Common use of Valuation of Investments Clause in Contracts

Valuation of Investments. Investments are included in the accounts at their fair value as at the reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All prices in foreign currency are translated into sterling at the prevailing rate on the last working day of March. An investment asset is recognised in the Net Assets Statement on the date the Fund becomes party to the contractual acquisition of the asset. From this date any gains or losses arising from changes to the fair value of the asset are recognised by the Fund. The values of investments as shown in the Net Assets Statement have been determined as follows: • quoted equity securities and fixed interest securities traded on an exchange are accounted for at bid market price; • index linked securities traded on an exchange are valued at bid market value; • unitised managed funds are valued at the closing bid price if bid and offer prices are reported by the relevant exchange and in the Investment Manager’s valuation report. Single priced unitised managed funds are valued at the reported price; • unitised, unquoted managed property funds are valued at the most recently available net asset value adjusted for cash flows, where appropriate, or a single price advised by the fund manager; • Each of the partners in Border to Coast Pension Pool (BCPP) have an equal shareholding in BCPP which have been valued at cost i.e. transaction price, as an appropriate estimate of fair value. This is reviewed and assessed each year. Relevant factors include that there is no market in the shares held, disposal of shares is not a matter in which any shareholder can make a unilateral decision, and the company is structured as to not make a profit. As at 31 March 2022, taking into consideration the audited accounts for the company at 31 December 2021, there is also no evidence of any impairment in the value of shares held. It has therefore been determined that costs remain an appropriate proxy for fair value at 31 March 2022. All investments managed by BCPP are valued at their fair value; • investments in private equity funds, private credit funds and unquoted infrastructure funds are valued based on the fund’s share of the net assets in the private equity fund, private credit fund or infrastructure fund using the latest financial statements published by the respective fund managers, adjusted for cashflows; and • derivative contracts outstanding at the year-end are included in the Net Assets Statement at fair value (as provided by Investment Managers) and gains and losses arising are recognised in the Fund Account as at 31 March. The value of foreign currency contracts is based on market forward exchange rates at the reporting date. The value of all other derivative contracts is determined using exchange prices at the reporting date. Where Investment Managers are unable to supply investment valuations in line with the above policies, valuations will be included as supplied by the Investment Manager, usually at mid-market price. Cash and Cash Equivalents Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with insignificant risk of change in value. Contingent Assets A contingent asset arises where an event has taken place that gives a possible asset which will only be confirmed by the occurrence of uncertain future events not wholly within the control of the Fund. Contingent assets are not recognised in the Net Assets Statement however details are disclosed in Note 22. Investment Transactions Investment transactions arising up to 31 March but not settled until later are accrued in the accounts. All purchases and sales of investments in foreign currency are accounted for in sterling at the prevailing rate on the transaction date. Actuarial present value of promised retirement benefits The actuarial present value of promised retirement benefits is assessed on a triennial basis by the scheme actuary in accordance with the requirements of IAS 19 and relevant actuarial standards. As permitted under IAS 26 the Fund has opted to disclose the actuarial present value of promised retirement benefits by way of a note to the accounts (Note 24). Additional Voluntary Contributions (AVCs) The Fund provides an additional voluntary contribution (AVC) scheme for its members, the assets of which are invested separately from those of the Fund. In accordance with LGPS Regulations, AVCs are not recognised as income or assets in the Fund Accounts, however a summary of the scheme and transactions are disclosed in Note 20 to these accounts. If, however, AVCs are used to purchase extra years’ service from the Fund, this is recognised as contribution income in the Fund’s accounts on an accruals basis. Amounts received in this way can be found in Note 8 as additional contributions from members. Prior Period Adjustments Prior period adjustments may arise as a result of a change in accounting policies or to correct a material error. Material errors discovered in prior period figures are corrected retrospectively by amending opening balances and comparative amounts for the prior period.

Valuation of Investments. Investments are included in the accounts at their fair value as at the reporting date. Fair value is the price that would be received to sell for which an asset could reasonably be exchanged, or paid to transfer a liability settled, in an orderly transaction between arm’s length transaction. In the case of marketable securities fair value is equal to market participants at value. Market value is the measurement datebid price quoted in an active market for securities and unitised investments. All prices in foreign currency are translated into sterling at the prevailing rate on the last working day of March. An investment asset is recognised in the Net Assets Statement on the date the Fund becomes party to the contractual acquisition of the asset. From this date any gains or losses arising from changes to the fair value of the asset are recognised by the Fund. The values of investments as shown in the Net Assets Statement have been determined as follows: • quoted Quoted equity securities and fixed which are traded on an exchange are accounted for on a bid market price basis, where Investment Managers provide valuations in this manner; • Fixed interest securities that are traded on an exchange are accounted for at bid market priceprice where Investment Managers provide valuations in this manner; • index Index linked securities traded on an exchange are valued at bid market valuevalue where Investment Managers provide valuations in this manner; • unitised managed funds Unitised securities are valued at the closing bid price if bid and offer prices are reported by the relevant exchange and in the Investment Manager’s valuation report. Single priced unitised managed funds securities are valued at the reported price; • unitised, unquoted managed property funds Unquoted equity investments are valued included based on an estimated price of the investments held. Valuation techniques are used to establish a price at the most recently available net asset value adjusted for cash flows, where appropriate, or a single price advised by the fund manageryear end date based on an arm’s length exchange given normal business considerations; • Each of the partners in Border to Coast Pension Pool (BCPP) have an equal shareholding in BCPP which have been valued at cost i.e. transaction price, as an appropriate estimate of fair value. This is reviewed and assessed each year. Relevant factors include that there is no market in the shares held, disposal of shares is not a matter in which any shareholder can make a unilateral decision, and the company is structured as to not make a profit. As at 31 March 2022, taking into consideration the audited accounts for the company at 31 December 2021, there is also no evidence of any impairment in the value of shares held. It has therefore been determined that costs remain an appropriate proxy for fair value at 31 March 2022. All investments managed by BCPP are valued at their fair value; • investments in private equity funds, private credit funds and unquoted infrastructure funds are valued based on the fund’s share of the net assets in the private equity fund, private credit fund or infrastructure fund using the latest financial statements published by the respective fund managers, adjusted for cashflows; and • derivative Derivative contracts outstanding at the year-year end are included in the Net Assets Statement at fair value (as provided by Investment Managers) and gains and losses arising are recognised in the Fund Account as at 31 March. The value of foreign currency contracts is based on market forward exchange rates at the reporting date. The value of all other derivative contracts is determined using exchange prices at the reporting date. Where Investment Managers are unable to supply investment valuations in line with the above policies, valuations will be included as supplied by the Investment Manager, usually at mid-market price. Cash and Cash Equivalents Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with insignificant risk of change in value. Contingent Assets A contingent asset arises where an event has taken place that gives a possible asset which will only be confirmed by the occurrence of uncertain future events not wholly within the control of the Pension Fund. Contingent assets are not recognised in the Net Assets Statement however details are disclosed in a Note 22to the Accounts. Investment Transactions Investment transactions arising up to 31 March but not settled until later are accrued in the accounts. All purchases and sales of investments in foreign currency are have been accounted for in sterling at the prevailing rate on the transaction date. Actuarial present Acquisitions Costs of Investments Acquisition costs of investments are added to book cost at the time of purchase. Financial liabilities The Fund recognises financial liabilities at fair value as at the reporting date. A financial liability is recognised in the net assets statement on the date the Fund becomes party to the liability. From this date any gains or losses arising from changes in the fair value of promised retirement benefits The actuarial present value of promised retirement benefits is assessed on a triennial basis the liability are recognised by the scheme actuary in accordance with the requirements of IAS 19 and relevant actuarial standards. As permitted under IAS 26 the Fund has opted to disclose the actuarial present value of promised retirement benefits by way of a note to the accounts (Note 24). Additional Voluntary Contributions (AVCs) The Fund provides an additional voluntary contribution (AVC) scheme for its members, the assets of which are invested separately from those of the Fund. In accordance with LGPS Regulations, AVCs are not recognised as income or assets in the Fund Accounts, however a summary of the scheme and transactions are disclosed in Note 20 to these accounts. If, however, AVCs are used to purchase extra years’ service from the Fund, this is recognised as contribution income in the Fund’s accounts on an accruals basis. Amounts received in this way can be found in Note 8 as additional contributions from members. Prior Period Adjustments Prior period adjustments may arise as a result of a change in accounting policies or to correct a material error. Material errors discovered in prior period figures are corrected retrospectively by amending opening balances and comparative amounts for the prior period.

Valuation of Investments. Investments are included in the accounts at their fair value as at the reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All prices in foreign currency are translated into sterling at the prevailing rate on the last working day of March. An investment asset is recognised in the Net Assets Statement on the date the Fund becomes party to the contractual acquisition of the asset. From this date any gains or losses arising from changes to the fair value of the asset are recognised by the Fund. The values of investments as shown in the Net Assets Statement have been determined as follows: • quoted equity securities and fixed interest securities traded on an exchange are accounted for at bid market price; • index linked securities traded on an exchange are valued at bid market value; • unitised managed funds are valued at the closing bid price if bid and offer prices are reported by the relevant exchange and in the Investment Manager’s valuation report. Single priced unitised managed funds are valued at the reported price; • unitised, unquoted managed property funds are valued at the most recently available net asset value adjusted for cash flows, where appropriate, or a single price advised by the fund manager; • Each of shares in the partners in Border to Coast Pension Pensions Pool (BCPP) have an equal shareholding in BCPP which have been valued at cost i.e. transaction price, as an appropriate estimate of fair value. This is reviewed and assessed each year. Relevant factors include that there is no market in the shares held, disposal of shares is not a matter in which any shareholder can make a unilateral decision, and the company is structured as not to not make a profit. As at 31 March 20222021, taking into consideration the of audited accounts for the company at 31 December 20212020, there is also no evidence of any impairment in the value of shares held. It has therefore been determined that costs remain cost remains an appropriate proxy for fair value at 31 March 2022. All investments managed by BCPP are valued at their fair value2021; • investments in private equity funds, private credit funds and unquoted infrastructure funds are valued based on the fund’s share of the net assets in the private equity fund, private credit fund or infrastructure fund using the latest financial statements published by the respective fund managers, adjusted for cashflows; and • derivative contracts outstanding at the year-end are included in the Net Assets Statement at fair value (as provided by Investment Managers) and gains and losses arising are recognised in the Fund Account as at 31 March. The value of foreign currency contracts is based on market forward exchange rates at the reporting date. The value of all other derivative contracts is determined using exchange prices at the reporting date. Where Investment Managers are unable to supply investment valuations in line with the above policies, valuations will be included as supplied by the Investment Manager, usually at mid-market price. Cash and Cash Equivalents Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with insignificant risk of change in value. Contingent Assets A contingent asset arises where an event has taken place that gives a possible asset which will only be confirmed by the occurrence of uncertain future events not wholly within the control of the Fund. Contingent assets are not recognised in the Net Assets Statement however details are disclosed in Note 22. Investment Transactions Investment transactions arising up to 31 March but not settled until later are accrued in the accounts. All purchases and sales of investments in foreign currency are accounted for in sterling at the prevailing rate on the transaction date. Actuarial present value of promised retirement benefits The actuarial present value of promised retirement benefits is assessed on a triennial basis by the scheme actuary in accordance with the requirements of IAS 19 and relevant actuarial standards. As permitted under IAS 26 the Fund has opted to disclose the actuarial present value of promised retirement benefits by way of a note to the accounts (Note 24). Additional Voluntary Contributions (AVCs) The Fund provides an additional voluntary contribution (AVC) scheme for its members, the assets of which are invested separately from those of the Fund. In accordance with LGPS Regulations, AVCs are not recognised as income or assets in the Fund Accounts, however a summary of the scheme and transactions are disclosed in Note 20 to these accounts. If, however, AVCs are used to purchase extra years’ service from the Fund, this is recognised as contribution income in the Fund’s accounts on an accruals basis. Amounts received in this way can be found in Note 8 as additional contributions from members. Prior Period Adjustments Prior period adjustments may arise as a result of a change in accounting policies or to correct a material error. Material errors discovered in prior period figures are corrected retrospectively by amending opening balances and comparative amounts for the prior period.

Valuation of Investments. Investments are included in the accounts at their fair value as at the reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All prices in foreign currency are translated into sterling at the prevailing rate on the last working day of March. An investment asset is recognised in the Net Assets Statement on the date the Fund becomes party to the contractual acquisition of the asset. From this date any gains or losses arising from changes to the fair value of the asset are recognised by the Fund. The values of investments as shown in the Net Assets Statement have been determined as follows: •  quoted equity securities and traded on an exchange are accounted for on a bid market price basis, where Investment Managers provide valuations in this manner;  fixed interest securities traded on an exchange are accounted for at bid market priceprice where Investment Managers provide valuations in this manner; •  index linked securities traded on an exchange are valued at bid market valuevalue where Investment Managers provide valuations in this manner; •  unitised managed funds are valued at the closing bid price if bid and offer prices are reported by the relevant exchange and in the Investment Manager’s valuation report. Single priced unitised managed funds are valued at the reported price; •  unitised, unquoted managed property funds are valued at the most recently available net asset value adjusted for cash flows, where appropriate, flows or a single price advised by the fund manager; • Each of  shares in the partners in Border to Coast Pension Pool Pensions Partnership (BCPP) have an equal shareholding in BCPP which have been valued at cost i.e. transaction price, as an appropriate estimate of fair value. This is reviewed and assessed each year. Relevant factors include that there is no market in the shares held, disposal of shares is not a matter in which any shareholder can make a unilateral decision, and the company is structured as to not make a profit. As at 31 March 2022, taking into consideration the audited accounts for the company at 31 December 2021, there is also no evidence of any impairment in the value of shares held. It has therefore been determined that costs remain an appropriate proxy for fair value at 31 March 2022. All investments managed by BCPP are valued at their fair value; •  investments in private equity funds, private credit funds and unquoted infrastructure funds are valued based on the fund’s share of the net assets in the private equity fund, private credit fund or infrastructure fund using the latest financial statements published by the respective fund managers, adjusted for cashflows; and •  derivative contracts outstanding at the year-end are included in the Net Assets Statement at fair value (as provided by Investment Managers) and gains and losses arising are recognised in the Fund Account as at 31 March. The value of foreign currency contracts is based on market forward exchange rates at the reporting date. The value of all other derivative contracts is determined using exchange prices at the reporting date. Where Investment Managers are unable to supply investment valuations in line with the above policies, valuations will be included as supplied by the Investment Manager, usually at mid-market price. Cash and Cash Equivalents Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with insignificant risk of change in value. Contingent Assets A contingent asset arises where an event has taken place that gives a possible asset which will only be confirmed by the occurrence of uncertain future events not wholly within the control of the Pension Fund. Contingent assets are not recognised in the Net Assets Statement however details are disclosed in Note 22. Investment Transactions transactions Investment transactions arising up to 31 March but not settled until later are accrued in the accounts. All purchases and sales of investments in foreign currency are accounted for in sterling at the prevailing rate on the transaction date. Financial liabilities The Fund recognises financial liabilities at fair value as at the reporting date. A financial liability is recognised in the Net Assets Statement on the date the Fund becomes party to the liability. From this date any gains or losses arising from changes in the fair value of the liability are recognised in the Fund Account as part of the Change in Value of Investments. Other financial liabilities classed as amortised cost are carried at amortised cost i.e. the amount carried in the net asset statement is the outstanding principal repayable plus accrued interest. Any interest charged is accounted for on an accruals basis and included in administration costs. Actuarial present value of promised retirement benefits The actuarial present value of promised retirement benefits is assessed on a triennial basis by the scheme actuary in accordance with the requirements of IAS 19 and relevant actuarial standards. As permitted under IAS 26 the Pension Fund has opted to disclose the actuarial present value of promised retirement benefits by way of a note to the accounts (Note 24). Additional Voluntary Contributions (AVCs) The Fund provides an additional voluntary contribution (AVC) scheme for its members, the assets of which are invested separately from those of the Fund. In accordance with LGPS Regulations, AVCs are not recognised as income or assets in the Pension Fund Accounts, however a summary of the scheme and transactions are disclosed in Note 20 to these accounts. If, however, AVCs are used to purchase extra years’ service from the Pension Fund, this is recognised as contribution income in the Fund’s accounts on an accruals basis. Amounts received in this way can be found in Note 8 as additional contributions from members. Prior Period Adjustments Prior period adjustments may arise as a result of a change in accounting policies or to correct a material error. Material errors discovered in prior period figures are corrected retrospectively by amending opening balances and comparative amounts for the prior period.