVG Advisers (Singapore) Pte. Limited, SVG Advisers Inc. and SVG North America Inc. Segmental information showing the performance of these business segments is presented below:

For the year ended 31 December 2011 For the year ended 31 December 2010 Investment Investment management management Investing and advisory Investing and advisory activities services Eliminations Total activities services Eliminations Total Group £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Income from investment advisory services –24,747 –24,747 –25,614 –25,614 Gain/(loss) on forward rate contracts –(695)–(695) –(971)–(971) Other operating and investment income 4,671 106 – 4,777 11,407 135 – 11,542 Intra-group income 6,609 7,660 (14,269) – 3,470 5,933 (9,403) – 11,280 31,818 (14,269) 28,829 14,877 30,711 (9,403) 36,185 Performance shares and options fair value & N.I. –(3,581)–(3,581) – (4,333) – (4,333) Other administrative costs (2,644) (19,975) – (22,619) (1,812) (18,288) – (20,100) Intra-group expenses (7,194) – 7,194 – (5,905) – 5,905 – (9,838) (23,556) 7,194 (26,200) (7,717) (22,621) 5,905 (24,433) Operating profit/(loss) 1,442 8,262 (7,075) 2,629 7,160 8,090 (3,498) 11,752 Finance costs (38,305) – – (38,305) (39,523) – – (39,523) Intra-group finance costs (466) (34) 500 – (43) (34) 77 – Gains/(losses) on fair value through profit and loss, including derivatives 141,758 7 – 141,765 352,102 12 – 352,114 Exchange gains/(losses) 826 163 – 989 2,797 (323) – 2,474 Profit before tax 105,255 8,398 (6,575) 107,078 322,493 7,745 (3,421) 326,817

Dividends –––– –––– Intra-group dividends – (6,575) 6,575 – – (3,421) 3,421 – – (6,575) 6,575 – – (3,421) 3,421 –

Total assets 1,267,865 39,072 – 1,306,937 1,246,011 35,624 – 1,281,635 Total liabilities (258,011) (10,093) – (268,104) (325,700) (10,133) – (335,833) Intra-group assets/(liabilities) (15,523) 15,523 – – (12,376) 12,376 – – Net assets 994,331 44,502 – 1,038,833 907,935 37,867 – 945,8 02 Exposure to Permira includes direct investments in Permira funds plus investments in Permira Feeder Vehicles. Feeder inPermira investments plus funds inPermira investments direct includes toPermira Exposure Total exposure Total Uncalled commitments Exposure to Permira Other. and SVGIM SVGA, description): (see ear categories three following the between analysed further be can services advisory and management Group’sThe investment Investment portfolio value Investment portfolio exposure Total Uncalled commitments value Investment portfolio segments 3 Business from UK operations. A geographical analysis of investments is included in note 16, with further details in note 30. innote 30. details innote 16, isincluded further with investments of analysis Ageographical operations. UK from mainly arises Income services. advisory and management any investment provide not does and company investment isan Capital SVG Other administrative expenses administrative Other Total operating income Group Company Company Gain/(loss) on fair value through profit and loss and profit Gain/(loss) through value fair on Finance costs Operating profit Profit/(loss) before tax gains/(losses)Exchange Total assets Total Net assets Net Total liabilities continued ,0,1 1,300,613 – 1,300,613 ,3,7 1,031,070 – 1,031,070 2953 (269,543) – (269,543) 0,6 105,260 – 105,260 3,5)–(38,756) – (38,756) 4,7 141,574 – 141,574 127–11,277 – 11,277 960 (9,660) – (9,660) Investing Investing activities activities ,1 1,617 – 1,617 £’000 2 825 – 825 ,1,0 2,4 1,338,752 324,548 1,014,204 ,1,4 1,6 1,330,315 316,169 1,014,146 For the year ended 31 December 2011 31 December ended year the For 1,0 4,6 1,160,074 243,565 916,509 1,6 5,4 1,168,511 251,944 916,567 7677,0 170,241 72,604 97,637 7677,0 170,241 72,604 97,637 Permira Permira management £’000 £’000 and advisory and advisory Investment Investment services services £’000 Non-Permira Non-Permira Non-Permira Non-Permira £’000 £’000 31 December 2011 31 December 2011 £’000 Total Total £’000 £’000 Total Total ,7,2 1,272,420 – 1,272,420 3284 (332,864) – (332,864) 2,8 322,481 – 322,481 3,5 939,556 – 939,556 5,0 351,803 – 351,803 3,4)–(39,549) – (39,549) 480–14,860 – 14,860 ,0,2 3,7 1,239,407 233,478 1,005,929 ,0,6 4,0 1,248,774 242,607 1,006,167 ,1 ,8 3,2 1,449,207 331,327 1,117,880 Investing Investing 751 (7,531) – (7,531) ,1,1 4,5 1,458,574 340,456 1,118,118 ,9 2,898 – 2,898 activities activities ,2 7,329 – 7,329 1,5 789209,800 97,849 111,951 1,5 789209,800 97,849 111,951 £’000 Permira Permira For the year ended 31 December 2010 31 December ended year the For £’000 £’000 management and advisory and advisory Investment Investment Non-Permira Non-Permira Non-Permira Non-Permira services services £’000 £’000 £’000 Annual Report 2011 Report Annual 31 December 2010 31 December 2010 SVG Capital plc £’000 £’000 £’000 Total Total Total Total lier lier

67 Financial information SVG Capital plc 68 Annual Report 2011 Notes to the accounts continued

4 Operating income

For the For the For the For the year ended year ended year ended year ended 31 December 31 December 31 December 31 December 2011 2011 2010 2010 Group Company Group Company £’000 £’000 £’000 £’000 Income from investments: Dividends from subsidiaries –6,575 –3,421 Income from money market instruments 85 61 84 24 Interest from funds and co-investments 1,045 1,045 451 451 Other income from funds and co-investments 3,576 3,573 10,822 10,822 Other operating income: Income from investment advisory services 24,747 – 25,614 – Gain/(loss) on forward rate contracts (695) – (971) – Other interest receivable and other income 71 23 185 142 28,829 11,277 36,185 14,860 Represented by: Interest 1,201 1,129 704 601 Income from investment advisory services 24,052 – 24,643 – Dividends from subsidiaries –6,575 –3,421 Other income from funds and co-investments 3,576 3,573 10,822 10,822 Other income ––16 16 28,829 11,277 36,185 14,860

5 Administrative expenses

For the For the For the For the year ended year ended year ended year ended 31 December 31 December 31 December 31 December 2011 2011 2010 2010 Group Company Group Company £’000 £’000 £’000 £’000 Fees payable to SVG Advisers Limited –7,194 –5,905 Directors’ remuneration 1,439 468 1,277 412 Performance shares and options fair value charge 3,218 – 2,579 – N.I. on performance shares and options 363 – 1,754 – Staff costs (note 6) 10,533 – 10,386 – Depreciation (note 13) 1,724 – 886 – General expenses 8,568 1,848 7, 218 1,025 Auditors’ remuneration – Statutory audit fees: Company 110 110 105 105 – Statutory audit fees: subsidiaries 115 – 102 – – Regulatory reporting 6– 2– – Other services 124 40 124 84 26,200 9,660 24,433 7,531

The Directors are the only key management personnel of the Company. Their total remuneration is discussed in more detail in the Remuneration Report. The Company’s current executive Director, Lynn Fordham, received remuneration in the form of salary, bonus and benefits as a Director of SVG Capital of £970,000 (2010: £865,000) in respect of her employment with SVG Advisers Limited, a wholly-owned subsidiary. The fair value charge to the Group in respect of performance shares includes an amount of £655,000 (2010: £432,000) attributable to Lynn Fordham. Seconded staff Employees (note costs 7) Pension Wages, salaries and bonuses costs 6 Staff can be found in the Annual Report and Accounts of Schroders plc. ofSchroders andAccounts Report Annual found inthe be can o details Further Group. tothe costs and assets plan obligations, the allocating for basis reliable and consistent isno there sh balance atthe Scheme the of liabilities and assets underlying the of share its identify toreadily isunable Group the that bas the on scheme contribution adefined as for accounted 19,are Scheme IAS tothe with accordance In Group’s the contributions Defined benefit schemes comprises: costs pension for charge The 7 Pension costs Of the £269,000 expense relating to money purchase schemes, £209,000 is in respect of staff and £60,000 is in respect of direct of isinrespect £60,000 and staff of isinrespect £209,000 schemes, purchase tomoney relating £269,000 the expense Of payments. any such estimate reliably to uncertainty much istoo there believes Group The payments. tomake further required maybe Group the toarise, were deficit amater if scheme, this under payments tomake further 19. notexpect IAS does under Group the £34.3 calculated million, Whilst o Scheme the of inrespect surplus pension anet disclosed plc 2010 at31 Schroders of December accounts section the and benefit The Company has no employees (2010: nil). The average number of staff employed by the Group was: Group bythe employed (2010: staff of number employees no has Company average nil).The The Other costs staff costs security Social costs Redundancy Money purchaseMoney schemes Scheme’s trustees, taking advice from the independent actuaries, agree the contributions. the agree actuaries, independent the from advice taking Scheme’s trustees, the and SVGA Limited. Management Investment Schroder from Company, the of seconded were that subsidiary owned a wholly (“SVGA”), Limited Advisers SVG of employees former four of inrespect (“the Scheme”) Scheme Benefits Retirement Schroders to the due topayments relate schemes benefit defined of inrespect Costs scheme. pension Group inaSVG notparticipate does Group The In particular, the Scheme had 305 active members in the defined inthe members had305 Scheme active Inparticular, the 31 December 31 December year ended year ended 053– 10,533 ,8 – 1,082 ,1 – 8,310 For the For the 49 – (449) Group Group Group Group £’000 £’000 0 – 209 0 – 209 5 – 658 1 – 919 2011 2011 2011 2011 3– 13 31 December 31 December year ended year ended Company Company Company Company For the For the £’000 £’000 2011 2011 31 December 31 December 31 December year ended year ended year ended 036– 10,386 Number ,0 – 1,001 ,5 – 7,655 32 – (322) For the For the For the Group Group Group Group £’000 £’000 8 – 689 3 – 832 3 – 531 1 – 510 1 – 510 2010 2010 2011 2011 70 70 Annual Report 2011 Report Annual f the Scheme Scheme f the eet date as dateas eet – SVG Capital plc 31 December 31 December 31 December year ended year ended year ended ors. Company Company Company Company ial ial Number For the For the For the f is is £’000 £’000 2010 2010 2010

74 74

–

69 Financial information SVG Capital plc 70 Annual Report 2011 Notes to the accounts continued

8 Finance costs

For the For the For the For the year ended year ended year ended year ended 31 December 31 December 31 December 31 December 2011 2011 2010 2010 Group Company Group Company £’000 £’000 £’000 £’000 Convertible loan note interest 9,336 9,336 9,733 9,733 Amortisation of issue and listing costs plus premium to redemption on convertible loan notes 1,609 1,609 1,718 1,718 Release of premium on buy-back of convertible loan notes 1,715 1,715 –– Senior Note interest 16,598 16,598 19,599 19,599 Amortisation of issue costs on Senior Notes 1,308 1,308 948 948 Swap payments 1,121 1,121 199 199 Loan facility finance costs 4,399 4,399 5,377 5,377 Amortisation of loan facility issue costs 1,769 1,769 1,713 1,713 Other finance costs 450 901 236 262 38,305 38,756 39,523 39,549

9 Operations in the year There is a large degree of uncertainty and risk involved in investing in private equity and the results of the Group and the Company are primarily dependent on the performance of its private equity fund investments. During the year ended 31 December 2011, gains on investments amounted to £138.5 million (2010: gains of £351.2 million) for the Group and £138.3 million (2010: gains of £350.9 million) for the Company. As detailed in note 30, the Company had agreed that it should focus its investments mainly on Permira funds. As such, and given that our largest exposures currently are to Permira funds (see notes 3 and 31), we expect that the performance of the Company will be largely dependent on the performance of the Permira funds in which we invest. oa a rdt(oe1() 338 (3,308) – (3,308) through primarily invests Company year. the current inthe Company As the for tax tocorporation chargeable profits no are There (noteTotal credit 10(c)) tax oa eerdtx––– – – Total deferred tax eerdtxastcridfrad692192,868 2,199 669 forward carried asset tax Deferred oa eerdtx(5)–(858) – (844) (858) 54 (898) Total charge/(credit) tax (note 10 (c)) tax Total deferred yearPrior adjustment relief) (group adjustment year Prior Company oa urn a (,0)–(3,308) – (3,308) Group (b) Movement in deferred income taxes: periods. tofuture forward carried are expenses unutilised but not capitalised are expenses management Company. excess the of income These any taxable against toset available partnershi bythose incurred portfolio funds’ equity private tothe relating expenses management excess structures, partnership Deferred tax Deferred tax Total tax current yearPrior adjustment Group relief tax Current has been recognised by SVG Investment Managers Ltd. Managers Investment by SVG recognised has been (2010: £73,000 of asset tax £nil) Ltd.Adeferred Advisers SVG of (2010: inrespect recognised of £2,560,000 been has £992,000) asset tax Adeferred UStaxation. of inrespect Inc. Advisers bySVG (2010: recognised been £205,000 of has £204,000) tax asset 25% of rate (2010: atax using method liability 28%). the under Ad differences temporary on infull iscalculated tax Deferred taxable profits. against offset for indefinitely available are relates asset unrecognised this towhich differences temporary other and expenses managem excess The utilised. be can differences temporary and losses these which against profits taxable sufficient be will there th evidence isinsufficient there as recognised not been has differences, temporary other and losses expenses, management excess £32.7 of (2010: million asset tax A deferred million), £26.6 £nil(2010: which of inequity, re recognised havebeen would nil) forward brought asset tax Deferred Deferred tax asset Deferred tax Deferred tax Total tax current tax Corporation tax Current (a) The charge for tax for the year is made up as follows: Tax 10 Group Credit/(charge) inequity directly recognised Credit/(charge) statement income inthe recognised Overseas tax 328 (3,248) – (3,248) Revenue Revenue Revenue Revenue 87 (857) – (857) £’000 Other Other £’000 £’000 4 5 1,200 651 549 2 3 858 738 120 6)–(60) – (60) 4)5 14 54 (40) 2011 5)5 3 54 (51) 3–13 – 13 2 (2) – (2) 1 (1) – (1) For the year ended 31 December 2011 31 December ended year the For – –810810 For the year ended 31 December 2011 31 December ended year the For Share-based Share-based payments payments Capital Capital £’000 £’000 £’000 2011 –– deferred tax £’000 £’000 £’000 Total 2011 Total Total Total 272 (2,722) – (2,722) 214 (2,134) – (2,134) 214 (2,134) – (2,134) Revenue Revenue Revenue Revenue ,8 1,080 – 1,080 24 9 45 299 (254) 27 (207) – (207) 18 (178) – (178) £’000 Other Other £’000 £’000 8 588 – 588 2 7 1,200 374 826 7 33 (78) (353) 275 5 33 100 (353) 453 3 33 84 (353) 437 2010 9–29 – 29 6–16 – 16 For the year ended 31 December 2010 31 December ended year the For ––– ––– –7575 ––– For the year ended 31 December 2010 31 December ended year the For Share-based Share-based payments payments Capital Capital £’000 £’000 £’000 2010 Annual Report 2011 Report Annual SVG Capital plc lating to to lating future future eferred eferred deferred tax ps are ps are

ent ent

at at

£’000 £’000 £’000 2010 Total Total Total Total

71 Financial information SVG Capital plc 72 Annual Report 2011 Notes to the accounts continued

10 Tax continued (c) Factors affecting current tax charge for the year: The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 26.5% for a large company (2010: 28%). The differences are explained below:

For the For the For the For the year ended year ended year ended year ended 31 December 31 December 31 December 31 December 2011 2011 2010 2010 Group Company Group Company £’000 £’000 £’000 £’000 Profit/(loss) before tax 107,078 105,260 326,817 322,481 Corporation tax at 26.5% (2010: 28%) 28,376 27,894 91,509 90,295 Effects of: Non-taxable capital (gains)/losses (37,329) (37,281) (99,365) (99,316) Non-taxable income net of disallowable expenses (450) (2,207) (17) (989) Difference between accounting and taxable income from funds (867) (867) (2,696) (2,696) Depreciation of items not eligible for capital allowances 68 – 25 – Income of subsidiary not taxable –––– Income taxable at (lower)/higher rates –––– Prior year adjustments re UK corporation tax (29) (60) 45 588 Temporary differences arising in the year on which deferred tax is not recognised –––– Unutilised current year losses carried forward 9,217 9,213 9,986 9,984 Overseas tax 21 – 297 – Share price movements on deferred tax assets relating to share options and long-term incentive schemes 56 – 72 – Net overseas losses for which no deferred tax has been recognised 59 – 53 – Deferred tax adjustments in respect of changes in UK tax rates 34 – 13 – Total tax credit for the year (note 10(a)) (844) (3,308) (78) (2,134)

11 Dividends

For the For the For the For the year ended year ended year ended year ended 31 December 31 December 31 December 31 December 2011 2011 2010 2010 Group Company Group Company £’000 £’000 £’000 £’000 Amounts recognised as distributions in the year: Dividend of nil (2010: nil) ––– –

In order to maintain investment trust status, the Company must not retain more than 15% of its income from shares and securities. The total dividend payable in respect of the financial year and which will be taken into account in determining the amount of net revenue retained under the requirements of Section 1159 of the Corporation Tax Act 2010, is set out below.

For the For the For the For the year ended year ended year ended year ended 31 December 31 December 31 December 31 December 2011 2011 2010 2010 Group Company Group Company £’000 £’000 £’000 £’000 Dividend of nil (2010: nil) –––– t1Jnay21 ,6 9 5 92,720 99 1,605 99 3,420 454 – 380 898 28 307 1,260 2,604 1,098 509 64. page on out set policy accounting the inaccordance with capitalised are which expenses equipment com standard the of part tobe not considered are expenses These projects. toIT inrelation capitalised previously expenditure project wrote-off year, the Advisers SVG During companies. subsidiary Capital’s SVG of assets are equipment and plant Property, 2011 At 1January At 31 December 2011 value book Net At 31 December 2011 ipsl 3)(0 (41) 1 – – 1,724 (10) 1 1,736 – (31) – – 74 – 5,025 242 – 99 1,488 1,147 162 687 347 2,632 1,607 Exchange translation Disposals year the for Charge 2011 At 1January Depreciation At 31 December 2011 Exchange translation –11–2 ipsl 3)(0 9 (50) (9) (10) (31) – Disposals Diluted Basic share per Earnings share per earnings diluted of purposes the for shares ordinary of number average Weighted 13 Property, plant andequipment (Group) diin 1 617 – – 4,456 617 108 – 696 2,045 1,607 Additions 2011 At 1January Cost shares Share options and performance shares: ordinary potential dilutive of Effect shares per earnings basic of purposes the for shares ordinary of number average Weighted ofNumber shares attributable to equity holders of holders parent the to equity attributable profit net being share per earnings basic of purposes Earnings/(loss) the for data: following 33, the on IAS isbased inaccordance share, with per earnings diluted and basic the of calculation The 12 share per Earnings improvements improvements Leasehold Leasehold 1,7,6 312,275,463 312,275,463 £’000 0,3,1 303,637,117 303,637,117 ,3,4 8,638,346 8,638,346 31 December 0,4 108,568 107,947 year ended 46 34.8p 34.6p 56 35.8p 35.6p ubrNumber Number For the Group Group £’000 2011 2011 equipment equipment Computer Computer £’000 31 December year ended Company Company munications munications For the equipment equipment £’000 and office and office 2011 Telecom- Telecom- £’000 0,6,3 308,464,430 308,464,430 1,4,7 314,041,879 314,041,879 ,7,4 5,577,449 5,577,449 31 December 2,9 324,615 326,897 year ended 0.p105.2p 106.0p 0.p103.4p 104.1p ubrNumber Number For the Group Group £’000 2010 £’000 Annual Report 2011 Report Annual Art Art SVG Capital plc puter puter 31 December year ended

Company Company For the £’000 £’000 2010 Total Total

73 Financial information SVG Capital plc 74 Annual Report 2011 Notes to the accounts continued

13 Property, plant and equipment (Group) continued

Telecom- munications Leasehold Computer and office improvements equipment equipment Art Total £’000 £’000 £’000 £’000 £’000 Cost At 1 January 2010 1,471 1,146 683 101 3,401 Additions 13591710101,072 Disposals – (21) – (3) (24) Exchange translation 133–7 At 31 December 2010 1,607 2,045 696 108 4,456 Depreciation At 1 January 2011 179 529 159 – 867 Charge for the year 168 637 81 – 886 Disposals – (21) – – (21) Exchange translation –22–4 At 31 December 2010 347 1,147 242 – 1,736 Net book value At 31 December 2010 1,260 898 454 108 2,720 At 1 January 2010 1,292 617 524 101 2,534

14 Investments (a) Group

Private Private equity fund Other Total equity fund Other Total portfolio investments portfolio portfolio investments portfolio 2011 2011 2011 2010 2010 2010 Fair value through profit or loss assets £’000 £’000 £’000 £’000 £’000 £’000 Valuation brought forward 1,054,730 194,044 1,248,774 731,275 164,300 895,575 Calls and purchases 14,477 15,848 30,325 77,108 36,253 113,361 Distributions and sales (232,813) (16,263) (249,076) (66,931) (44,462) (111,393) Gains/(losses) on investments 117,009 21,479 138,488 313,278 37,953 351,231 Transfer of investments 2,529 (2,529) – ––– Valuation carried forward 955,932 212,579 1,168,511 1,054,730 194,044 1,248,774

(b) Company

Private Private equity fund Other Total equity fund Other Total portfolio investments portfolio portfolio investments portfolio 2011 2011 2011 2010 2010 2010 £’000 £’000 £’000 £’000 £’000 £’000 Valuation brought forward 1,054,476 184,931 1,239,407 731,034 156,179 887,213 Calls and purchases 14,477 15,811 30,288 77,105 36,230 113,335 Distributions and sales (232,525) (16,262) (248,787) (66,927) (44,460) (111,387) Gains/(losses) on investments 116,917 22,249 139,166 313,264 36,982 350,246 Transfer of investments 2,529 (2,529) – ––– Valuation carried forward 955,874 204,200 1,160,074 1,054,476 184,931 1,239,407

The total gain of £138,297,000 (2010: gain of £350,920,000) shown in the Company’s income statement also includes a loss on subsidiaries during the year of £869,000 (2010: loss of £674,000). Following the sale of the significant majority of the Group’s warehoused assets in 2010 and 2011, the one remaining fund commitment to American Capital Equity II is being considered part of the Private Equity Fund portfolio and has been transferred accordingly. All funds in the private equity fund portfolio are unlisted. However, some of the underlying companies held within those funds are listed. Included in the value of total private equity fund portfolio are gross valuations of listed investments amounting to £238.7 million (31 December 2010: £194.2 million). The Group and Company investment portfolios include Permira IV at a value of £600.7 million, which is net of a 25% provision against future distributions on the realisation of investments held by Permira IV, in accordance with the terms of the Permira IV re-organisation in December 2008. It should also be noted that the value of the Permira IV investments attributed to follow-ons that were made after 2008 are not subject to a provision, as distributions in respect of such investments will be received in full. Forward currency contracts currency Forward Interest rate swaps rate Interest Financial liabilities Forward currency contracts currency Forward swaps Currency Derivatives Other and funds Indian limited partnerships Other investments co-investments scheme co-investments Limited partnership investment companies Open-ended Listed investment trusts Public equity Private equity funds of funds of funds equity Private Private equity funds warehouse funds equity Private and co-investments funds equity private Other Group Group feeder vehicles and funds Permira equity Private • • • on: isbased value fair whose those between analysed value, atfair recognised instruments financial shows table following The 15 Fair values statements. financial Group into the consolid istherefore and rights voting 100% the of owns Company the as asubsidiary as LP. qualify India SVG does LP India SVG a100% has in also Company The activities. their from benefits toobtain as so entities these of policies operating and financial togov power havethe not Company, does The therefore, Directors. of Board relevant the of byorder or investors the of request att terminated be can agreements and/or advisory management the and Directors, of Board independent an has entity each rights, voting the of 50% than less Company owns the as interests controlling not represent do entities inthese Company’s holdings The contract. advisory investment an under services provides Limited Advisers SVG which of all for III, a23.4% Diamond and inSVG II, interest Diamond in SVG a35.6% Diamond, intere a35.5% inSVG has Company the interest Furthermore II. Fund Recovery Strategic the alongside co-invest a£13.3 and agreement to management commitment million investment an under services provides Limited Managers Investment SVG to trust investment aUK-listed plc, Capital Equity inStrategic a20.0% interest has also It agreement. management investment an under company tothat services provides Limited Managers Investment SVG 28.8%. of interest aggregate an comprise and OEIC aDublin-l (Dublin) Funds plc, Investment SVG of part form which of all Fund, European SVG the of units RClass inthe interest an AClass inthe a66.9%interest Fund, Focus UK SVG the of units IClass a35.6% inthe has interest Capital SVG addition, In 31. 30and pages on investments of in detailed are share/units of 10% of any class of more interest or an has Group Company or the inwhich investments of Details Significant interests in investment funds 14 Investments those with inputs for the instrument that are not based on observable market data (unobservable inputs) (Level 3). inputs) (Level (unobservable data market observable on based not are that instrument the for inputs with those or (derived indirectly from prices) (Level 2); and dire liability, or either asset the for observable are 1that inLevel included prices quoted than other inputs involving those 1); (Level liabilities or assets identical for markets inactive (unadjusted) prices quoted continued 221––22,261 – – 22,261 351441114901,172,962 1,134,930 4,451 33,581 130––11,320 – – 11,320 Level 1 £’000 – – ,5 4,159 – 4,159 –292– –292 –––– 01610,106 10,106 – – 14421,454 21,454 – – 4,3 147,438 147,438 – – –––– 93539,365 39,365 – – ––916,567916,567 Level 2 £’000 – – Level 3 £’000 – – 31 December 2011 £’000 Total – – 02283128521,249,657 1,218,502 883 30,272 090––10,920 – – 10,920 932––19,352 – – 19,352 Level 1 £’000 – – – –––– –883 –883 –––– 01310,173 10,173 – – 91119,161 19,161 – – ––123,689123,689 07810,748 10,748 – – 85448,564 48,564 – – ––1,006,1671,006,167 (1,471) (634) (837) Level 2 £’000 Level 3 £’000 Annual Report 2011 Report Annual – – – ctly (as ctly prices) 31 December 2010 SVG Capital plc d 49.0% terest in in terest isted isted which which the list list the ern the ern the ated ated (1,471)

(837) (634) £’000 Total st st he he

75 Financial information SVG Capital plc 76 Annual Report 2011 Notes to the accounts continued

15 Fair values continued

31 December 2011 31 December 2010

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Company £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Private equity Permira funds and feeder vehicles ––916,509916,509 ––1,005,9291,005,929 Other private equity funds and co-investments – – 39,365 39,365 – – 48,547 48,547 Private equity funds warehouse –––– – – 10,748 10,748 Private equity funds of funds – – 147,438 147,438 ––123,689123,689 Public equity Listed investment trusts 11,320 – – 11,320 10,920 – – 10,920 Open-ended investment companies 22,261 – – 22,261 19,352 – – 19,352 Limited partnership co-investment scheme – – 21,454 21,454 – – 19,161 19,161 Other investments Indian limited partnerships and funds – – 1,727 1,727 ––1,0611,061 Other –––– –––– Subsidiary investments at fair value ––9,3149,314 –9,9909,990 Derivatives Currency swaps – 4,159 – 4,159 –883–883 33,581 4,159 1,135,807 1,173,547 30,272 883 1,219,125 1,250,280 Financial liabilities Interest rate swaps –––– –(837)–(837) –––– –(837)–(837)

The Group primarily invests in private equity via limited partnerships or other fund structures. Such vehicles are typically unquoted and in turn invest in unquoted securities. The Group’s investment portfolio is recognised in the balance sheet at fair value, in accordance with IPEV Valuation Guidelines.

31 December 31 December 2011 2010 Level 3 Level 3 Group £’000 £’000 Valuation brought forward 1,218,502 871,368 Payments 21,587 112,834 Receipts (248,418) (110,738) Fair value gains 143,259 345,038 Transfers – – Valuation carried forward 1,134,930 1,218,502

31 December 31 December 2011 2010 Level 3 Level 3 Company £’000 £’000 Valuation brought forward 1,219,125 872,173 Payments 21,743 112,831 Receipts (248,130) (110,734) Fair value gains 143,069 344,855 Transfers – – Valuation carried forward 1,135,807 1,219,125

Out of the total fair value gains recognised in the Group and Company Income Statements in respect of Level 3 investments, gains of £1,239,000 relate to warehouse assets sold in the year. The remaining gains are in respect of assets held at 31 December 2011. oa te netet 5,4 149,165 1,160,074 157,544 1,168,511 Total portfolio investment investments Total other Other –Europe Other Indian funds Private equity funds of funds*** of funds equity Private Other investments: oa ulceut ud 50555,035 55,035 funds Total equity public Europe UK funds: Public equity oa rvt qiyfnswrhue–– – warehouse funds Total equity private Convertible loan notes (£101.9 notes loan Convertible million) Europe 9.10% 18 due 2015 Notes July DSenior Series Rate Fixed (£36.65 million) rvt qiyfn otoi 5,3 955,874 955,932 US warehouse**: funds equity Private portfolio fund equity Private America Total North Floating Rate Series C Senior Notes due 18 due 2014 Notes July CSenior Series Rate Floating United States** 7.72% Fixed Rate Series B Senior Notes due 18 due 20147.72% Notes July BSenior Series Rate Fixed Canada AmericaNorth Asia Total 8.49% Fixed Rate Series A Senior Notes due 18 due 2014 Notes July ASenior Series 8.49% Rate Fixed ($128.275 million) 18 due 2013 Notes July CSenior Series Rate Floating (£2.4 million) 187.57% due 2013 Notes July BSenior Series Rate Fixed (€6.9 million) 9.10% 18 due 2013 Notes July ASenior Series Rate Fixed ($116.8 million) Loan facility (€22.5 million)Loan facility Company and Group 19 (see notes sheet 20).balance and i value carrying their for basis the as used value par corresponding the with along below shown are instruments these of values I value. atfair held not are notes, loan convertible and Notes facility, Senior loan the as such Group’s instruments, The debt value atfair held not instruments financial of value Fair 1, Levels 3. 2or between transfers no were there year the During Transfers 16 analysisofinvestments Geographical Total 15 Fair values Japan Asia Pacific Asia Europe Total Europe* co-investments and funds equity Private continued 6,9 271,721 264,290 0,5 100,650 100,650 1,6 916,509 916,509 916,567 916,567 4,3 147,438 147,438 66038,966 36,650 12074,970 71,250 49644,926 44,926 47256,107 54,712 0161,727 10,106 10,109 10,109 19631,926 31,926 13831,318 31,318 Par value ,6 2,362 2,362 ,7 5,077 5,077 ,2 1,028 1,028 ,3 7,439 7,439 Group 0 608 608 £’000 £’000 –– –– –– –– –– –– –– 1Dcme 0131 December 2011 31 December 2011 Company Fair value £’000 £’000 ,5,3 1,054,476 1,054,731 ,4,7 1,239,407 1,248,774 ,0,6 1,005,929 1,006,167 1,005,929 1,006,167 2,8 123,689 123,689 3,6 124,750 133,862 3,7 337,976 335,675 1,5 110,352 114,950 66038,061 36,650 46077,039 74,600 07810,748 10,748 92919,261 19,279 19885,099 81,928 94349,433 49,433 77837,798 37,798 31143,101 43,101 0131,061 10,173 91039,150 39,150 Par value ,2 5,211 5,228 ,9 2,312 2,398 ,7 5,852 5,870 ,2 1,622 1,622 ,3 6,332 6,332 ,5 1,352 1,352 ,8 4,186 4,186 ,1 9,397 9,414 ,2 9,126 9,126 Group £’000 £’000 Annual Report 2011 Report Annual –– –– –– ndicative fair 31 December 2010 31 December 2010 SVG Capital plc n the n the Company Fair value £’000 £’000

77 Financial information SVG Capital plc 78 Annual Report 2011 Notes to the accounts continued

16 Geographical analysis of investments continued Allocations are based on the expected geographical focus of the funds. A further analysis of the estimated currency exposure of assets is provided in note 30. * Permira funds have been included in Europe, which is the primary focus of such funds, although they can and have invested a significant amount of their committed capital in businesses which have significant activities outside Europe. ** SV Life Sciences Fund III and SV Life Sciences Fund IV have been included within the US. *** Private equity funds of funds are relatively equally focused between Europe and the US. 17 Investments in subsidiaries

Year ended Year ended 31 December 31 December 2011 2010 Company Company £’000 £’000 Cost at the beginning of the year 28,711 25,963 Cash contributions 217 169 Capital contribution in respect of performance shares and options over SVG Capital shares 3,218 2,579 Cost at the end of the year 32,146 28,711 Net unrealised loss on investment at the end of the year (6,976) (6,108) Carrying value at the end of the year 25,170 22,603

Analysed as: Subsidiaries at cost 15,856 12,613 Subsidiaries at fair value 9,314 9,990 25,170 22,603

In accordance with IFRS 2, the fair value amount of options issued that have been charged in the income statements of SVG Advisers Limited (“SVGA”) and SVG Advisers Inc. are treated as a non-refundable contribution to subsidiaries and added to the cost of subsidiaries in SVG Capital’s accounts. As an investment vehicle, the Platinum Trust is included in the Company’s balance sheet at its fair value of £928,000 (31 December 2010: £889,000). Similarly, SVG India LP is an investment entity and is included in the Company’s balance sheet at its fair value of £8,386,000 (31 December 2010: £9,101,000). The other subsidiaries are operating companies rather than investment vehicles and are included at cost. SVG Advisers Limited is included at cost of £15,231,000 (31 December 2010: £12,068,000). SVG Investment Managers Limited is included at cost of £355,000 (31 December 2010: £275,000). SVG Managers Limited is included at cost of £250,000 (31 December 2010: £250,000). SVG Investments Limited is included at cost of £20,000. SVG North America Inc., SVG Advisers Inc. and SVG Advisers (Singapore) Limited Pte. are wholly-owned subsidiaries of SVGA. Subsidiary undertakings at 31 December 2011:

Profit after tax Number and Capital and for the year Country of class of reserves at ended registration, shares/units 31 December 31 December incorporation held by the Group 2011 2011 Company and business and operation Group holding £’000 £’000 The Platinum Trust (unit trust) – investment vehicle Guernsey 23,112 ‘A’ units 99% 1,028 49 900 ‘B’ units 90% SVG Advisers Limited – advisory and administration services UK 4,250,000 Ordinary Shares 100% 23,201 6,190 SVG North America, Inc. – broker/dealer US 3,000 Common Shares 100% 138 9 SVG Advisers, Inc – investment adviser US 100 Common Shares 100% 920 (120) SVG Investment Managers Limited – investment manager UK 25,000,000 ‘A’ Ordinary Shares 100% 669 (216) 5,000,000 ‘B’ Ordinary Non-voting Shares 100% SVG Managers Limited – investment manager UK 250,000 Ordinary Shares 100% 408 156 SVG Advisers (Singapore) Ltd Pte – advisory services Singapore 1,017,097 Ordinary Shares 100% 556 (48) SVG Investments Limited – investment entity UK 20,100 Ordinary Shares 100% (9) (16) SVG India LP – investment vehicle Guernsey US$32,040,980 commitment 100% 8,386 (907) Financial liabilities at fair value through profit or loss contracts currency forward Fair of value Accrued fee investment income advisory contracts currency forward Fair of value Other creditors andaccruals creditors Other Prepayments and other debtors other and Prepayments Interest payable andsimilarcharges Interest Other receivables Cash and cash equivalents Other payables Distributions receivableDistributions receivable Interest undertakings byGroup owed Amounts 18 Current assets value and are AAA-rated. AAA-rated. are and value same-d for redeemable are funds market Money rates. atfloating interest earn funds market inmoney investments and atbank Cash rates. exchange inforeign fluctuations from arising those than other in value, of risk toinsignificant subject and cash of amounts toknown convertible readily investments liquid highly are equivalents Cash funds market Money Bank balances and deposits short-term a these ‘Revenue’ recognised not have we outcome the over uncertainty some is there as but fees these recover to Weexpect as events. SVGA by future recognised been not has and deferred been has (2010:million) £2.6 million £3.2 of income fee advisory † Investment Loan facility drawings Loan facility undertakings toGroup owed Amounts 19 Current liabilities 2011. 31of €nil at December drawings outstanding total had and year the during facility the from million €22.5 totalling repayments net Company made The (see 20). note covenants subject to financial 2013.of €150 million January maturing of Tranche Bisafacility Tranche Aisafac tranches. into two split was facility loan the renegotiations, the of terms the Under AG. Bank and Unicredit plc Scotland of Bank The plc, Scotland of Bank Royal The 2011, with November facility In loan its renegotiated Company the Borrowings (Levelinputs 2), detailed in note as further 15. obs on based techniques valuation using determined are contracts rate interest and contracts currency forward of value fair The † €100 million and matures in December 2015. Both tranches are 2015. are inDecember matures €100 and million tranches Both 2,0 109,580 121,004 1,4 105,211 112,049 0871,494 10,857 51716,568 15,107 ,5 4,250 4,250 ,9 1,630 8,498 ,9 – 5,893 ,5 4,369 8,955 ,3 548 1,838 Group Group Group £’000 £’000 £’000 4 320 341 2 – 426 –– –– –762 –– –10,824 31 December 2011 31 December 2011 31 December 2011 its future recoverability is contingent on on contingent is recoverability future its Company Company Company mounts in accordance with IAS 18 18 IAS with accordance in mounts £’000 £’000 £’000 42131,616 34,241 92919,279 19,279 7117,912 17,111 ,6 5,466 5,466 ,2 5,110 9,622 , 51,615 85 7,0 ,8 , 02 2,8 7,489 ,1 573 1,711 ,2 460 9,122 ,1 – 5,114 Group Group Group £’000 £’000 £’000 4 244 244 7 – 374 Annual Report 2011 Report Annual 616 16 –– –782 –6,411 31 December 2010 31 December 2010 31 December 2010 SVG Capital plc ility ility change change ervable ervable Company Company Company £’000 £’000 £’000 ay ay

79 Financial information SVG Capital plc 80 Annual Report 2011 Notes to the accounts continued

19 Current liabilities continued Tax payable/(recoverable)

For the For the For the For the year ended year ended year ended year ended 31 December 31 December 31 December 31 December 2011 2011 2010 2010 Group Company £’000 Company £’000 £’000 Group £’000 Current tax liability/(debtor) – corporation tax Balance brought forward (3,781) – (4,196) – Corporation tax recovered 3,772 – 355 – Overseas fax paid ––(40) – Corporation tax charged to income statement (note 10(a)) ––84 – Prior year adjustment 9–16 – Balance carried forward ––(3,781) –

20 Non-current liabilities

31 December 2011 31 December 2010 Group Company Group Company £’000 £’000 £’000 £’000 Senior Notes 162,046 162,046 198,545 198,545 Convertible loan notes 90,929 90,929 101,866 101,866 Fair value of forward currency contracts ––260 – Fair value of interest rate contracts ––837 837 Deferred tax liability 22 – 3– 252,997 252,975 301,511 301,248

Non-current liabilities include £162.0 million of Senior unsecured loan Notes. Further details of the Notes are provided in the following table:

31 December 2011 31 December 2010 Group Company Group Company £’000 £’000 £’000 £’000 9.10% Fixed Rate Series A Senior Notes due 18 July 2013 (US$85.0 million) 54,712 54,712 74,600 74,600 7.57% Fixed Rate Series B Senior Notes due 18 July 2013 (€nil) ––5,870 5,870 Floating Rate Series C Senior Notes due 18 July 2013 (£1.0 million) 1,028 1,028 2,398 2,398 8.49% Fixed Rate Series A Senior Notes due 18 July 2014 (US$110.7 million) 71,250 71,250 81,928 81,928 9.10% Fixed Rate Series D Senior Notes due 18 July 2015 (£36.7 million) 36,650 36,650 36,650 36,650 Total nominal amount of Senior Notes 163,640 163,640 201,446 201,446 Unamortised issue costs (1,594) (1,594) (2,901) (2,901) 162,046 162,046 198,545 198,545

During the year, the Company repurchased and cancelled €6.9 million, US$49.3 million and £1.4 million of the original nominal amount of the Senior Notes in issue. During the year, the Company repurchased and cancelled £14.3 million of the original nominal amount of the convertible loan notes in issue. In respect of certain foreign currency borrowings, the Company has executed currency swaps to hedge the foreign exchange risk on the principal outstanding and the interest payments on a portion of the $-denominated Senior Notes. The Company has entered into agreements to effectively swap US$180 million of its Senior Notes into euro. The contracts were entered into at an exchange rate of $1.347 : €1 and mature on 18 January 2013. The fair value gain on currency swaps is included in the balance sheet as non-current investments. At 31 December 2011, the fair value gain on currency swaps was £4.2 million. of calculating the loan to value covenants for the Senior Notes and loan facility. loan and Notes Senior the for covenants tovalue loan the calculating of the for debt as counted not are facility, they loan the and Notes Senior tothe subordinated are notes loan convertible the As share. NAVper Company’s undiluted the isabove Price the Conversion dil currently not are holder. note They loan convertible the of option atthe convertible are notes loan convertible The notes. loan convertible the of Terms Conditions 2009, the and inaccordance with to £6.48 10 on amended February was Price Conversion Plac and Issue Rights (see 24). note the of aresult As reserve equity toan at£14,726,000 credited was valued amount this and 2016. option 5June on atpar conversion the Atissue redeemable are and 2008 5June on issued were notes loan convertible The costs listing and issue premium, Unamortised 2016 notes loan –nominal convertible subordinated 8.25% 1July2011, from effect With (exc to 30% LTV reduced maximum the (“SVGA”). Advisers SVG of valuation Directors’ unaudited June 30th Until to financialcovenants. issubject facility The Covenants Notes. Senior the of term account the over revenue tothe charged are costs Issue notes. rate floating of buy-back the following period the during terminated was swap The Company’s ratio. LTV the on based 2008, December from effect C2014 with amargin, plus annum 5.86% of Series per atarate the Notes under payments interes the fix toeffectively RBS with agreement 2007, swap 2August rate from into interest an entered Company the effect With notes. rate floating of buy-back the following period the during terminated was swap The Company’s ratio. LTV the on based 20 December from C2013 effect with Series amargin, 6.65% plus the of annum atarate under per Notes payments interest the fix (“RBS”) plc toeffect Scotland of Bank Royal The with agreement swap rate into interest an entered Company the 18On 2006, July liabilities 20 Non-current Non-current liabilities also include £90.9 million of convertible loan notes. Further details are provided in the following tab following inthe provided are details Further notes. loan £90.9 convertible of include million also liabilities Non-current 2011, At31 December period. month nine one for 13.4%. was the LTV continued 2011, loanto maximum value(“ the luding the SVGA valuation), SVGA luding the with 0,5 100,650 100,650 09990,929 90,929 971 (9,721) (9,721) Group £’000 31 December 2011 LTV”) covenant (includ was50% LTV”) Company the flexibility to goupto 40 flexibility the £’000 0,6 101,866 101,866 1,5 114,950 114,950 1,8)(13,084) (13,084) Group £’000 Annual Report 2011 Report Annual le: 31 December 2010 SVG Capital plc utive as as utive purposes ing, the ing, the Company ing the ing the t was was ively ively % £’000 08, 08,

81 Financial information SVG Capital plc 82 Annual Report 2011 Notes to the accounts continued

21 Capital commitments and contingencies At 31 December 2011, the Group had uncalled commitments to its fund investments as follows:

2011 2011 2010 Uncalled Uncalled Uncalled commitment commitment* commitment* (local currency) £’million £’million Permira funds Permira Europe III €6.1m 5.1 5.2 Permira IV €101.1m 84.4 92.8 P1234 €7.7m 6.4 6.6 P25 €nil – 5.7 Sapphire IV €0.3m 0.3 0.2 SVG Sapphire IV €1.7m 1.4 1.5 97.6 112.0 Other non-core private equity funds SV Investments Fund I US$3.0m 1.9 2.1 SV Life Sciences Fund III US$nil – 0.3 SV Life Sciences Fund IV US$11.1m 7.1 7.9 The Japan Fund IV ¥1,071.4m 9.1 8.4 CVC European Equity Partners V €nil – 11.3 American Capital Equity II US$2.4m 1.5 1.5 19.6 31.5 Public equity funds The Strategic Recovery Fund II £nil – 2.8 Private equity funds of funds SVG Diamond Private Equity III €18.3m 15.3 15.7 Vintage I €20.8m 17.4 24.7 SVG Asia Fund of Funds US$28.6m 18.4 20.9 Schroder Private Equity Fund of Funds III €0.1m 0.1 0.1 51.2 61.4 Other investments SVG India US$0.8m 0.5 0.2 Gaja Capital Fund US$2.0m 1.3 1.9 1.8 2.1 Total 170.2 209.8

* Based on exchange rates at the relevant year-end Commitments are payable at short notice. 3Mrh20 2 ac 05–––569.50p – – – 2015 March 22 2005 23 March 3Mrh20 2 ac 05–––564.00p – – – 2015 March 22 2005 23 March 2Mrh20 1Mrh21 492.00p – – – 11 2014 March 12 2004 March 2Mrh20 1 ac 04–––479.00p – – – 11 2014 March 12 2004 March 5Otbr20 1 coe 03–––493.00p – – – 2013 14 October 2003 15 October 3Mrh20 1 ac 03––256397.75p 2,546 – – 12 2013 March 13 2003 March 3Mrh20 2Mrh21 397.50p 335.00p – – – – – – 12 2013 March 2012 4April 13 2003 March 2002 5 April Options over shares ordinary pi 024Arl21 334.50p – – – 2012 4April 2002 5 April Closing balance of 310,407,923 of balance Closing (2010: 310,407,923) shares 1Jn 012 ue21 ,9 405.50p 3,699 – – 2011 20June 2001 21 June Issue of ordinary shares onIssue exercise of ordinary of options 1Jn 012 ue21 ,6,1 410.00p 1,163,411 – – date exercise Latest 2011 20June 2001 21 June date Issue 7,459 7,457 3,198 2,152 3,408 4,244 852 1,061 22 Share capital parties. to third any guarantees granted not has Company The Guarantees in note 5. expenses general of part as isincluded expense The lease. operating the of inrespect £856,000 year, of the expense an During years. five every reviews rent only toupward subject are terms lease The 61 Aldwych. (11 at space lease office years) along-term its over holds which Advisers, toSVG relates leases operating under obligation The 2010 at31 as December obligation lease Operating 2011 at31 as December obligation lease Operating leases: operating under obligations following the has Group The Operating leases 21 andcontingencies commitments Capital Opening balanceOpening of 310,407,923 (2010: 310,407,923) shares paid: fully upand called Allotted, continued in the year the in Options granted granted 1,169,656 – – in the year the in exercised Options 1,0 310,408 310,408 1,0 310,408 310,408 in the year the in Group £’000 Options < 1year lapsed lapsed £’000 –– 31 December 2011 Exercise price Company 1–5 years 1–5 per share £’000 £’000 number in issue 2,075,315 31 December 555,257 503,498 1,0 310,408 310,408 1,0 310,408 310,408 514,795 477,175 13,355 > 5years 4,684 3,522 3,029 Group £’000 £’000 2011 Annual Report 2011 Report Annual – – –– – 31 December 2010 SVG Capital plc number in issue

3,244,971 1,163,411 31 December 506,044 555,257 514,795 477,175 13,355 Company 4,684 3,522 3,699 3,029 £’000 £’000 2010 Total –

83 Financial information SVG Capital plc 84 Annual Report 2011 Notes to the accounts continued

22 Share capital continued

Options Options Options 31 December 31 December granted exercised lapsed Exercise price 2010 2009 Issue date Latest exercise date in the year in the year in the year per share number in issue number in issue 21 June 2001 20 June 2011 – – 3,658 410.00p 1,163,411 1,167,069 21 June 2001 20 June 2011 – – – 405.50p 3,699 3,699 5 April 2002 4 April 2012 – – 3,736 334.50p 514,795 518,531 5 April 2002 4 April 2012 – – – 335.00p 3,029 3,029 13 March 2003 12 March 2013 – – 3,309 397.75p 506,044 509,353 13 March 2003 12 March 2013 – – – 397.50p 3,522 3,522 15 October 2003 14 October 2013 – – 30,425 493.00p – 30,425 12 March 2004 11 March 2014 – – 31,731 479.00p 555,257 586,988 12 March 2004 11 March 2014 – – – 492.00p 4,684 4,684 23 March 2005 22 March 2015 – – 90,526 564.00p 477,175 567,701 23 March 2005 22 March 2015 – – – 569.50p 13,333 13,355 – – 163,385 3,244,971 3,408,356

Prior to the 2007 AGM, the Company granted options with a performance target for growth of the Company’s net asset value per ordinary share to exceed the growth in the Retail Prices Index plus 4% per annum over the three years from the date of grant (“the old option plan”). The performance target has been met for all options issued by the end of March 2005. No options were granted under the old option plan during the year (2010: nil). The range of exercise prices for options outstanding at the year end was 334.5p to 569.5p (2010: 334.5p to 569.5p). The weighted average exercise price of options in issue at the year end under the old option plan was 442.0p (2010: 430.5p). All options in issue under the old option plan will be equity-settled. Performance shares A new option plan was approved at the 2007 AGM (“performance shares”) to replace further grants of options under the old plan, other than in exceptional circumstances. Performance shares are share options with a strike price of £nil.

Performance 31 December 31 December Performance shares vested/ Performance 2011 2010 Earliest vesting/(1) shares granted exercised shares lapsed Exercise price number number Issue date exercise date(1) Latest exercise date* in the year in the year in the year per share in issue in issue 15 May 2007 15 May 2011(1) 15 May 2017 – – – 0.0p – 13 March 2008 13 March 2011(2) 13 March 2018 – – – 0.0p – 13 March 2008 13 March 2012(3) 13 March 2018 – – 28,208 0.0p – 28,208 13 March 2008 13 March 2011(2) 13 March 2018 – – – 100.0p – – 25 September 2008 25 September 2011(4) 25 September 2018 – – – 0.0p – – 25 September 2008 25 September 2012(5) 25 September 2018 – – – 0.0p 99,999 99,999 13 October 2009 13 October 2012(6) 13 October 2019 – – 25,753 0.0p 857,764 883,517 13 October 2009 13 October 2013(7) 13 October 2019 – – 25,753 0.0p 857,764 883,517 7 May 2010 13 October 2012(6) 13 October 2019 – – 109,643 0.0p 1,426,394 1,536,037 7 May 2010 13 October 2013(7) 13 October 2019 – – 109,643 0.0p 1,426,394 1,536,037 15 April 2010 15 April 2013(8) 15 April 2020 – – 151,929 0.0p 1,856,982 2,008,911 15 April 2010 15 April 2014(9) 15 April 2020 – – 247,084 0.0p 1,844,245 2,091,329 17 Februar y 2011 17 Februar y 2014 (10) 17 Februar y 2021 819,350 – 11,900 0.0p 807,450 – 17 Februar y 2011 17 Februar y 2015 (11) 17 Februar y 2021 819,350 – 11,900 0.0p 807,450 – 1,638,700 – 721,813 9,984,442 9,067,555 3Otbr20 13 October 2012 13 October 2009 3Mrh20 13 2011 March 13 2008 March 25 September 2008 25 September 2011 September 25 2008 September 25 5My20 15 2011 May 15 2007 May Issue date 22 Share capital features of options granted under either plan were incorporated into the measurement of fair value. fair of measurement into the incorporated were plan either under granted options of features outcome. actual the be notnecessarily mayalso which trends, future of isindicative volatility historical the that assumption re volatility mayoccur. that expected The patterns exercise of indicative necessarily not are and data historical on based are both under options the of lives expected The granted. were options the which upon conditions and into terms account the taking astochastic using grant dateof atthe as isestimated plans both under granted options share equity-settled of value fair The under either plan were exercised during the year. 165.1p was year the 2011 at31 during shares of December price range the 205.0p and was mid-market to279.8p.The options No payments Share-based 579.0p, and was 708.5p respectively. plan, shares performance the under granted were awards when 2008, 13 on September share 25 and 2008 March an ordinary 126.2p. was plan, of shares price The performance 13 on the share 2010, under granted were ordinary October an awards of when 170.7p. was plan, shares pr performance The 15 the on 2010, share under granted April were awards ordinary an of when The price 240.3p. was plan, shares 2011, 17 on share performance the ordinary February an of under price The granted were awards when (4) (3) (2) (1) transfers or Trust Performance condition footnotes: Benefit Employee the from transfers shares, of purchase market by satisfied be will awards these of * Vesting (11) (10) (9) (8) (7) (6) (5) 5Arl21 15 2013 April 13 2013 October 13 2012 October 15 2010 April 13 October 2013 2010 7 May 2010 7 May 13 October 2009 13 2011 March 13 2008 March 25 September 2008 25 September 2012 September 25 2008 September 25 5Arl21 15 2014 April 15 2010 April 3Mrh20 13 2012 March 13 2008 March Awards subject to stretching growth targets in the gross value of SVG Advisers Limited over three financial years to 30 June 201 June 30 to years financial three over Limited Advisers SVG of value gross the in targets growth stretching to subject Awards (“ lapsed Company have the of awards Share the per and met Value not were Asset Net targets The undiluted Company’s the in growth on based conditions performance to subject Awards Awards subject to performance conditions based on growth in the Company’s NAV over four financial years ended 30 June 2012 June 30 ended years financial four over NAV Company’s the in growth on based conditions performance to subject Awards will vest on a straight-line basis astraight-line on vest will 2 15 April ending years three over (“TSR”) Return become capable of exercise if average annual TSR is over period Shareholder equal to the Total performance in 10% and equal to or growth greater on than 20% r based conditions performance to subject Awards respectively. For performance between these two points awards will vest on a straight-line basis astraight-line on vest will awards points two these between performance For respectively. (“ Company the of Share per Value Asset Net Specifically, undiluted 0% and 100% of Company’s an award will the vest or in become capable of exercise if average annual growth NAV over on growth the performance based conditions performance to subject Awards Awards subject to stretching growth targets in the gross value of SVG Advisers Limited over three financial years of the Company the of years financial three over Limited awards have lapsed Advisers SVG of value gross the in targets growth stretching to subject Awards awards will vest on a straight-line basis 13 October ending years three over (“TSR”) Return become capable of exercise if average annual TSR is period over equal to Shareholder the performance Total 10% in and equal to or greater growth than on 20% r based conditions performance to subject Awards Awards subject to performance conditions based on growth in the Company’s NAV over four financial years ended 31 December 2011. 31 December ended years financial four over NAV Company’s the in growth on based conditions performance to subject Awards respectively. For performance between these two points awards will vest on a straight-line basis astraight-line on vest will awards points two these between performance For respectively. (“ Company the of Share per Value Asset Net Specifically, undiluted 0% and 100% of Company’s an award will the vest or in become capable of exercise if average annual growth NAV over on growth the performance based conditions performance to subject Awards two points awards will vest on a straight-line basis astraight-line on vest will awards points two 31 Dece ending years financial four over NAV vest or undiluted become capable of exercise if average annual Company’s NAV is over period equal growth the the to performance in 7% and equal to or grea growth on based conditions performance to subject Awards awards will vest on a straight-line basis 17 Februar ending years three over (“TSR”) Return become capable of exercise if average annual TSR is period over equal to Shareholder the performance Total 10% in and equal to or greater growth than on 20% r based conditions performance to subject Awards continued Earliest vesting/ exercise date (7) (7) (3) (6) (6) (2) (2) (9) (8) (5) (4) (1) (1) 5Spebr21 .p9,9 99,999 87,218 99,999 – 0.0p – 0.0p 87,218 – – – – 25 September 2018 2018 September 25 3Otbr21 ,7,6 86800 ,3,3 – 889,460 – 883,517 889,460 0.0p 883,517 1,536,037 0.0p 0.0p 1,536,037 0.0p 5,943 38,628 5,943 – 38,628 – – – – 1,574,665 13 2019 October – 1,574,665 13 2019 October 13 October 2019 13 October 2019 3Mrh21 ,1 0.p–2,319 28,208 – 28,208 526,430 0.0p – 100.0p – 2,319 0.0p – – 526,430 – – – – 13 2018 March 13 2018 March 13 2018 March 5Arl22 ,9,7 90700 ,9,2 – – 2,091,329 0.0p 2,008,911 0.0p 99,047 – 181,465 – 2,190,376 15 2020 April 2,190,376 15 2020 April Latest exercise date* exercise Latest 5My21 85200 38,512 – 0.0p 38,512 – – 15 2017 May ,3,8 ,2,3 ,6,5 2,561,606 9,067,555 1,024,133 – 7,530,082 shares granted shares granted Performance Performance in the year the in shares vested/ Performance Performance in the year the in exercised of treasury shares of treasury 1. The targets were not met and the awards lapsed awards the and met not were targets 1. The ending 31 December 2011. The targets were not met and the the and met not were 2011. targets The 31 December ending shares lapsed shares lapsed Performance Performance espectively. For performance between these two points awards awards points two these between performance For espectively. espectively. For performance between these two points points two these between performance For espectively. 013. Specifically, 0% and 100% of an award will vest or or vest will award an of 100% and 0% 013. Specifically, espectively. For performance between these two points points two these between performance For espectively. ter than 15% respectively. For performance between these these between performance For 15% than respectively. ter in the year the in period is equal to 7% and equal to or greater than 15% than greater or to equal and 7% to equal is period period is equal to 7% and equal to or greater than 15% than greater or to equal and 7% to equal is period 2012. Specifically, 0% and 100% of an award will vest or or vest will award an of 100% and 0% 2012. Specifically, y 2014. Specifically, 0% and 100% of an award will vest or or vest will award an of 100% and 0% y 2014. Specifically, NAV”) over four financial years ending 31 December 2010. 2010. 31 December ending years financial four over NAV”) NAV”) over four financial years ending 31 December 2013. 31 December ending years financial four over NAV”) NAV”) over four financial years ending 30 June 2013. June 30 ending years financial four over NAV”) mber 2014. Specifically, 0% and 100% of an award will will award an of 100% and 0% 2014. Specifically, mber The targets were not met and the awards have lapsed have awards the and met not were targets The Exercise price per share 31 December number number in issue 2010 Annual Report 2011 Report Annual No other flects the the flects SVG Capital plc model, model, 31 December number number in issue plans plans 2009 2009 ice ice

85 Financial information SVG Capital plc 86 Annual Report 2011 Notes to the accounts continued

23 Own shares 31 December 31 December 2011 2010 £’000 £’000 Opening balance (5,000) – Additions (14,334) (5,000) Closing balance (19,334) (5,000)

Own shares consist of shares in SVG Capital plc held by the SVIIT Employee Benefit Trust and the SVIIT USA Employee Benefit Trust. During the year the Trusts acquired 5,766,318 shares at a cost of £14,334,000. At 31 December 2011 the Trusts held 8,891,318 shares in SVG Capital plc (2010: 3,125,000). The market value of these shares at 31 December 2011 was £18,227,202 (2010: £6,587,500). The Trusts are funded by an interest-free loan from SVG Capital plc. 24 Reserve accounts The purpose of the various reserve accounts used by the Group is set out below. Share premium account The net proceeds of share issues in excess of the nominal value of such shares are credited to the share premium account. Capital redemption reserve This reserve represents the nominal amount of the Company’s own shares that have been purchased for cancellation. The amounts included in this reserve represent transfers from the Company’s share capital account. Share purchase reserve On 24 June 1998, the Company obtained permission from the High Court to cancel its share premium account (in existence at that date) and set up a new distributable reserve, the share purchase reserve, against which the cost of purchasing the Company’s own shares for cancellation can be debited.

31 December 31 December 2011 2010 £’000 £’000 Opening balance 92,054 92,054 Purchase of own shares into Treasury (6,775) – Closing balance 85,279 92,054

During the year the Company acquired 3,357,910 shares at a cost of £6,775,000. At 31 December 2011 the Company held 3,357,910 shares in Treasury (2010: nil). Share option reserve The Group’s share option reserve represents the fair value amounts in respect of options issued that have been charged through the income statements of SVG Advisers Limited and SVG Advisers Inc, as well as related deferred tax. The Company’s share option reserve represents the corresponding amount included in SVG Capital’s accounts as a contribution to subsidiaries (note 17). Convertible loan notes – equity This reserve represents the equity component of the convertible loan notes 2016, which were issued on 5 June 2008. At issue, the option element was valued at £14,726,000, based on £120,000,000 nominal of loan notes in issue. At 31 December 2011, the reserve balance is £12,352,000 based on £100,650,000 nominal of loan notes still in issue. Hedge reserves This reserve includes the effective portion of unrealised gains or losses on cash flow hedges. Capital reserves This reserve represents cumulative capital profits and losses. As an investment trust (defined by the Corporation Tax Act 2010), the Company is prohibited by its Articles of Association from distributing as dividend any surpluses arising from the realisation of investments. Revenue reserve As an investment company (defined by the Companies Act 2006, as amended), the Company’s revenue reserve represents its profits available for distribution. Closing shareholders’ funds – dilutive basis –dilutive funds shareholders’ Closing year the during movements reserve Other Gain attributable to equity shareholders of parent shareholders the to company equity Gain attributable for balances adjusted shareOpening changes Closing shareholders’ funds Adjustment re dilutive options Other reserve movements during the period (hedging) period the during movements reserve Other of parent shareholders the to company equity Gain attributable balances for adjusted shareOpening movements 2011: (31 shares December issue of 10,502,266 ordinary 9,067,555) 2010: £1,732,000 of (December £nil). consideration for in result would date.This sheet balance atthe exercised are share per value asset net undiluted the than lower a strike price (note shares 22) with performance and options share that assume share per values asset net diluted Company and Group The 298,158,695and on 2010: (31 December 307,282,923) end. year atthe inissue shares ordinary £1,038,733,000 2010: (31 December £945,677,000), £1,031,070,000 of assets net Company 2010: (31 December £939,556,000) parent the of shareholders toequity attributable assets net Group on based are share per values asset net the of Calculations Purchase of treasury shares Purchase of treasury Group shares Purchase of treasury Opening shareholders’ funds Group share NAV of per Reconciliation £939,556,000) 308,660,961 on and 2010: (31 December 316,350,478) end. year atthe inissue shares ordinary 2010: £1,040,465,000 of (31 December £945,677,000),shareholders £1,032,802,000 of 2010: assets (31 net Company December toe attributable assets net Group on isbased Group the of share per value asset net diluted the of calculation the Therefore, 2010 at31 dilutive not December or therefore are and 648p of price 2016 notes atastrike loan exercisable are convertible The Diluted Basic 25 Net ordinary asset valueper Purchase of own shares own of Purchase shares of performance re and lapses grants Adjustment basis –dilutive funds shareholders’ Opening Purchase of own shares own of Purchase share (“Shareholders’ funds”) 4.p345.8p 348.4p 3.p334.6p 337.1p ru Company Group 31 December 2011 ,4,6 0,6,6 337.1p 308,660,961 1,040,465 ,3,3 9,5,9 348.4p 298,158,695 1,038,733 2,0 0,6,6 300.1p 308,660,961 926,300 2,6 9,5,9 310.1p 298,158,695 924,568 4,7 0,8,2 307.8p 307,282,923 945,677 4,7 1,5,7 298.9p 316,350,478 945,677 0,4 0,6,6 35.0p 308,660,961 107,947 0,4 9,5,9 36.2p 298,158,695 107,947 1,3)(,6,1)248.6p (5,766,318) (14,334) 1,3)(,6,1)248.6p (5,766,318) (14,334) 675 33790 201.8p (3,357,910) (6,775) 675 33790 201.8p (3,357,910) (6,775) ,1 0,6,6 2.0p 308,660,961 6,218 ,1 9,5,9 2.1p 298,158,695 6,218 ,3 1,2 2.0p 517,824 1,732 ’0 Shares in issue £’000 Shares in issue £’000 –916,887 – 9.p297.0p 298.9p 0.p305.8p 307.8p ru Company Group Annual Report 2011 Report Annual 31 December 2010 the the SVG Capital plc quity quity of of NAV per share per NAV NAV per share per NAV 2011. Undiluted Undiluted Diluted Diluted

87 Financial information SVG Capital plc 88 Annual Report 2011 Notes to the accounts continued

26 Reconciliation of operating profit to net cash inflow from operating activities

Year ended Year ended Year ended Year ended 31 December 31 December 31 December 31 December 2011 2011 2010 2010 Group Company Group Company £’000 £’000 £’000 £’000 Profit before tax 107,078 105,260 326,817 322,481 Adjustments for: Gains on investments (138,488) (138,297) (351,231) (350,920) Exchange gains on other items (988) (825) (2,474) (2,898) Gain on derivatives (2,582) (3,277) 89 (883) Finance costs 38,305 38,756 39,523 39,549 Depreciation of property, plant and equipment 1,724 – 886 – Loss on sale of property, plant and equipment ––3– Share option expense 3,163 – 2,579 – Operating cash flows before movements in working capital 8,212 1,617 16,192 7,329 Decrease/(increase) in receivables (5,261) (65) 2,102 370 Increase in payables 5,350 3,487 1,258 3,746 Cash generated by operations 8,301 5,039 19,552 11,445 Taxes recovered/(paid) 3,776 4,578 279 – Interest paid (35,039) (35,490) (40,084) (40,094) Net cash used in operating activities (22,962) (25,873) (20,253) (28,649)

Purchases and sales of investments are considered to be investing activities rather than operating activities. 27 Post balance sheet events There have been no post balance sheet events that require disclosure. 28 Analysis of changes in net debt

Cash and cash Short-term Long-term Net cash/ For the year ended 31 December 2011 equivalents debt debt (debt) Group £’000 £’000 £’000 £’000 Balance brought forward 17,111 (19,279) (300,411) (302,579) Foreign exchange movements (640) 1,084 (1,867) (1,423) Amortisation of issue costs ––(2,917)(2,917) Cash flow 104,533 18,195 52,220 174,948 Balance carried forward 121,004 – (252,975) (131,971)

Cash and cash Short-term Long-term Net cash/ For the year ended 31 December 2010 equivalents debt debt (debt) Group £’000 £’000 £’000 £’000 Balance brought forward 144,067 (97,734) (320,725) (274,392) Foreign exchange movements 4,717 869 (3,866) 1,720 Amortisation of issue costs – – (2,666) (2,666) Cash flow (131,673) 77,586 26,846 (27,241) Balance carried for ward 17,111 (19,279) (300,411) (302,579) ahflw(2,4)7,8 686(24,814) 26,846 77,586 (311,778) (300,411) (129,246) (19,279) 7,912 forward Balance carried Cash flow Balance carried forward forward Balance carried Cash flow mriaino su ot 266 (2,666) (2,666) – 3,094 (3,866) – 869 6,091 of issueAmortisation costs movements exchange Foreign Company 2011 31 December ended year the For Company 2010 31 December ended year the For Amortisation of issue costs exchange movements Foreign Balance brought forward 28 innet ofchanges debt Analysis Andrew Sykes – 100,000 shares in SVG Diamond Holdings Limited Holdings Diamond inSVG shares –100,000 Remuneratio inthe included are remuneration Company. the of their of Details personnel key management only the are Directors The Limited (PCC) inSapphire shares –200,000 Company’s business. tothe issignificant that contract inany other interest any material has Director other No Limited II Holdings Diamond inSVG shares year – 500,000 prior the from unchanged are * Holdings Limited (PCC) inSapphire shares –400,000 Sykes Andrew Sinclair Charles Raeburn Denis Ferguson Nicholas Director (287,392) below: detailed group, as Capital SVG the a or managed infunds interest havean also Directors certain 35. page addition, on In (320,725) Directors the of Report inthe shown are to31 (97,734) Decemb period the during Company’s capital share in the interests family beneficial their and Company the of Directors The 131,067 Limited. Holdings Diamond toSVG inrelation observer Capital’s SVG as acts and SVGA of Director isanon-execut Sykes Andrew subsidiary. (“SVGA”), Limited awholly-owned Advisers SVG with contract aservice has Lynn Fordham Return. Total on based Shareholder awards and NAV growth on based awards between equally split were 563,900 awarded (2010: awarded shares was Lynn year The Fordham shares. During the 768,892) performance Committee. Remuneration the of discretion atthe (“PSP”) Plan Share Performance inthe toparticipate Lynn isentitled Fordham services. these for fees receive not does She invests. Company the inwhich funds Permira the of certain of Committees Advisory the of Lynn isamember Fordham Capit SVG joined since he commitments new no made and allocations Interest Carried new no received has He Scheme. Co-Investment Schr inthe participates also Ferguson Nicholas Plan. Option Share Executive the under Company bythe granted options share for afte launched funds equity private certain on Interest mayhavetoCarried he any entitlement and funds equity private existing toCarried hisentitlement of gaveupaportion 2001, inMay Plan Ferguson Option Share Nicholas Executive the of introduction funds equity private certain of inrespect Interest Carried inthe interest havean hisfamily of members and Ferguson Nicholas transactions 29 Related party forward brought Balance n Report. continued Investment in SVG Funds* SVG in Investment – 4,101 Fund Focus UK inSVG shares Limited (PCC) inSapphire shares – 200,000 plc III Funds of Fund Equity Private – 125,000 inSchroder shares plc Funds – 31,495 of Fund Equity Private inSchroder shares plc III Diamond inSVG shares – 100,000 Limited Holdings II Diamond inSVG shares – 100,000 plc III Equity Private Diamond – 150,000 inSVG shares Limited II Holdings Diamond inSVG shares – 100,000 Fund Focus UK inSVG shares – 900 plc III Funds of Fund Equity Private inSchroder shares – 250,000 plc III Equity Private Diamond inSVG shares – 1,000,000 Cash and cash cash and Cash Cash and cash cash and Cash 0,8 2295 (143,395) (252,975) – 109,580 0,7 8155,2 172,185 52,220 18,195 101,770 equivalents equivalents ,1 1,7)(0,1)(311,778) (300,411) (19,279) 7,912 12 ,8 187 (885) (1,867) 1,084 (102) £’000 £’000 ––(2,917)(2,917) Short-term Short-term Short-term Short-term £’000 £’000 debt debt Long-term Long-term £’000 £’000 debt debt Annual Report 2011 Report Annual r 2001 in return r 2001 inreturn oder Ventures oder Ventures SVG Capital plc Interest on Interest on . With the dvised by al in 2001. er 2011er Net cash/ Net cash/ (debt) (debt) £’000 £’000 ive ive

89 Financial information SVG Capital plc 90 Annual Report 2011 Notes to the accounts continued

29 Related party transactions continued The Company invests in a number of funds for which its subsidiary companies, SVG Advisers Limited (“SVGA”), SVG Managers Limited (“SVGM”) or SVG Investment Managers Limited (“SVG IM”), act as either investment adviser or investment manager and receive fees for their services. The following table details funds managed or advised by SVG IM or SVGA that are also part of SVG Capital’s investment portfolio.

Uncalled commitment Valuation Investment Manager/Adviser £’million £’million Permira feeder vehicles: P123 SVGM/SVGA – 32.6 P1234 SVGA 6.4 59.9 P25 SVGA – 67.0 Sapphire IV SVGA 0.3 0.9 SVG Sapphire IV SVGA 1.4 7.0 Generalist funds of funds: SVG Diamond Holdings SVGA – 63.6 SVG Diamond Holdings II SVGA – 34.3 SVG Diamond Holdings III SVGM/SVGA 15.3 16.1 SVG Asia Fund of Funds SVGM/SVGA 18.4 6.6 Schroder PE Fund of Funds III Schroders/SVGA 0.1 0.7 Other investments: SVG India LP PEIAL* 0.5 8.4 Public equity vehicles: SVG Focus Fund SVG IM – 12.2 SVG European Fund SVG IM – 10.1 Strategic Equity Capital plc SVG IM – 11.3 Strategic Recovery Fund II co-investment SVG IM – 21.5

* Private Equity Investment Advisers Limited (“PEIAL”) is a joint venture investment advisory company based in Mauritius in which SVGA holds a 50% interest in the equity shares SVG Capital has no employees but uses the services of its wholly-owned subsidiary, SVGA, to provide certain advisory and administrative services to SVG Capital in return for a fee of 0.5% p.a. of gross assets. The fees payable in respect of these services for the year ended 31 December 2011 amounted to £7.2 million (2010: £5.9 million). SVGA pays for all staff costs, including the remuneration costs of the Company’s executive Director, Lynn Fordham, as well as the office costs incurred in providing the services to SVG Capital. SVG Capital has an interest in SVG India LP, in which it is the sole limited partner. PEIAL, a joint venture with SVGA, provides investment advice to SVG India LP, for which it currently receives a fee of $150,000 per annum. In 2007 the Company advanced a loan of £624,000 to SVG Investment Managers Limited, for regulatory capital purposes, which remains outstanding. Interest of 5% per annum is payable on the loan. The Company has a loan of £10 million outstanding from SVGA. The loan accrues interest at a rate of 5% per annum. During the year the Company received dividends of £5.9 million from SVGA (2010: £3.4 million), £0.5 million from SVGIM (2010: £0.02 million), and £0.2 million from SVGM (£2010: £nil). There were no other distributions paid by subsidiaries during the year. At 31 December 2011 the Company had uncalled commitments of £12.8 million to two private equity funds that were intended to be warehoused for future SVGA product launches. During the year one warehoused asset was sold, releasing a £11.3 million of uncalled commitments. The only remaining warehoused fund is American Capital Equity II, with an uncalled commitment of £1.5 million. This investment is now disclosed within the core private equity funds portfolio. During the year SVGA received €1.6 million of SVG Diamond I Loan Notes and €0.8 million of SVG Diamond II Loan Notes, as part of its ongoing investment advisory fee arrangements. These Notes were purchased from SVGA by SVG Capital plc at par value on the date of issue, as the holding of investments is the main activity of the parent company. In addition, the Company received a further €0.4 million of SVG Diamond II Loan Notes in lieu of interest. As previously disclosed, the ‘Diamond Investment Scheme’ enabled staff to purchase shares in SVG Diamond II from SVG Capital. Until they have been transferred, shares remain in the name of SVG Capital but are held on trust for the beneficiaries. At 31 December 2011, the total amounts receivable by the Company under the Scheme was £0.4 million (2010: £0.5 million). Related party transactions during the year were made on terms equivalent to those that prevail in arm’s-length transactions. All financial assets are included at fair value. atfair included are assets All financial funds market money AAA-rated and deposits short-term atbank, cash of consist assets financial rate Floating debtors. short-term other and assets warehoused portfolio, Group’s the as such investment items non-monetary represent assets bearing Non-interest aaindla ,5 ,5 ,5 1,352 1,352 – – 1,352 1,352 – – Canadian dollar ninrpe––1,9 240––1,0 12,502 12,502 – – 12,490 12,490 – – rupee Indian Canadian dollar ogKn olr––11201120––1120111,280 111,280 – – 111,280 111,280 – – Hong Kong dollar Indian rupee Hong KongHong dollar igpr olr––138138––1551,525 1,525 – – 1,398 1,398 – – dollar Singapore Singapore dollar Singapore aaeeyn––2,7 016––2,7 20,176 20,176 – 149,218 141,678 – – 7,540 20,176 20,176 148,562 – 141,627 – – 6,935 yen Japanese US dollar Japanese yenJapanese uo60–8669872960–8668817,348 816,678 – 164,314 155,413 – 670 8,901 817,289 816,619 159,873 – 159,566 – 670 307 Euro Sterling at 31 December 2010: denominationCurrency of assets US dollar Euro Sterling at 31 December 2011: denominationCurrency of assets (a) assets Financial instruments Financial sterling-denominated. primarily are costs ongoing its but iseuro-denominated income fee its of majority the rat exchange inforeign 18 toinnotes 19, fluctuations and referred against tohedge used are contracts, which currency forward en has Limited Advisers SVG inissue. Notes Senior tothe respect with rates exchange foreign and rates ininterest fluctuations ag tohedge executed were 20, toinnote which referred agreements swap currency and swap rate interest the than to date, other cont any derivatives out taken not has Company The term. long the for insecurities invests Company the trust, investment an As for dividend. avai profits revenue of areduction or Group’s inthe assets net areduction ineither result would that mayoccur Events risks. certain involves objective tothis pursuant undertaken financing associated and activities investing securities, of holding The liquid. generally Company are bythe held instruments financial These operations. its from directly a that creditors and debtors as such items various and deposits short-term and cash instruments, market money holds Company the illiquid. typically are investments These specialist. equity private international aleading byPermira, advised or are managed funds equity inprivate principally byinvesting appreciation capital istoachieve objective investment Company’s primary The Financial and instruments risk profile 30 Risk

0,8 ,9,3 ,0,1 2,0 ,8,6 1,302,464 1,181,460 – 121,004 1,300,613 1,191,033 – 109,580 029–738174102,6 5,1 774,179 753,910 – 20,269 774,120 753,851 – 20,269 902–150024021027–1508245,255 145,018 – 100,237 244,072 155,050 – 89,022 Floating Floating Floating Floating ,1 ,6,0 ,7,2 711–120641,277,715 1,260,604 – 17,111 1,272,420 1,264,508 – 7,912 £’000 £’000 8 2,2 2,1 9 2,3 126,435 126,435 – 498 126,413 126,124 – 289 rate rate ––608608 ––608608 1891,3 18211,832 11,832 – – 11,839 11,839 – – 2,5 2,5 2,5 120,156 120,156 – – 120,156 120,156 – – ––528528 ––624624 2872,7 28722,877 22,877 – – 22,877 22,877 – – £’000 £’000 Fixed Fixed Fixed Fixed rate rate Non-interest Non-interest bearing bearing £’000 £’000 opn Group Company opn Group Company £’000 £’000 Total Total Total Total Floating Floating Floating Floating £’000 £’000 rate rate £’000 £’000 Fixed Fixed Fixed Fixed rate rate Non-interest Non-interest bearing bearing £’000 £’000 Annual Report 2011 Report Annual In addition, In addition, SVG Capital plc lable lable inherent inherent tered into into tered which which es, since . racts racts ainst ainst £’000 £’000 Total Total Total Total rise rise

91 Financial information SVG Capital plc 92 Annual Report 2011 Notes to the accounts continued

30 Risk continued (b) Financial liabilities The Company had £163.6 million nominal (2010: £201.4 million nominal) of Senior Notes outstanding at the year end. The Company had in place a loan facility of €250.0 million with The Royal Bank of Scotland plc, The Bank of Scotland plc and Unicredit Bank AG at 31 December 2011, which was undrawn (2010: €22.5 million drawn) at the balance sheet date. During the year, the loan facility was renegotiated. The maximum size of the facility is currently €250.0 million, of which €150.0 million matures in January 2013 and €100 million matures in December 2015. The Company had £100.7 million nominal (2010: £115.0 million nominal) of subordinated convertible loan notes in issue at the balance sheet date. The level of borrowing will impact on the Group’s performance by amplifying the effect of movements in the valuation of the investment portfolio. In addition to financial liabilities (note 20), the Company also has uncalled fund commitments (note 21) as at 31 December 2011 of £170.2 million (2010: £209.8 million), which are discussed below as part of commitment/liquidity risk. It should also be noted that fund investments and underlying investee companies may also utilise borrowings to varying degrees. This is particularly the case with respect to CLO funds and structured private equity funds of funds, which are highly leveraged vehicles. Currency denomination of the financial liabilities of the Group:

31 December 31 December 2011 2010 £’000 £’000 Sterling 141,333 152,280 Euro 113,103 161,986 US dollar 13,640 21,483 268,076 335,749

The currency exposure of liabilities is shown after adjusting for the $180 million currency swap referred to in note 20. Gross contractual cash flows* (cumulative interest and principal amounts) payable on the liabilities of the Group are as follows:

31 December 31 December 2011 2010 £’000 £’000 Loan facility drawndowns (final maturity date 17 January 2013) – 20,603 Senior Notes due 18 July 2013 63,279 101,469 Senior Notes due 18 July 2014 86,373 106,273 Senior Notes due 18 July 2015 46,655 51,658 Convertible loan notes due 5 June 2016 138,016 167,109 Other creditors 10,857 9,123 Forward currency contracts (gross payments) 28,273 31,146 Currency swaps (gross payments) 126,343 139,673 Interest rate swaps (net payments) – 1,343 499,796 628,397

* Based on exchange rates at each year end and allowing for interest rate swaps A more detailed analysis of the maturity profile of the Group’s financial assets, financial liabilities and gross-settled derivatives based on contractual undiscounted cash flows and year end exchange rates is shown below. Gross settled derivatives are calculated based on the spot prices at the year end. Financial assets at fair value through profit or loss or profit through value atfair assets Financial Accrued fee investment income advisory vial iudt/gp 0,8 ,9 1,9)67622406957,195 254,056 607,652 (11,693) 1,791 105,389 liquidity/(gap) Available amounts. principal and interest include above shown instruments debt of inrespect Payments 18 due 2013 Notes July Senior Convertible loan notes due 5 June 2016 5June due notes loan Convertible 18 due 2015 Notes July Senior Prepayments and other debtors other and Prepayments Senior Notes due 18 due 2014 Notes July Senior drawdowns Loan facility Interest receivable Interest – Net cash inflow/(outflow) cash – Net swaps rate Interest outflow cash – Gross inflow cash – Gross swaps Currency outflow cash – Gross inflow cash – Gross contracts currency Forward Derivatives 31 December 2011 andaccruals creditors Other Financial liabilities 31 December 2011 Cash and equivalents cash assets Financial 31 December 2011 Maturity analysis (Group) reali be will assets datethe expected earlier, if the dateor maturity contractual tothe period reporting the of end the from remaining the on isbased groupings into maturity analysis the assets, other For table. the below provided are which of details f assumptions, broad on isbased It such. as construed not be should and isnot aforecast It standards. accounting with comply p isprovided analysis the that only. isemphasised It purposes illustrative for table following inthe isprovided a breakdown and analysis an such 7 todisclose IFRS under is,however, It flows. arequirement cash such of timing size or precise the judge itisextremel that Beyond period. that within occur will realisations that possible itisclearly date, although sheet balance 12 within occur will month realisations or distributions no that itisassumed contrary, tothe evidence of absence inthe and, the natureof long-term the on isbased groupings into maturity loss or profit through value atfair assets financial of Analysis (maturity) assets Financial facility, i.e. 2012. the dateof 31 December expiry tothe prior quarter-end the until drawn remain an if amounts, loan outstanding that itisassumed analysis this of purposes the For covenants. loan with tocompliance subject re- tobe available be will amounts the although months, three within be will this drawdowns topay. facility required loan For Gro the inwhich period earliest tothe isallocated liability the ispaid, amount the when of achoice has acounterparty When date. maturity contractual tothe period reporting the of end the from period remaining the on based are groupings maturity The Financial liabilities (maturity) 30 Risk continued 121,004––––121,004 2,8 ,9 ,0 1,5 5,5 1,297,587 350,553 817,958 4,102 1,791 123,183 (10,857)––––(10,857) 1,6)–(550 2510 9,9)(345,180) (96,497) (215,110) (15,510) – (18,063) < 1 month < 1month < 1month < 1 month < 1month 305 305 8,2)–(86,373) – (80,323) (3,025) – (3,025) 168 168 4,1)–(46,655) – (43,319) (1,668) – (1,668) 498 498 1657 (126,343) – (116,527) (4,908) – (4,908) 363 1,6)(,7)–(28,273) – (9,271) (15,369) – (3,633) 253 253 5,5)–(63,279) – (58,253) (2,513) – (2,513) ,6 ,6 2,8 131,015 – 120,887 5,064 – 5,064 1,838––––1,838 ,4 498975–28,389 – 9,715 14,928 – 3,746 £’000 £’000 £’000 6 25 ,0 4,788 – 4,804 (285) – 269 341––––341 –––817,958350,5531,168,511 –1,7914,102 –5,893 – ––(8,304)(33,215)(96,497)(138,016) –––––– –––––– 1–3 months 1–3 months 1–3 months 1–3 months 1–3 months £’000 £’000 £’000 3–12 months 3–12 months 3–12 months £’000 £’000 £’000 1–5 years 1–5 years 1–5 years £’000 £’000 £’000 > 5 years > 5years > 5years > 5 years > 5years £’000 £’000 £’000 y difficult to to y difficult Annual Report 2011 Report Annual sed. urely to urely to SVG Capital plc s of the the s of se assets se assets therefore up can be be up can drawn, drawn, period period y, will will y, urther urther

£’000 £’000 £’000 Total Total Total

93 Financial information SVG Capital plc 94 Annual Report 2011 Notes to the accounts continued

30 Risk continued Maturity analysis (Group) < 1 month 1–3 months 3–12 months 1–5 years > 5 years 31 December 2010 £’000 £’000 £’000 £’000 £’000 Total Financial assets Cash and cash equivalents 17,111––––17,111 Interest receivable 244––––244 Prepayments and other debtors 55 617 4,525 392 – 5,589 Accrued investment advisory fee income – 4,380 291 443 – 5,114 Financial assets at fair value through profit or loss 11,966 13,567 – 856,886 367,237 1,249,656 29,376 18,564 4,816 857,721 367,237 1,277,714

< 1 month 1–3 months 3–12 months 1–5 years > 5 years 31 December 2010 £’000 £’000 £’000 £’000 £’000 Total Financial liabilities Other creditors and accruals (9,123)––––(9,123) Loan facility drawdowns – (166) (497) (19,940) – (20,603) Senior Notes due 18 July 2013 (3,720) – (3,720) (94,029) – (101,469) Senior Notes due 18 July 2014 (3,478) – (3,478) (99,317) – (106,273) Senior Notes due 18 July 2015 (1,668) – (1,668) (48,322) – (51,658) Convertible loan notes due 5 June 2016 – – (9,483) (37,934) (119,692) (167,109) (17,989) (166) (18,846) (299,542) (119,692) (456,235)

Payments in respect of debt instruments shown above include interest and principal amounts.

< 1 month 1–3 months 3–12 months 1–5 years > 5 years 31 December 2010 £’000 £’000 £’000 £’000 £’000 Total Derivatives Forward currency contracts – Gross cash inflow 3,753 – 16,660 10,342 – 30,755 – Gross cash outflow (3,856) – (16,794) (10,496) – (31,146) Currency swaps – Gross cash inflow 5,027 – 5,027 130,046 – 140,100 – Gross cash outflow (5,035) – (5,035) (129,603) – (139,673) Interest rate swaps – Net cash inflow/(outflow) (158) – (155) (1,030) – (1,343) (269) – (297) (741) – (1,307) Available liquidity/(gap) 11,118 18,398 (14,327) 557,438 247,545 820,172 the quantum and timing of returns on the Group’s invest onthe ofreturns quantum andtiming the long-term di itisvery particular, In above. outlined analysis tothe different very tobe islikely profile Group’s liquidity The actual 30 Risk create an asset that would be ex wouldbe that create anasset therefo and tomake investments used be typically will they funded are commitments these when that noted be should It years. of anumber over 2011, drawn At 31 tobe £170.2 of December commitments expected are fund which million, uncalled had Group the Uncalled fund commitments 20. innote discussed as covenants to financial 2011, at31 million December to£208.8 amounted facility loan Group’s is The and undrawn aforecast. isnot It that. than more but estimate, prudent and areasonable tobe isconsidered This years. five than more and than less 70:30 between allocated been balanc residual The flows. cash actual on based are months three within receivable amounts The value. carrying end year at their b will assets financial all that assumed simply been ithas analysis maturity the of purposes the For flows. cash expected of the isn and subjective ishighly portfolio) investment (i.e. the value atfair assets financial of inrespect analysis maturity the to fund investments are reviewed by the Board. Board. bythe reviewed are investments to fund Commit options. funding available and forecasts flow cash reviewing rigorously and byregularly risk liquidity manages Board The 2013 July in2016. repayable mature between are 2015 notes toJuly loan (see 20). note The convertible 2013 inJanuary expires (€150.0 Company’s facility loan The 2015 million) December and (€100.0 inis million). Notes Senior The commitments. uncalled their tocap elect not did that Partners to the Limited toaccrue by25%, benefit such reduced be will commitments their tocap elected that IV Permira in investors bythose receivable compa portfolio of realisation the from distributions future that require arrangements these of terms The fees. and investments (2010: €84.4 million of IV toPermira commitment follow-on €108.3 tofinance an uncalled million), called be only will which 2011 At31 total. December the of 2011. at60% 31 December had Company commitment the its tocap elected Company The at as called 56% been has which of billion, €2.4 was IV toPermira Company bythe commitment direct IV. total to Permira The commitment its toreduce Companyagreed the 2008 December In debt. Company’s senior the on ina cross-default also result commitmen afund on Adefault interest. its of sale compulsory the possibly and ininterest dilution aresultant suffer it will asaconsequence of If infull. commitments its tomeet unable be could Group the that remains risk aresidual but position financial strong Companyisinarelatively The value. carrying previous totheir discount atasignificant be could assets such of value realisation the that conditions, due. fall asthey commitments to meet required if investments, l of disposals selective consider could Board the inextremis, but, illiquid mainly are Group’s The investments securities. new arrangements lending its renegotiate could appropriate, considered if and, risk liquidity monitors Board The due. fall as they commitments fund 20, innote tomeet described as 2011,at 31 December covenants tofinancial subject on, drawn be could that u was facility, which loan million a€250 has currently Group the addition, In term. short inthe portfolio investment from the reali significant be will there that it isnot anticipated environment market current inthe although portfolio, fund the within in underlying of realisation the on received distributions and resources cash byavailable financed be will liabilities financial and funds equity toprivate Company’s commitments the circumstances, innormal and term, longer the over that isanticipated It Stock Exchange. London the on listed are shares The Company’s investors. its from requests toredemption subject not istherefore and trust investment isa‘closed-ended’ Company The £121.0of (2010: million £17.1 million) shareholder and 21. 2011, At31 December £170.2 of commitments uncalled had (2010: million Group the £209.8 million), balances tocash compared natureThe of and investing in development buy-out capital funds entails making significant financial commitments, as shown in no Borrowing and funding risks Company. bythe faced those primarily are Group b faced risks the that consider Directors below. The summarised as risks other and these managing for policy agrees and reviews Boa The risk. valuation and risk commitment tobe considered are instruments Company’s financial the from arising risks main The Risks millio £208.8 of facility loan available bythe covered continued pected to be realised for cash ov cash for realised to be pected a failure to pay a call, the Company is treated as a defaulting investor to the rel to the investor Company asadefaulting to istreated pay the afailure acall, n and the year end cash balance of £121.0 of balance cash end year the n and million. s’ funds of £1,038.7 of funds s’ (2010: million £945.7 million). In these circumstances itis circumstances Inthese er the longer te longer the er ment portfolio. As already mentioned, it is important to note itisimportant mentioned, already As ment portfolio. rm. The Group’s aremore The rm. commitments uncalled possible, dependent onprevailingm fficult to predict topredict fficult ot a forecast ot aforecast Annual Report 2011 Report Annual t would t would vestments vestments evant Fund, Fund, evant sations sations ong-term ong-term SVG Capital plc or issue or issue ndrawn ndrawn future future e realised e realised nies nies arket arket subject subject sue sue y the y the e has e has

that that ments ments is no isno other other than than re re rd rd te te

95 Financial information SVG Capital plc 96 Annual Report 2011 Notes to the accounts continued

30 Risk continued Valuation/market price risk The Company’s exposure to valuation risk comprises mainly movements in the value of its underlying investments. A breakdown of the Fund portfolio is given on pages 30 and 31 and a detailed analysis of the 15 largest underlying companies is given on pages 24 to 25. In accordance with the Company’s accounting policies, set out on pages 60 to 64, all underlying investments are valued at fair value by the Directors in accordance with the current International Private Equity and Venture Capital (“IPEV”) Valuation Guidelines. The IPEV Guidelines contain detailed methodology setting out best practice with respect to valuing unquoted investments. It should be noted that a large proportion of the Company’s underlying investee companies are expected to be unquoted and therefore the valuation of such companies involves exercising judgement. The Company does not ordinarily hedge against movements in the value of these investments. Uncertainty arises as a result of future changes in the valuation of the Company’s underlying investments, the majority of which are unquoted, and the effect changes in exchange rates may have in the sterling value of these investments. Development-stage equity investments and early-stage equity investments, by their nature, involve uncertainty as to the ultimate value likely to be realised on the disposal of those investments, particularly as their unquoted nature means that a ready market may not exist for them. As an indication of the valuation risk facing the Company, in 2011 the Group benefited from gains on its investment portfolio totalling £138.5 million (2010: gains of £351.2 million). The Company’s sensitivity to valuation risk will be affected by changes in the Company’s levels of borrowing (see note 20) and liquidity, as approved by the Board. It will also be affected by leverage in the funds in which we invest and the local currency denomination of such funds, which is considered separately under currency risk. At 31 December 2011, a 10% movement in the valuation of the Group’s aggregate investments designated as fair value through profit and loss, would result in a 11.3% (2010: 13.3%) change in Shareholders’ funds. Valuation risk will be affected by leverage in the underlying investee companies. A sensitivity analysis has been performed on the valuations of the 15 largest underlying investee companies, which had an aggregate valuation (before providing for carried interest) of £991.5 million or 95.0% of the gross private equity fund portfolio valuation (2010: £1,040.0 million or 94.8%), the results of which are set out in the table below.

Hypothetical Hypothetical fair value fair value (10% write- Fair value (10% uplift)* down)* £’million £’million £’million 31 December 2011 Gross valuation of 15 largest investee companies 991.5 1,205.4 807.0 Change in valuation/effect on income +21.6% –18.6% 31 December 2010 Gross valuation of 20 largest investee companies 1,040.0 1,309.6 764.9 Change in valuation/effect on income +25.9% –26.5%

* All investments are included in the balance sheet at fair value. Quoted companies are valued based on market prices. For such investments, a 10% movement in the valuation basis will have a 10% impact on fair value. For unquoted investments valued on a different basis, such as earnings-related, a 10% movement in the earnings of the investee company will not necessarily result in a 10% change in fair value, because of other factors such as the level of debt utilised by the investee companies The Board manages valuation risk by reviewing and approving the valuation of the private equity fund portfolio. Holdings risk In certain circumstances, the Company may wish to transfer its holdings in particular funds. In a majority of the funds in which the Company will invest, the general partner, trustee or manager has the ultimate right, similar to that exercisable by a board of a private company, to refuse to register the transfer of an interest. While the Company has no reason to believe that any request for the transfer of an interest would be refused, it is of course conceivable that the general partner’s, trustee’s or manager’s overriding fiduciary duty could result in its refusing to register a particular transfer proposed by the Company. since the contracts were entered into. Contracts have maturities of between 3 and 18 months. 18 3and months. between of havematurities into. Contracts entered since the contracts were against euro of appreciation the of aresult as contracts these of (2010: loss inrespect of £0.6 million) toequity taken was to a sale of €33.9 of to a sale (2010: million €36.4 million) for inexchange 2011 at31 in2012 December companies contracts such under amounted 2013. bysubsidiary and receivable outstanding total The fees advisory and management investment euro-denominated against hedge flow a cash toprovide primarily are These contracts rates. inexchange movements against tomitigate contracts exchange foreign into forward entered also has Group The assets. euro-deno its of value the on risk currency the against ahedge as act also would drawn, if which, facility loan a €250 million Gro The this. of inrespect £4.4 of recognised asset been value has million Afair assets. euro-denominated its of value the on outlined inAs note 9, the future of the performance Group will byPermira. advised or managed are f equity inprivate principally investments its tofocus intends Group the objective, investment current its in accordance with normally associatedrisks with making in and investments the buy-out development capital markets. However, it should be noted t red portfolio fund equity Group’s inthe private investments underlying the natureof diversified the that believe Directors The risk Concentration 30 Risk swap to effectively convert $180.0 into convert Notes Senior of million effectively swap to US$195.8 of Notes Senior issued has Group The million. decisions. investmen making when risk account this of takes but investments, its of value the affecting movements currency foreign against hedge normally not does Company The rates. exchange inforeign bymovements affected significantly be can value sterling their curr in foreign denominated are liabilities and assets its of majority since the directly risk tocurrency isexposed Group The Currency risk of AAA. rating acredit having fund each counterparties, of avariety with funds market money comprised atthe equivalents Cash counterparties. of avariety with held are deposits Group’s and date.The cash sheet balance atthe as re exposure risk credit maximum The equivalents. andcash cash its tocred issubject Group The disclosed. otherwise unless Group the within risk credit of concentrations significant no are There risk Credit 2011. at31to 8.8% December amounte swaps the and Notes the on payable rate interest average weighted The interest. of rates fixed pay Notes the of most and t as ismitigated Bonds the and Notes £101.9 million) Senior the on risk (see rate 20). note notes loan Interest convertible of 2011,At 31 December £162.0 had Group the (2010: million £198.5 deposits. short-term or atbank cash comprised assets financ rate floating Other notice. 24 than hours’ less on redeemable are funds market money The rates. atmarket interest earning at£112.0 valued funds market money (2010: million 2011, £9.6At 31 inAAA-rated December million), investments held Group the isconsidered which risk, valuation of part forms debt and investments of valuation the on changes rate interest of The effect by financed partly are many transactions as deals, profitable tosecure funds equity private of ability inthe role an important a spreads credit and rates interest level, specific Atamore growth. economic of key determinants the of one are rates Interest such toquantify itisnotpossible although funds, equity private the of valuation the on impact its through risk is indirect, tointerest exposure main the such, as and, investments its from returns capital istoachieve objective Company’s primary The totime. time from out taken be facility loan the on drawings and Notes Senior its on interest pays also It interest. deposit bank and instruments market money by Group’sThe affected be will revenue risk rate Interest approval. toshareholder issubject Objective Investment tothe change proposed The funds. alongside make co-investments mayalso Company the time, In funds. equity private leadi other of number toalimited commitments through portfolio Permira our on tobuild look will and diversified, ismore that toone investor manager single aconcentrated, from byevolving flows, Company’s cash the of management inthe flexibility better and diversity asset wider toachieve Objective Investment 2011, toits December In amendment aproposed announced Company the concentration. portfolio on investment any such of effect the of areview and commitments future and Group’s flows the of cash own consideration fund, inthe investment for conditions and terms the of consideration diligenc due extensive fund, proposed the of manager the from presentations includes This process. investment astructured with inaccordan Board bythe isconsidered proposition investment fund Each Shares. Ordinary the of price trading and value the and Comp the of performance the on effect adverse mayhavean atPermira partners or professionals key investment several or of one de the Therefore, byPermira. professionals experienced and skilled equally with replaced be can key individuals that assurance there and isnot guaranteed individuals these of service continued The personnel. its and Permira of experience and skills the ext toasignificant depends funds Permira of performance The arisk. presents portfolio investment the of concentration greater should Group’salso the be of exposures). Investors awar 31 3and (see indication an notes for weinvest inwhich funds Permira continued changes in prevailing interest rates since a rates inprevailinginterest changes £28.4 million (2010:£28.4 million £30.8 million). £0.7 of gain value Afair a euro exposure, which acts as a partial hedge against the curr the against hedge apartial as acts which exposure, a euro therefore be largely dependent on the future of performance the As described in note 20 the Company has taken out a currency acurrency out taken has Company 20the innote described As lating to cash and cash equivalents is represented by carryin isrepresented equivalents andcash tolating cash million) of Senior Notes in issue and £90.9 and (2010: inissue million million) Notes Senior of large portion of its income ordinarily der income ordinarily ofits large portion Annual Report 2011 Report Annual effects. effects. sterling sterling million million ency and and ency he Bonds he Bonds ives from ives from SVG Capital plc unds that unds that up also has up alsohas minated minated debt. debt. separately. ent upon ent upon can be no no be can lso have have lso year end end year ency risk risk ency uces the uces the it risk on on it risk e that e that that may parture parture rate g value g value ng ng

t ce ce e, e, ial ial any any hat, hat, d

97 Financial information SVG Capital plc 98 Annual Report 2011 Notes to the accounts continued

30 Risk continued A sensitivity analysis has been performed on the valuations on the effect of exchange rate fluctuations on the value of shareholders’ funds, the results of which are set out in the table below.

Hypothetical Hypothetical Equity value value shareholders’ (10% £ (10% £ funds depreciation) appreciation) £’million £’million £’million 31 December 2011 Equity shareholders’ funds 1,038.7 1,131.8 945.7 Change in shareholders’ funds/effect on income +9.0% –9.0% 31 December 2010 Equity shareholders’ funds 945.7 1,038.8 852.6 Change in shareholders’ funds/effect on income +9.7% –9.7%

Capital risk management The objective of the Company is to provide shareholders with long-term growth in capital. In pursuing this long-term objective, the Board has a responsibility for ensuring the Company’s ability to continue as a going concern. It must therefore maintain an appropriate capital structure through varying market conditions. This involves the ability to: issue and buy-back share capital within limits set by the shareholders in general; and borrow monies in the short and long term. Changes to ordinary share capital are set out in note 22. Borrowings are set out in notes 19 and 20. General risks associated with investment in private equity Investment in private equity involves a high degree of risk. The Group invests in private equity through its exposure to buy-out and development capital funds. Such investments are illiquid and as such may be difficult to realise, particularly within a short timeframe. The Directors seek to maintain a diversified portfolio of investments to mitigate these risks, although the portfolio does remain concentrated with respect to private equity fund managers and also to vintage as explained in concentration risk on page 97. Default risk A fund’s documentation generally provides for certain penalties in the event that an investor in the fund fails to meet a call. There is typically a grace period during which interest accrues on the unpaid amount. If the default continues, the investor may become subject to various sanctions, including termination of the investor’s right to participate in future investments, loss of its entitlement to distributions or income but not its liability for losses or expenses, mandatory transfer or sale of its interest, continuing liability for the principal and interest in respect of the defaulted amount and partial or total forfeiture of the investor’s interest. In addition, the general partner or manager may have other rights and remedies (including legal remedies). The investor may also remain liable for future calls in respect of the relevant fund as and when they are made. There can be no assurance as to the price which may be achieved in any mandatory transfer or sale following a default on a call. Certain funds give the general partner or manager the right to proceed directly to forfeiture proceedings following notice and continuation of default by an investor. In the case of a forfeiture, the share of the fund held by the defaulting investor would generally be allocated among the general partner or manager and the remaining investors. In addition, the investor may remain liable for the defaulted amount. Consequently, any failure by SVG Capital to meet any call may have a material adverse effect on the value of SVG Capital’s interest in a fund and/or on the net asset value of SVG Capital and/or on SVG Capital’s ability to generate returns for its Shareholders. In addition, a failure to meet a call may result in a cross-default under the Notes and the Revolving Credit Facility which could result in a substantial loss. If another investor or limited partner in a fund in which the Company holds an interest were to default on a call, this may result in the other investors (including the Company) in the fund in question becoming subject to individual calls of a larger amount (but subject to each investor’s original capital commitment) and, in addition, the fund in question may make fewer or smaller or more highly leveraged investments. Any such occurrence may lead to a reduction in the diversification of the Company’s interests in underlying portfolio companies, increase volatility, increase the Company’s financing requirements and may have an adverse effect on the Company’s business and prospects. Investment holding risk period Investment in private equity requires a long-term commitment with no certainty of return. Many of the investments made by the Group are illiquid holdings in buy-out and development capital funds and, in some cases, may not be capable of being realised in a timely manner or at all. The timing of cash distributions, if any, made by the buy-out and development capital funds is uncertain and unpredictable. Recent market conditions have made it more difficult for general partners or other managers of private equity funds to dispose of investments at attractive prices and otherwise on favourable terms. The Company considers that, although signs of improvement are present, it is likely that these difficult circumstances will ease but continue in the short to medium term and, while they do continue, it may be that the returns of the Company from its investments will be reduced and/or delayed. • • • • • • • • • • include: companies, insuch investment byan posed risks the and mayexperience, companies po the which risks The Shares. Ordinary its of value and price trading the Company and bythe earned returns the affect closely companies portfolio by the experienced risks the companies, inportfolio funds equity private through invests Company Since the risks company Portfolio time. atany one market secondary the on fund asingle of holding alarge toplace ability the mayimpact this and below explained as managers fund equity toprivate respect with isconcentrated Company’s portfolio The value. asset net at their which is at discretion. its Accordingly, the Group may not be able to in and buy-out investments development sell its capital f andbuy-out development capital funds require sometimes consent the written of the fund, of the granting partner the general of in of transfers other or sales Further, investments. equity private of sales secondary for market alimited isonly since there in andInvestments buy-out development capital funds may be difficu any. if of return timin the or grow will Company’s assets the of value the much, how so if towhether, as and assurance no be therefore can There from investments which it has made which may therefore increase increase may therefore which made ithas which investments from distribu receiving upon relying than rather finance debt with calls topay decides Company the that case the be maytherefore It arran lock-up shareholder as such restrictions tocontractual subject maybe inpart or inwhole companies portfolio in certain its torealise manager’s ability afund tothis, addition In environment. economic favourable inamore case the been otherwise rate ataslower investments its of inrespect distributions toreceive Company islikely the aresult, As improve. conditions marke until companies portfolio of disposing todelay likely more are interests holds Company the inwhich funds equity private t of managers, other or partners, general the inthat exits companies portfolio for market subdued the of consequence A further to used valueun multiples earnings comparable company public the also but companies portfolio quoted its not only on mayimpact which events, market companies. SVG Capital’s may by performance prolonged deterioration be affected weakness in or public further markets and by po underlying the of and/or valuation performance the on impact haveanegative could rates, exchange foreign or rates interest in and/or changes growth ineconomic slow-down acontinued including environment, economic inthe change material further Any 30 Risk company including,indirectly, Company. the po inthe interests equity of holders the of interests to the adverse are which actions maytake companies toportfolio lenders Company; and the indirectly, including, holders equity by the ear amounts the reduce would which providers debt from companies portfolio of assets the on claims prior tobe likely are there legal andthe incosts an increase from arising customerlosses failure, market key competition risk, developments, foreign man risk, exchange financing risk risk, cu inobtaining difficulty services, and goods of cost the matters, other amongst being, or from arising risks operating general agreement; any such under made maybe which any claims tosa vendor relevant the of ability tothe as assurance no be can there inany case, and, directly Company tothe be addressed not typically would protection contractual Such amount. and time example, in,for limited maybe these and vendors the relevant from warranties and representations limited only maycontain inquestion investment tothe relating agreements purchase the accurate; tohave been out turn practice concerningjudgements the materiality of contingent or liabilities or identified actual risks during due diligence that may not mayhavemade inquestion manager, fund the relevant of or partner, general The made. being investment toan prior conducted exerc diligence any due during provided information of accuracy or adequacy tothe as partner general the on isplaced reliance company; portfolio the holds which fund manager, relevant the other of or partner, general bythe obtained informati on rely must generally companies inthese investors and companies these about exists information public little often, forthcoming; maynotbe support and investment Such positions. competitive their maintain or finance expansions operations, their toimprove support management or operational or investment capital additional significant mayrequire they Company invested; isultimately inwhic securities equity their of value inthe byadeterioration accompanied maybe which due, fall they when debt facilities to unable maybe and resources financial mayhavelimited they less comparatively with companies for than greater far isgenerally company leveraged ahighly with associated loss of risk The and inte in in revenues, expenses increases declines multiples, earn company comparable inpublic invalue tochanges sensitive more typically are companies leveraged highly of valuations the to occur; were adefault if company insuch Company’s investment the of value the and company portfolio relevant the for consequences adverse tosevere lead would which arrangements, contractual other and financing under default of risk ahigher and covenants financial and operating stringent obligations, service debt tosignificant subject and leveraged highly maybe companies these continued quoted portfolio companies. quoted portfolio and regulatory framework within which the portfolio company operates; portfolio the which within framework and regulatory rest rates and adverse economic, market and industry development economic, rates and adverse marketrest and industry meet their obligations under their debt facilities, or torefinanc or facilities, debt their under obligations their meet the Company’s borrowings and risk and volatility for shareholde andvolatility Company’s andrisk the borrowings lt to value and dispositions ma y require a lengthy time perio terests in in terests Annual Report 2011 Report Annual than may have mayhave than SVG Capital plc unds unds gements. gements. interest interest in in h the h the rtfolio rtfolio rtfolio rtfolio stomers, stomers, t debt; tisfy tisfy s, s, he he on on e tions tions rtfolio rtfolio g ise ise will will ned ned

d rs. rs. s. s. ings ings

99 Financial information SVG Capital plc 100 Annual Report 2011 Notes to the accounts continued

30 Risk continued The value of the portfolio companies held by the funds in which the Company holds interests may be affected by uncertainties, such as political developments, changes in government policies, regulations, laws, taxation, currency fluctuations, currency repatriation and other restrictions, in some of the countries in which the funds may invest. The Company, directly or indirectly through the funds in which the Company holds interests, may also be exposed to these risks. Passive investor with limited recourse The Company is generally a passive investor and has limited powers under the governing documents of the funds in which it holds interests. The funds concerned are, within certain broad parameters, generally authorised to follow broad investment guidelines and, subject thereto, are able to invest in geographies, industries and investment opportunities at their discretion. The Company does not review each proposed investment and is, subject to certain limited exceptions, unable to refuse to meet a Call without suffering the consequences of a default. There can be no assurance that the strategies adopted by Permira or other general partners or managers of the funds in which the Company holds interests will be successful or that the portfolio companies of such funds, or the Company’s investments generally, will appreciate in value. The Company also holds some investments in funds in respect of which other members of the Group are the general partner, manager and/or adviser. In these instances, fiduciary duties are owed by the relevant members of the Group to other investors which, together with the terms of the relevant fund management or advisory agreement, mean that the relevant members of the Group are unable to submit each proposed investment for review by the Company which will, therefore, remain a passive investor in respect of the relevant fund. The Company cannot make claims against general partners or managers of the funds in which the Company invests even in cases of poor performance except in very limited circumstances typically involving severe culpability on the part of the general partner or manager. The Company’s recourse in the event of poor performance of the funds concerned is highly restricted. Removal of the general partner or manager of a fund generally requires a high level of investor participation and consent with the relevant threshold often being set so as to require the consent of holders of 75% of the capital committed to the fund in question. The Company is unlikely to be able to procure such participation and consent on its own and it may therefore be very difficult to remove a general partner or manager of a fund in which the Company invests such that the Company may potentially find itself locked into an under-performing fund. The fund documentation relating to Permira IV contains no provision for the removal of the general partner or manager by vote of the limited partners save in circumstances involving severe culpability. Even if those circumstances were to arise, which the Company considers to be unlikely, the consent of a special majority of limited partners would be required which the Company is unlikely to be able to procure on its own. Once the Company has made a capital commitment to a fund, it may be difficult to terminate its participation or reduce its capital commitment even if the investment returns arising from that fund are poor or not competitive. Regulatory risks The regulatory environment in which the Group operates is increasingly complex and the Group faces a number of regulatory risks. Breaches of regulations such as the UK Listing Authority’s Listing Rules could lead to a number of detrimental outcomes and damage the Group’s reputation. Breaches of controls by service providers could also lead to reputational damage or loss. Key regulatory risks have been identified and appropriate monitoring of such risks is undertaken regularly on behalf of the Board. Three of the Company’s subsidiaries: SVG Advisers Limited, SVG Investment Managers Limited and SVG Managers Limited are authorised and regulated by the Financial Services Authority. Certain other subsidiaries are regulated by foreign regulators. There are a number of legislative initiatives to increase regulation of the alternative investments sector including private equity. Such legislation has not been finalised, however there is a risk that such legislation, when enacted, could materially affect the business of the Company or its subsidiaries. Vintage I 3i Debt Managers 3i Debt I Vintage 13SVGA Permira IM SVG II Fund Recovery Strategic Permira Europe II P123 V imn ISVGA II Diamond SVG 13 SVGA SVGA P1234 SVG Diamond 2*SVGA P25* emr uoeIIPermira Permira Europe III emr VPermira IV Permira 31 Ten (by value) fundinvestments largest purposes. tax for trust investment an as toqualify unable being company, inits aclose result would not become which 1158 Section under Company trust the that or investment an as byHMRC approval for conditions the satisfy will Company the that in guarantee no be can However, there practice. and regulation totax changes on advice toprovide advisers tax specialist with 1158 Section of requirements c and the with itcomplies that toensure inplace controls strict has However, Group the Capital. by earned returns net the on effect adverse haveamaterial would which investments portfolio of sale the on gains realised on tocorporation Tax 1158 subject 2010 being Act Group Section Corporation of A breach inthe result could Kingdom United the of perfo its aresult, as and Group’s the of investments value the affect could practice or legislation taxation inthe change Any Taxation risk 30 Risk * 2010 valuation includes the €40 million follow-on investment in subordinated debt. The investment and accrued interest was re was interest accrued and investment The debt. subordinated in investment follow-on million €40 the includes * 2010 valuation continued Manager/Adviser paid in the period the in paid 1,051,720 600,710 118,449 32,581 26,072 63,624 21,454 59,879 34,313 67,062 27,576 £’000 2011 Annual Report 2011 Report Annual rmance. rmance. SVG Capital plc 1,120,851 ontracts ontracts SVG advance advance 632,043 103,689 120,136 55,000 54,934 28,301 35,824 21,658 50,105 19,161 tax tax £’000 will will 2010

101 Financial information SVG Capital plc 102 Annual Report 2011 Notice of Annual General Meeting

This document is important and requires your immediate attention. If you are in any doubt about the action you should take, you should consult an independent adviser authorised under the Financial Services and Markets Act 2000 in the United Kingdom, or another appropriately authorised independent adviser. If you have sold or transferred all your shares in SVG Capital plc, please send this document and the accompanying proxy form to the purchaser, transferee or agent through whom you acted for forwarding to the purchaser or transferee. NOTICE is hereby given that the sixteenth annual general meeting of SVG Capital plc will be held at 11.30 a.m. on 23 March 2012 at 61 Aldwych, London WC2B 4AE to consider and, if thought fit, pass the following resolutions (the “Resolutions”), of which Resolutions 1 to 10 will be proposed as ordinary resolutions and Resolutions 11 to 13 will be proposed as special resolutions: Ordinary resolutions 1. To receive the Report of the Directors and the audited Accounts for the year ended 31 December 2011 together with the Auditors’ report on those Accounts. 2. To approve the Remuneration Report for the year ended 31 December 2011. 3. To re-elect Nicholas Ferguson as a Director of the Company. 4. To re-elect Edgar Koning as a Director of the Company. 5. To re-elect Denis Raeburn as a Director of the Company. 6. To re-elect Lynn Fordham as a Director of the Company. 7. To re-elect Charles Sinclair as a Director of the Company. 8. To re-appoint Ernst & Young LLP as Auditors of the Company. 9. To authorise the Directors to determine the remuneration of Ernst & Young LLP as Auditors of the Company. 10. That, in substitution for all subsisting authorities, the Board be generally and unconditionally authorised to allot shares in the Company and to grant rights to subscribe for or convert any security into shares in the Company: (A) up to a nominal amount of £101,869,670 (such amount to be reduced by the nominal amount allotted or granted under paragraph (B) below in excess of such sum); and (B) comprising equity securities (as defined in Section 560(1) of the Companies Act 2006) up to a nominal amount of £203,739,340 (such amount to be reduced by any allotments or grants made under paragraph (A) above) in connection with an offer by way of a rights issue: (i) to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and (ii) to holders of other equity securities as required by the rights of those securities or as the Board otherwise considers necessary, and so that the Board may impose any limits or restrictions and make any arrangements which it considers necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter, such authorities to apply until the end of next year’s annual general meeting (or, if earlier, until the close of business on 22 June 2013) but, in each case, during this period the Company may make offers and enter into agreements which would, or might, require shares to be allotted or rights to subscribe for or convert securities into shares to be granted after the authority ends and the Board may allot shares or grant rights to subscribe for or convert securities into shares under any such offer or agreement as if the authority had not ended. Special resolutions 11. That a general meeting other than an annual general meeting may be called on not less than 14 clear days’ notice. 12. That if Resolution 10 is passed, the Board be given power to allot equity securities (as defined in the Companies Act 2006) for cash under the authority given by that Resolution and/or to sell ordinary shares held by the Company as treasury shares for cash as if Section 561 of the Companies Act 2006 did not apply to any such allotment or sale, such power to be limited: (A) to the allotment of equity securities and sale of treasury shares for cash in connection with an offer of, or invitation to apply for, equity securities (but in the case of the authority granted under paragraph (B) of Resolution 10, by way of a rights issue only): (i) to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and (ii) to holders of other equity securities, as required by the rights of those securities, or as the Board otherwise considers necessary, and so that the Board may impose any limits or restrictions and make any arrangements which it considers necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter; and (i) Registered in England and Wales No. 03066856 No. Wales and inEngland Registered 61 London WC2B 4AE Aldwych, Registered Office: Ballard Stuart Company Secretary Board the of By order 2012 February 15 (B) (A) 13. 2. (B) 1. 1. (ii) 8. 7. 6. 5. 4. 3. (C) (C) and ofexpenses; exclusive ineachcase, shares, carrying one vote each. 4,798,910 shares were held in Treasury. Therefore, the total voting rights in the Company as at as Company the in rights voting total the Therefore, Treasury. in held were 4,798,910 shares each. vote one c carrying share shares, issued Company’s the notice) this of publication the to prior date practicable latest the 2012 (being 14 at February As meeting be the at vote shall and deadline attend to relevant person the any of after members of register the to Changes meeting). adjourned the of time the before days working 2012 adjournment any of 21 March on (or, p.m. event the 6.00 in at Company the of members of register the in registered be must Company the of shareholders by exercised be only can paragraphs appl not these in does 2above 1and described paragraphs in proxies of appointment the to relation in shareholders of rights the of statement The rights voting of exercise the to as shareholder the to instructions give to aright have exerci to wish not agreement, does or right appointment proxy such no has Person aNominated If meeting. general annual the for proxy (oras a h to appointed be to aright have nominated, was he/she whom by shareholder the and him/her between agreement an informati may, enjoy to under 2006 Act Companies 146 the of Section under nominated aperson is who sent is notice this whom to person Any so do to wishes he/she if person in voting and meeting general 9below) annual the paragraph in attending (as described Instruction Proxy CREST any or instrument such other form, proxy acompleted of return The 11.30 2012 than 21 March on later no a.m. case each in www.sharevote.co.uk, at or 6DA BN99 Sussex West Lancing, Road, Spencer 121 +44 415 is 7047 number p.m., 5.30 to a.m. 8.30 helpline open Lines vary. may costs providers’ Other landline. aBT from minute per 8p cost number this to Calls for additional require you if or one, have should you that believe and form aproxy have not do you If notice. this accompanies appointment such make to used be may which form Aproxy Company. the of ashareholder be not need Aproxy shareholder. that by more than one proxy in relation to that provided the meeting annual each general proxy is appointed to atta exercise the rights To be valid any proxy form or other instrument appointing a proxy must be received by post or (during normal business hours onl hours business normal (during or post by received be must aproxy appointing instrument other or form proxy any To valid be Members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf behalf their on vote and speak to and attend to rights their of any or all exercise to aproxy appoint to entitled are Members their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf their on action appropriate the take to able be will who pro provider(s), aservice service voting or appointed have who sponsor members CREST their CREST those and members, sponsored CREST other or Members using by so do may Personal CREST service Manual. appointment CREST proxy electronic CREST the through proxies or aproxy appoint to wish who members CREST the of Company the by determination the of purpose the (and for meeting general annual the at vote and attend to To entitled be under employee share or cancelled. schemes, held in treasury as if the power had not ended. shares purchased Ordinary under contract toany such pursuant Shares Ordinary maypurchase Company the and ends power the after partly or wholly executed or completed maybe or will which Shares Ordinary topurchase into acontract mayenter Company the that so case each but in not ended. had power the if as agreement or offer any such shares) under treasury sell securities toequity be allotted (and shares to treasury be require might, or would, which into agreements enter and Company maymake offers the period this during case, ineach but, such power to apply until the end of next year’s annual general me year’s annualgeneral ofnext end the until to apply such power such power to apply until the end of next year’s annual general me year’s annualgeneral ofnext end the until to apply such power ordinary shares of £1.00 each (“Ordinary Shares”), such power to be limited: limited: tobe such power of £1.00 Shares”), shares (“Ordinary each ordinary its of 693(4) 2006) inSection Act (as Companies defined the purchases of market more or tomake one 2006 Act Companies 701 th of Section of purposes the for authorised be Company the that authorities, future or toany subsisting prejudice Without may be paid for an Ordinary Share is the highest of: of: highest isthe Share Ordinary an for paid may be paidfo may be which minimumprice the that condition by the in the case of the authority granted under paragraph (A) of resolution 10 and/or in the case of any sale of treasury shares for shares 10 treasury of any sale of (A) and/or resolution case of inthe paragraph under granted authority the of case in the (equivalent to 5% of the issued ordinary share capital of the Company as at 14 February 2012), at14 as Company the of February capital share ordinary to5% issued (equivalent the of £15,280,450 of amount uptoanominal securities (A) above) equity of paragraph under than (otherwise allotment tothe cash, Company as at 14 February 2012); at14 as Company February of45,810,791to number amaximum (equivalent Shares Ordinary share, share, ordinary per value asset net published latest tothe atadiscount Stock Exchange London the on purchase) trading proposed (at are Shares the dateof the Ordinary the if authority tothis pursuant made be mayonly purchases that condition by the preceding the day on which that Ordinary Share is contracted to be purchased; and and purchased; tobe iscontracted Share Ordinary that which dayon the preceding immediately days business five the for Share Ordinary an of value market average to5% the equal above amount an the purchase is carried out, out, iscarried purchase the the higher of the price of the last independent trade and the highest current independent bid on the trading venues where where venues trading the on bid independent current highest the and trade independent last the of price the of higher the sold) after thesold) power after ends and the Board may allot securitie equity this authority maythis authority be sold clai for to cash, satisfy transferred eting (or,eting earlier, if th until eting (or,eting earlier, if th until r an Ordinary Share is £1.00 and the maximum price which Shareis£1.00 which price maximum r anOrdinary andthe to 14.99% of the issued ordinary share capital of the ofthe to 14.99% sharecapital ordinary issued ofthe e close of business on22June e closeofbusiness e close of business on22June e closeofbusiness ms, please contact Equiniti on 0871 on 2776. Equiniti 384 contact please ms, at the meeting. A shareholder may appoint appoint may Ashareholder meeting. the at apital consisted of 310,407,923 ordinary 14 February 2012 305,609,013 were 14 February Monday to Friday. The Equiniti overseas overseas Equiniti The Friday. to Monday ched to a different share or shares held held shares or share adifferent to ched y to Nominated Persons. The rights rights The Persons. Nominated y to disregarded in determining the rights rights the determining in disregarded se it, he/she may, under any such such any may, under he/she it, se y) by hand at Equiniti, Aspect House, House, Aspect Equiniti, at y) hand by votes they may cast), shareholders shareholders cast), may they votes will not prevent a shareholder ashareholder prevent not will , 6.00 p.m. on the date which is two two is which date the on p.m. , 6.00 on (a rights “Nominated Person”) and give proxy instructions instructions proxy give and the procedures described in the ave someone else appointed) vider(s), should refer to to refer should vider(s), Annual Report 2011 Report Annual SVG Capital plc 2013) 2013) s (and s (and ms ms e

103 Company information SVG Capital plc 104 Annual Report 2011 Notice of Annual General Meeting continued

9. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications, and must contain the information required for such instruction, as described in the CREST Manual (available via www.euroclear.com/CREST). The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA19) by the latest time for the receipt of proxy appointments specified above. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means 10. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings 11. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001 12. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares 13. In the case of joint holders of a share, the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders and, for this purpose, seniority shall be determined by order in which the names appear in the register of members. A company which is a member can appoint one or more corporate representatives who may exercise on its behalf all its powers as a member, provided that they do not do so in relation to the same shares 14. Under Section 527 of the Companies Act 2006 members meeting the threshold requirements set out in that Section have the right to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company’s accounts (including the auditors’ report and the conduct of the audit) that are to be laid before the annual general meeting; or (ii) any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with Section 437 of the Companies Act 2006. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under Section 527 of the Companies Act 2006, it must forward the statement to the Company’s auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the annual general meeting includes any statement that the Company has been required under Section 527 of the Companies Act 2006 to publish on a website 15. Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such answer need be given if (a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered 16. A copy of this notice, and other information required by Section 311A of the Companies Act 2006, can be found at www.svgcapital.com 17. You may not use any electronic address provided either in this notice or any related documents (including the proxy form) to communicate with the Company about proceedings at the meeting or the contents of this notice or for any purpose other than those expressly stated Explanatory Notes to the Notice of Annual General Meeting The notes on the following pages give an explanation of the Resolutions. Resolutions 1 to 10 are proposed as ordinary resolutions. This means that for each of those Resolutions to be passed, more than half of the votes cast must be in favour of the Resolution. Resolutions 11 to 13 are proposed as special resolutions. This means that for each of those Resolutions to be passed, at least three-quarters of the votes cast must be in favour of the Resolution. The Directors believe that the proposals set out in this notice are in the best interests of the Company’s shareholders as a whole. Accordingly, the Board (other than, in the case of Resolutions 3 to 7, the Director proposed for reappointment in each Resolution), unanimously recommends that members vote in favour of each Resolution. Resolution 1: Annual Report and Accounts 2011 The purpose of this Resolution is to receive the Company’s Accounts and the Reports of the Directors and Auditors for the year ended 31 December 2011. Resolution 2: Remuneration Report The purpose of this Resolution is to approve the Directors’ Remuneration Report for the year ended 31 December 2011. This can be found on pages 37 to 43 of the Annual Report. Resolutions 3 to 7: Directors Biographical details of the Directors presenting themselves for election or re-election can be found on pages 32 and 33 of the Annual Report. Resolutions 8 and 9: Auditors The Company is required to appoint Auditors for each financial year of the Company, to hold office until the conclusion of the next general meeting at which accounts are presented. The purpose of these Resolutions is to re-appoint Ernst & Young LLP as Auditors of the Company and to authorise the Directors to agree the remuneration of the Auditors. Resolution 10: General power to allot Paragraph (A) of this Resolution would give the Directors the authority to allot shares or grant rights to subscribe for or convert any securities into shares up to an aggregate nominal amount equal to £101,869,670 (representing 101,869,670 ordinary shares). This amount represents approximately one-third of the issued share capital of the Company as at 14 February 2012 (excluding treasury shares), the latest practicable date prior to publication of this notice. In line with guidance issued by the Association of British Insurers, paragraph (B) of this Resolution would give the Directors authority to allot shares or grant rights to subscribe for or convert any securities into shares in connection with a rights issue in favour of shareholders up to an aggregate nominal amount equal to £203,739,340 (representing 203,739,340 ordinary shares), as reduced by the nominal amount of any shares issued under paragraph (A) of this Resolution. This amount (before any reduction) represents approximately two-thirds of the issued ordinary share capital of the Company (excluding treasury shares) as at 14 February 2012, the latest practicable date prior to publication of this notice. per share taking into account relevant factors and circumstances at the time. atthe circumstances and into factors account relevant taking share per the best interests of the Company, ofthe andof interests best the wo so todo when only authority this exercise will The Directors value. asset tonet discount price share the manage and review u tokeep strategy their of part as programme Company’s buy-back the tocontinue authority the toexercise intend Directors The 4,798,910 in treasury. shares he Company the notice, the of topublication dateprior 2012, practicable at14 latest As the February being capital. its share options. The Directors believe holding such shares as treasury treasury as holdingsuchshares believe Directors The options. tosati intreasury tohold shares toacquire resolution bythis provided authority the exercising consider would Directors The be sold claims for under empl to cash, satisfy transferred author this under notice). this of purchased Shares topublication dateprior 2012 practicable to 14 February latest the (being Company purcha The meetings. annual general atprevious granted authority the renewing upto14.99% Shares, topurchase Company issued the for its issought of Authority shares own of purchase market toundertake 13: Authority Resolution 2013 of22June earlier at the expire will andth authority The shareholders. with 7.5% consultation prior without place not take should us cumulative regarding Principles Group’s of Statement Pre-Emption the tofollow intention their confirm Directors the amount, nominal aggregate this of respect n this of topublication dateprior 2012, at14 as Company practicable the of latest February the capital share ordinary issued £15,280,450 of amount up toanominal 15,280,450 5% (representing approximately the of represents shares). amount nominal This necessary, considers otherwise Board the as or securities those of rights by the required if securities equity other of holders offer and offers pre-emptive with inconnection sales or toallotments limited (A) be (B) and would inparagraphs authority The securities. equity relevant the of issue the of pricing date of atthe per share as net estimated tothe premium effective atan allotted be will authority this under allotted securities any equity that Board intention isthe It purposes. corporate general for and funds new of launch the through arising opportunities of advantage take inraising 12 flexibility (B) toprovide Resolution of inorder toinparagraph referred authority the seeking are Directors The so. todo to shareholders itisadvant 12 believe they (A) Resolution of whenever toinparagraph referred authority the toexercise intend Directors The tothem to shareholdings. shareholders in their existing existing proportion fi without cash for intreasury) tohold mayelect Company the which (or any shares shares sell toallot authority the Directors infavour. cast w It tobe votes a75% the of requires which majority resolution, aspecial as proposed be will Resolution This Resolution 12: General power to disapply rights pre-emption meeting. that for shareholders toall available voting electronic of make ameans must Company the notice, 21 than clear less on meeting ageneral tocall able tobe inorder that, mean 2006 Act Companies tothe changes the that Note a shareholders of advantage to the tobe isthought and meeting the of business bythe ismerited flexibility the where only but suc for routine of amatter as used be not would period notice shorter The proposed. be will resolution asimilar that intended ability, 11 Resolution such approval. seeks other than an annual general meeting on14 meeting anannualgeneral than other mee general tocall able 2009, was Company the 3August on Regulations Rights Shareholders’ into the of coming force the Before continue to will meetings general days. (Annual 14 than less cl be however cannot which period, notice ashorter approve Shareholders to21 Company unless the of days meetings by 2006 Act Companies to made the Changes Resolution 11: Notice of general meetings intreasury). held (excluding inissue shares capital share 1.57% ordinary Company’s representing in treasury, total the of 4,798,910 held Company the notice, this of s topublication dateprior 2012, practicable 14 atthe latest the As February being Company in2013. held ofthe meeting annualgeneral of the 2013 June 22 of earlier atthe concl the expire and will (A)Resolution (B) this and of paragraphs under sought authorities The cases). incertain re-election for standing Directors the regards as (including use their concerning In British of Association the from recommendations tofollow intend Directors the authorities, the exercise do However, they if (A) Resoluti (B) this and of paragraphs under sought authorities the any of toexercise intention present haveno Directors The age of authorities within a rolling 3-year peri arolling3-year within age ofauthorities The approval will be effective until the Company’s next annual general meeting, whe meeting, Company’s annualgeneral the until next effective be approval will The its Shareholders generally, and Shareholders its clear days’ notice without ob clear days’ notice without the Shareholders’ Rights Regulations increase the notice period required for general for general required notice period the increase Regulations Rights Shareholders’ the sed 4,798,910sed peri inthe Shares Ordinary be held on at least 21 onat held least be cleardays’ notice.) oyee share or cancelled. schemes, held in treasury e conclusion of the annual general meeting of the Company i ofthe held meeting annualgeneral e conclusion ofthe shares will provide the Company with increased flexibility inman flexibility Company increased the with provide will shares could be expected to result in an increase in the net inthe inanincrease to result expected could be taining such shareholder appr suchshareholder taining od where the Principles Principles the where od od from the last annual general meeting meeting annualgeneral last the from od provide that usage in that usage provide oval. In order to preserve oval. Inorder Annual Report 2011 Report Annual or otherwise monies to to monies ould give the ould give the set value value set SVG Capital plc sfy share share sfy otice. In In otice. ld ld h meetings, h meetings, excess of ity may may ity usion usion ageous ageous rst offering asset value value asset on. on. surers surers s awhole. hares hares uld be in in uld be of the of the s to s to aging aging n 2013. n it is n itis days’ days’ this this nder nder tings tings ear ear

105 Company information SVG Capital plc 106 Annual Report 2011 Notice of Annual General Meeting continued

The minimum price, exclusive of expenses, which may be paid for a share is £1.00. The maximum price, exclusive of expenses, which may be paid for a share is the highest of (i) an amount equal to 5% above the average market value for a share for the five business days immediately preceding the date of the purchase and (ii) the higher of the price of the last independent trade and the highest current independent bid on the trading venues where the purchase is carried out. The total number of options to subscribe for ordinary shares outstanding at 14 February 2012 was 12,059,757, which represented approximately 3.95% of the issued ordinary share capital (excluding treasury shares) at that date. If the Company were to purchase the maximum number of ordinary shares permitted by this resolution then the options outstanding at 14 February 2012 would represent approximately 4.64% of the issued ordinary share capital (excluding treasury shares). The Directors intend to continue to purchase ordinary shares under the existing authority prior to its expiry on 23 March 2012. The authority will expire at the earlier of 22 June 2013 and the conclusion of the annual general meeting of the Company held in 2013. 020 7010 8900 or contact [email protected]/ www.svgcapital.com/capital/invrelations/shareholder_services visit: please information, further require you Should www.shareview.co.uk on: free details your register Please • • • • features include: Its shares. your regarding required information the all provides Equiniti, registrar, our from service ‘Shareview’ online The documents. shareholder receiving of way friendly environmentally more and isafaster This copy format. hard of instead notification byemail or website our via electronically, documents shareholder toreceive shareholders like toencourage would Capital SVG (0)121 +44 call please overseas, from calling 415If 7047. 8.30 a.m.to5.30 open toFr p.m., Monday Lines mayvary). costs providers’ other landline, aBT minutefrom per 8p cost number is0871 Registrars Equiniti of 2776 number 384 telephone (calls helpline The toth 6DA. BN99 Sussex West Lancing, Road, Spencer atAspect Registrars toEquiniti directed be should amendment other or address of achange including holdings, share registered aremailed shareholders Communications with andE-communications for shareholders services Registrar Secretary. Company the from byrequest also and website the on isavailable and quarterly ispubli investments Company’s largest the and portfolio the of diversification the including information containing A factsheet year. each 31and December at as review portfolio investment afull with accounts publishing Company the with quarterly, iscalculated value asset net The Times. The and Telegraph Daily the Times, Financial inthe daily is quoted s the of price The isSVI. shares the for code exchange stock The Stock Exchange. London the on listed are Company’s shares The Information for shareholders taxation purposes. Tax 1158 2010. Act for company Corporation Section aclose isnot of Company The Kingdom United purposes the the of for trust invest approved an as tocontinuing aview with itself conducts Company the tax gains capital from exemption toobtain order In 2006. 833 Act Companies Section of the of meaning the within company investment an as business on Companycarries The Stock Exchange. London the on listed business management fund and investor equity isaprivate plc Capital SVG The Company Company summary and E-communications for shareholders ‘shareholder reference’ printed on your proxy form or dividend notices, and knowledge of your registered address. address. registered your of knowledge and notices, dividend or form proxy your on printed reference’ ‘shareholder To shareholdercommunicationselectr receive online. instructions payment dividend or address your tochange ability The details. dividend and movements share recent including register share the on you for held todata access Direct to option shareholdercommunicat receive The to the address held on the shareregister heldonthe address to the onically in future, including all reports infuture, includingallreports onically ions electronically instead of by post. ofby instead post. ions electronically and notices of meetings, you just need th need you just ofmeetings, and notices . Any notifications and enquiries relating relating andenquiries notifications . Any Annual Report 2011 Report Annual SVG Capital plc 30 June 30June shed shed e House, to to hares hares ment ment iday. is is

107 Company information SVG Capital plc 108 Annual Report 2011 Advisers

Head office Registrar for ordinary shares 61 Aldwych Equiniti Limited London WC2B 4AE Aspect House Telephone 020 7010 8900 Spencer Road Fax 020 7010 8950 Lancing www.svgcapital.com West Sussex BN99 6DA Telephone 0871 384 2776* Secretary and registered office Overseas helpline +44 121 415 7047 Stuart Ballard Website www.shareview.co.uk 61 Aldwych *Calls to this number cost 8p per minute from a BT landline. London WC2B 4AE Other telephone providers’ costs may vary. Lines open 8.30 a.m. to 5.30 p.m. Monday to Friday. Telephone 020 7010 8900 Auditors Solicitors Ernst & Young LLP Slaughter and May 1 More London Place One Bunhill Row London SE1 2AF London EC1Y 8YY Bankers Brokers and financial advisers Lloyds TSB Bank plc J.P. Morgan Cazenove 10 Gresham Street 20 Moorgate London EC2V 7AE London EC2R 6DA The Royal Bank of Scotland plc Numis Securities Corporate Banking Office The London Stock Exchange Building 5–10 Great Tower Street 10 Paternoster Square London EC3P 3HX London EC4M 7LT Unicredit Bank AG, London Branch Execution Noble Moor House 10 Paternoster Square 120 London Wall London EC4M 7AL London EC2Y 5ET

Financial calendar

31 December Company’s year end February Preliminary results for the financial year announced February Annual Report published March Annual General Meeting April 31 March NAV published 30 June Company’s half year August Half-yearly results announced August Half-yearly report published October 30 September NAV published SVG Capital plc Annual Report 2011 109 Glossary of terms

Early-stage Distributions Seed: Payments to investors after the realisation of investments of the Financing provided to allow a business concept to be developed, perhaps partnership. involving production of prototypes and additional research, prior to bringing a product to market. Divestments (or realisations or exits) Start-up: Exits of investments, usually via a trade sale or an IPO (Initial Public Financing provided to companies for the use in product development Offering) on a stock market. and initial marketing. Companies may be in the process of being set up or may have been in business for a short time, but have not sold their product commercially. Draw downs/calls Other early-stage: Payments to the partnership by investors in order to finance investments. Financing provided to companies that have completed the product Funds are drawn down from investors on a deal-by-deal basis. development stage and require further funds to initiate commercial manufacturing and sales. They will not yet be generating profit. Fund of funds Private equity funds whose principal activity consists of investing in other Late-stage private equity funds. Investors in funds of funds can thereby increase their Expansion financing: level of diversification. Capital provided for the growth and expansion of a company which is breaking even or even trading profitably. Funds may be used to finance increased production capacity, market or product development and/or Gearing, debt/equity ratio or leverage provide additional working capital. Capital provided for turnaround The level of a company’s borrowings as a percentage of shareholder funds. situations is also included in this category. Management Buy-Out (MBO): Hurdle rate Funds provided to enable current operating management and investors Arrangement that caps the downside risk for investors. It allows investors to acquire an existing business. to get preferential access to the profits of the partnership. In the absence Management Buy-In (MBI): of reaching the hurdle return, general partners will not receive a share of Funds provided to enable a manager or group of managers from outside the profit (carried interest). A hurdle rate of 10% means that the private the Company to buy into the Company. equity fund needs to achieve a return of at least 10% before the profits are shared according to the carried interest arrangement. Follow-on investment A company which has previously received private equity. Limited partnership Most private equity firms structure their funds as limited partnerships. Investors represent the limited partners and private equity managers Secondary purchase the general partners. Purchase of existing shares in a company from another private equity firm, or from other shareholders. Realisation The sale of an investment. Public to private Purchase of the share capital of a company quoted on a stock exchange with the intention of de-listing the company and taking it private. Secondary market The secondary market enables institutional investors to sell their stakes in a private equity partnership before it is wound up. General Terms Carried interest (“carry”). Trade sale Carried interest or simply “carry” represents the share of a private equity Sale of the equity share of an investee company to another company. fund’s profit (usually 20%) that will accrue to the general partners. Committed funds (or “raised funds” or “committed capital”) is capital committed by investors. This will be requested or ‘drawn down’ by Turnaround private equity managers on a deal-by-deal basis. This amount is different A loss-making company which can be successfully transformed into from invested funds for two reasons. Firstly, most partnerships will invest a profit maker. only between 80% and 95% of committed funds. Second, one has to Further information on our website deduct the annual management fee which is supposed to cover the cost of operation of a fund. www.svgcapital.com Company information Company SVG Capital plc Head office 61 Aldwych London WC2B 4AE Telephone 020 7010 8900 Fax 020 7010 8950 www.svgcapital.com

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