Harwood Private Equity LLP

ITEM 5: FEES AND COMPENSATION

   a) Compensation

Harwood receives a management fee for from each fund it manages. This management fee is
payable quarterly in advance and is equal to 2% per annum of total commitments in the funds. In
addition, Harwood is entitled to a performance fee (carried interest) of 20% of the Partnership
Profits. This performance fee is only paid once investors have received their Preferred Return
and their Capital Contributions have been fully repaid.

Harwood values its assets in line with the International Private Equity and Venture Capital
Valuation (IPEV) Guidelines, ensuring consistency, transparency, and fairness in financial
reporting and investment decision-making. These guidelines, widely recognized across the
private equity industry, establish best practices for valuing private equity and venture capital
investments.

Valuation Methodologies Used by Harwood Private Equity

In accordance with the IPEV Guidelines, Harwood Private Equity employs the following
methodologies to determine the fair value of its assets:

Market Approach

   •   Comparable Company Multiples: Investments are valued by applying relevant market
       multiples (e.g., EV/EBITDA, P/E ratios) derived from comparable publicly traded
       companies or precedent transactions. Adjustments may be made to reflect differences in
       size, growth prospects, and risk profile.

   •   Recent Transaction Price: If a recent transaction involving the investment has occurred
       under market conditions, this price may serve as an indicator of fair value, provided there
       have been no significant changes in the business environment.

Income Approach

   •   Discounted Cash Flow (DCF) Analysis: Future expected cash flows of the investment are
       projected and discounted back to their present value using an appropriate discount rate

       that reflects the investment’s risk profile and market conditions. This method is
       particularly useful for businesses with stable and predictable cash flows.

Cost Approach

   •   Net Asset Value (NAV) Method: This approach is used where the value of a company's
       assets, such as real estate or tangible assets, provides a reliable indication of fair value.

Harwood Private Equity follows the principle that fair value should reflect the price at which an
orderly transaction would take place between market participants at the measurement date, rather
than a forced or distressed sale price. The firm regularly reviews and updates valuations,
considering market trends, financial performance, and external economic factors.

By adhering to the IPEV Guidelines, Harwood Private Equity ensures its valuation practices
remain robust, transparent, and aligned with international best practices, providing investors with
a clear and accurate representation of asset values.

   b) Billing

Fees are automatically deducted from the Funds.

   c) Other Expenses

The funds incur additional expenses beyond the Firm’s management fees. These expenses are
categorized into two main types:
   1. Establishment Costs: The Partnership is responsible for covering all (or its proportionate
      share) of the costs related to setting up the Partnership and any associated parallel funds.
      These costs include travel, legal and accounting fees, printing, postage, reasonable out-
      of-pocket expenses of the Manager, marketing, and other establishment expenses.
      However, placement agent commissions must be paid by the Manager. The total
      establishment costs covered by the Partnership are capped at £1,000,000 (excluding
      applicable taxes).
   2. Ongoing Business and Investment Costs: The Partnership must also bear all (or its
      proportionate share) of the fees, costs, and liabilities incurred in running the business and
      managing investments. This includes expenses related to investment activities (such as
      due diligence, acquisition, monitoring, and sale of investments), administration,
      compliance, legal and audit fees, reporting, custodian fees, and insurance premiums.
      Additionally, costs for external consultants, meetings, bank charges, borrowing costs, and
      extraordinary expenses like litigation are also covered.
Exclusions
The Partnership is not responsible for:

   •   General operating costs of the General Partner or Manager, such as salaries, rent,
       utilities, and employee expenses (which are covered by the Priority Profit Share).
   •   Expenses that can be recovered from companies in which the Partnership has invested
       (or plans to invest).
The Partnership bears only those costs directly related to its formation, operations, and
investment activities, while excluding overheads of the General Partner and recoverable
expenses.

   d) Advance Billing

As discussed above, with respect to the Harwood Funds the management fee is payable in
advance. Fees are not refundable.

   e) Sales-based Compensation

Not applicable. Neither the Firm nor any of its employees or affiliates accepts additional
compensation for the sale of securities or other services or other investment services or products.

ITEM 7: TYPES OF CLIENTS

Harwood is responsible for Managing Investments for certain Private Equity Funds (the
“Funds”) organized as limited partnerships in the United Kingdom which are Authorised and
Regulated by the Financial Conduct Authority (FCA) and the funds are generally not registered
with the SEC. The Funds qualify for exemption from the definition of an “investment company”
under the Investment Company Act of 1940, as amended (the “Investment Company Act”) under
Section 3(c) (1) or Section 3(c) (7) of the Investment Company Act, and the Adviser offers
interests to Investors pursuant to Regulation D under the Securities Act of 1933, as amended (the
“1933 Act”).

Fund investors are qualified investors, such as state and corporate pension plans, university
endowments, wealthy families and individuals, and funds of funds, for investment in our Funds.
Generally, the minimum commitment to a Fund was $5,000,000. However, the minimum initial
investment in a Fund can be waived by the General Partner.