Stewardship Policy

Background

The UK Stewardship Code (“the Code”) was published by the Financial Reporting
Council in July 2010 and revised in September 2012. Under the Code, PVML is
required to comply with the principles of the Code or to explain why it has not done so.
This document sets out the policy of PVML for engaging with the companies in which
its clients invest and explains how and to what extent PVML complies with the
principles of the Code.

PVML’s business consists mainly of helping clients to obtain value and liquidity from
their investments either through a fund structure or on an individual investment basis.
Engaging with investee companies is always a vital part of this process and PVML
expects to be actively involved with all such companies. PVML is often engaged by
clients precisely to engage with investee companies because the client, who holds the
investment lacks the time and/or the expertise to resolve the issues itself.

PVML is often involved in promoting change in investee companies by persuading
boards to change strategy or personnel. PVML often works with other shareholders in
order to bring about the required change. PVML’s ability to bring about change in
investee companies is a key part of its business and, in many cases, is specifically
what its clients employ it to do.

Principle 1 –
“Institutional investors should publicly disclose their policy on how they will

discharge their stewardship responsibilities”

PVML’s principal concern is always the provision of the best possible service to its
clients and obtaining the best possible return for the shareholders of those clients.
However, PVML has always recognised the link between good corporate governance
and the achievement of satisfactory results for investors. As a result, PVML has
always believed in engaging actively with investee companies. Indeed, as set out
above, engaging with investee companies is an essential part of PVML’s business
strategy. PVML makes the boards of investee companies aware of its expectations
and is prepared to hold them to account. PVML has published its stewardship policy
since 2010, initially as part of the Progressive Asset Management Limited group.

Principle 2 –
“Institutional investors should have a robust policy on managing conflicts

on interest in relation to stewardship and this policy should be publicly disclosed”

PVML has always been aware of the possibility of conflicts between its interests or
those of its employees and the interests of its clients and has always sought to
minimise those conflicts and to resolve them, where necessary, in such a way that its
clients are not disadvantaged. PVML is also aware of the possibility of conflicts
between the interests of different clients. Where these might arise, PVML agrees
procedures with the boards of the client companies whereby such conflicts may be
resolved.

PVML has maintained a formal conflicts of interest policy since 2007 and this policy is
made available to clients. The policy covers specifically the procedures to be adopted
where PVML wishes to deal in a stock for more than one client. It also covers the
potential conflicts arising from remuneration, gifts and inducements and personal
account dealing and sets out the procedures adopted in order to manage these
potential conflicts.

Principle 3 –
“Institutional investors should monitor their investee companies”

PVML monitors all its investee companies. In particular, PVML monitors corporate
governance arrangements and board structures. Meetings are held with management
to discuss the company’s strategy and the best way of achieving PVML’s investment
objectives. These meetings are recorded by PVML. Where PVML has concerns about
the governance or performance of an investee company it will raise these, normally
with the chairman, either in a meeting or in writing or both. PVML will request not to be
made an insider unless there is a clear benefit to its client and unless the period for
which it will remain an insider is definite and short. However, when these conditions
are satisfied, PVML is prepared to be made an insider.

PVML’s investment managers conduct their own monitoring of investee companies to
determine whether the corporate governance and conduct of those companies is
satisfactory. PVML will compare board structures and arrangements against the UK
corporate governance codes and other guidelines of best practice. PVML will also
consider issues such as share price performance, remuneration of directors and key
executives and the willingness or otherwise of the board to engage and be open with
shareholders. PVML pays particular attention to the company’s actual response to
issues raised by shareholders.

PVML seeks to attend general meetings of investee companies that are based in the
UK and to take the opportunity of such meetings to question the board either formally
as part of the business of the meeting or informally outside the meeting. Failing this,
and particularly where PVML’s holding in a company is small, PVML will attend
analysts’ meetings or results presentations and use these opportunities to question
management. In the case of overseas companies, PVML will seek to meet
management when possible, bearing in mind that it may not be cost-effective to travel
to general meetings.

PVML does not rely on the recommendations of any outside agency in deciding how to
vote. PVML maintains records of votes cast at general meetings of investee
companies and the reasons for any votes that are against the advice of the board of
the investee company.

Principle 4 –
“Institutional investors should establish clear guidelines on when and how

they will escalate their activities as a method of protecting and enhancing shareholder
value”

PVML forms a view as to the correct course of action for each investee company and
attempts to persuade management to follow that course. Where it appears that
management are not following the recommended course, PVML will consider further
action including voting against reappointment of directors. PVML will also seek to
influence management by raising concerns with the company’s advisers. If necessary
(and if possible) PVML may requisition a resolution at a meeting of the company or
may requisition a meeting to oblige management to carry out the recommended
actions. These actions may be taken in conjunction with other shareholders (see
below).

Principle 5 –
“Institutional investors should be willing to act collectively with other

investors where appropriate”

PVML is always prepared to act with other investors where this is likely to produce a
better result for its clients’ shareholders. Where PVML has a clear view of the direction
that an investee company should be taking but the management of that company
appear to be reluctant to consider that course, PVML will seek the views of other
shareholders with a view to persuading management that the recommended course of
action is in accordance with shareholders’ wishes. PVML maintains close links with the
institutions that invest in smaller UK companies. Indeed, because of the nature of
PVML’s funds, the other shareholders will often be investors in the funds.

PVML will always take great care to avoid forming a “concert party” under the Takeover
Code unless it considers that such action is the best interests of its clients’
shareholders. In no circumstances will PVML put itself in a position where it might
have to make a bid for an investee company under Rule 9 of the Takeover Code.

Principle 6 –
“Institutional investors should have a clear policy on voting and disclosure

of voting activity”

PVML’s policy is to vote all the shares it controls on behalf of its clients. Where PVML
does vote, it reviews the resolutions and votes according to its perception of the
interests of its clients’ shareholders. This means that PVML will only support the board
of the investee company if it thinks that this is best for shareholders. PVML sets out on
its website a summary record of how it has voted on behalf of its clients. This record is
updated quarterly within one month of the end of the quarter. As stated above under
Principle 3, PVML does not rely

PVML does not engage in stock lending.

Principle 7 –
“Institutional investors should report periodically on their stewardship and

voting activities”

PVML prepares reports for each of its quoted clients at each board meeting of the
client. These reports cover the involvement of PVML with all significant investments
including meetings with management, voting and any other action taken by PVML in
respect of that investment. PVML considers that it would not be cost effective to obtain
an independent opinion on its engagement policy and voting processes in view of the
current nature and scale of its business and that obtaining such an opinion is
unnecessary in view of the close relationships it has with its clients.

September 2016