Research Disclosures and Our Principles

Hardman  Co is committed to ensuring the good standing of its brand, and maintaining confidence in the integrity and credibility of all our services.

To meet this commitment, we abide by the principles below.

At the end of these principles, we outline the companies who who have paid us to produce research in the last 12 months.

Our published research

• We want our research to be ‘clear, fair and not misleading’. To meet this objective our published research on quoted companies.
• Describes the business line/s and company history
• Considers the strengths and weaknesses of the company
• Explores the opportunities for the company, and the threats to it
• Explains the competitive position of the company and the risks
• Contains a financial model, typically looking back where possible at 3 years of financials to understand what the key financial levers in the business were…
•  … and has forecasts, using assumptions about those levers
• Helps the investor understand how the market might value the business, using an appropriate methodology. This might compare the company to a peer group or use other techniques. Generally, there will be a range of outcomes and the tools to enable a potential investor to come to his own conclusions
• Will never have a recommendation, nor target price; we have an editorial and governance function whose task is to ensure that we do not publish a target price, nor explicit recommendation, nor words which could be construed as an ‘implicit’ recommendation
• May propose a figure for ‘fair value’ for the shares. Where a Fair Value price is given in a research note, such as a DCF or peer comparison, this is the theoretical result of a study of a range of possible outcomes, and not a forecast of a likely share price. Many factors influence share prices, such as macro-economic forces, changing investor attitudes to risk, differing opinions, etc; fair value is only one of those factors. A share price can remain below or above ‘fair value’ for a long time and, given the other factors which are part of price formation, move further away from fair value over time

The research reflects the objective views of the analyst(s) named on the front page and does not constitute investment advice.
All information used in our publication comes from publicly available sources that are believed to be reliable. However, no guarantee, warranty or representation, express or implied, can be given by Hardman & Co as to the accuracy, adequacy or completeness of the information contained in the research and we are not responsible for any errors or omissions or results obtained from use of such information.

Our research is prepared purely for information purposes, and nothing in the reports should be construed as an offer, or the solicitation of an offer, to buy or sell any security, product, service or investment.

Our research is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Hardman & Co or its affiliates to any registration requirement within such jurisdiction or country.

Published research forecasts, fair values and opinions

Any forecast, fair value or view on a company or variable is made at the date on the note and is the opinion of the author of the report. Inevitably, conditions may change over time and events occur, which may mean that forecasts, fair values and opinions published on a particular date might no longer be valid.
Hardman & Co is under no obligation to revisit forecasts, fair values and opinions in the event of such changes. Absence of a further research note or commentary should not be construed to mean that the original forecasts, fair values and opinions remain valid, unless we specifically state so.

Timing of research publications

Whilst we endeavour to publish on our clients as soon as reasonably practical after an announcement, we are under no obligation to our client (the company) to do so by any deadline.

If we have written regularly about a company in the past, but do not do so shortly after an announcement, one of the following things has occurred:

• We and the company do not deem the announcement worthy of further comment
• We have agreed with the company not to do a report, typically because we have already recently published on them
• We have been asked not to publish on this occasion by the company
• The company is behind with its payments and we have decided to suspend coverage
• Our contract with that company has come to an end

It is not our general policy to announce the ending of a contract, and investors should understand that we would not comment on any of the other reasons.

No personal recommendation/suitability

Securities or legal entities mentioned in our research may not be suitable or appropriate for all investors. Where a note refers to a particular tax treatment, the tax treatment will depend on each investor’s particular circumstances and may be subject to future change. Each investor’s particular needs, investment objectives and financial situation are not taken into account in the preparation of our research and the material contained herein.

Each investor must make his or her own independent decisions and obtain their own independent advice regarding any information, projects, securities, tax treatment or financial instruments mentioned in our research. The fact that Hardman & Co has made available through this document various information constitutes neither a recommendation to enter into a particular transaction nor a representation that any financial instrument is suitable or appropriate for a particular investor. Each investor should consider whether an investment strategy of the purchase or sale of any product or security is appropriate for them in the light of their own investment needs, objectives and financial circumstances.

Some or all alternative investments may not be suitable for certain investors. Investments in small and mid-cap corporations and foreign entities are speculative and involve a high degree of risk. An investor could lose all or a substantial amount of his or her investment. Investments may be leveraged and performance may be volatile; they may have high fees and expenses that reduce returns

Our analysts

We pride ourselves on the experience and professionalism of our research team. All analysts have spent many years analysing companies for investment purposes and many have been highly ranked in the sectors by external parties, such as ‘Institutional Investor’.
The views expressed in our research are always that of the analyst/s detailed on the front of the note, based on their experience of the sector or similar companies. The analyst is expected to come to his/her opinions and views after a careful review of the available information about the company, an independent assessment of information about the sector and competitors, and by applying their professional experience to their research.

Taking on clients

No client contract is entered into before approval by our Commitment Committee

• The Commitment Committee is made up of the most experienced members of the Hardman & Co tea
• A member of the Commitment Committee who has been involved in winning the client, or who will gain a financial benefit from the approval (e.g an analyst who might be paid a share of the fee), is not allowed to vote on whether to engage with the clien
• The Commitment Committee considers a due diligence report prepared about the suitability of the client along with a money laundering analysis

Client contract

Our client contracts for published research contain the following provisions:

• Corporate clients are shown the report before publication
• They have the right to correct factual errors
• They have the right to instruct us to delete commercially sensitive information
• They have the right to instruct us not to publish, though, if they do so, they are still obliged to pay us for the contractual term
• They have no right to dictate our opinion

In the event of a disagreement between the analyst and the company management about non-factual matters, the following steps are taken:

• There is a discussion between the parties to resolve the matter
• The company is given the right to print its alternative view alongside that of the Hardman & Co analysis.
• The company can require Hardman & Co not to publish (but, if they do so, they are still obliged to pay us for the contractual term)

Restrictions on research availability

We are required to restrict the availability of research on some of our clients. For example, our research on ‘Non-Mainstream Pooled Investments’ is not available to any person who is a “U.S. person” or to any person who is physically present in the United States, and it is available only to persons who are “relevant persons” (as defined below) for U.K. regulatory purposes.
Investors will be required to self-certify, before they can gain access to such work.

Hardman & Co’s research fees

• We are paid a set fee in cash by our clients for the research which we publish
• The fee is never related to share price performance nor the number of shares traded, because we think that would clearly undermine our independence
• The only exception to the above would occur when a client contract is terminated and the client’s financial position is such that payment in shares is the only practical way they have to meet their liability. We would not publish any further research, once we have accepted shares

Analyst remuneration

The analyst team consists of both employees and consultants.

• Employees are paid a monthly salary, together with participation in a bonus pool which is related to the firm’s overall revenues
• Consultants are paid a share of the fee the firm receives from the clients about which they write
• Analyst remuneration is solely determined by Hardman & Co
• Analyst remuneration is not linked in any way to the opinions and views conveyed in any research note

Investor engagement

As well as publishing research on companies, Hardman & Co undertakes investment engagement activities for select clients. This may include roadshows, webinars, lunches and forums.

These events are designed to enable investors to understand the business case and meet the management. At no stage in any of these events will Hardman & Co make a recommendation, and the holding or organisation of such events should not be construed as a recommendation or incitement to invest.

Hardman & Co is paid a set fee in cash by our clients for these events.

• The fee is never related to share price performance nor the number of shares traded
• The only exception to the above would occur when a client contract is terminated and the client’s financial position is such that payment in shares is the only practical way they have to meet their liability. We would not conduct any further investor engagement, once we have accepted shares

Investment banking services

Hardman & Co may provide investment banking services to clients. In such an event, this will be explained in the disclaimer

Own book dealing

Hardman & Co does not deal in any securities for its own book or on behalf of others, with one exception. We may take shares in a former client as payment because its financial position is such that payment in this way is the only practical way to meet their liability; if we do so we would seek to dispose of those shares as quickly as possible.

Personal dealing

All members of the Hardman & Co team are required to abide by our code on personal dealing

• Members of the team (the client team) involved in winning or servicing particular clients are not allowed to deal in the securities of those companies without prior permission
•  Such permission is only granted in the limited circumstances when:
  • 14 days have elapsed from the last published Hardman note and
  •  A Hardman &Co note is not due to be published in the next 30 calendar days and
  • The company is not in a closed period as defined by the governance code
• If any member of the Hardman & Co team, who is not part of a particular client team, becomes aware of a pending note, they are also expected to desist from dealing
• These rules applies to related parties of the Hardman & Co team, such as partners, non-adult children etc
• If an analyst holds shares in a security about which he writes, this will be disclosed in the note.

Handling inside information – Market Abuse Regulation 2016

• In the normal course of business, Hardman & Co staff may be made insiders by a company or its advisors; an example might be a discussion with management shortly before publication of results in order for Hardman to publish on the day of the results
• Hardman & Co’s staff are trained in identifying and handling inside information
• We have systems and protocols that hold this information and our work derived from it in secure areas; we restrict its availability to those who need to know
• We maintain a register that details inside information held and members of staff who have access to it
• In the event of Hardman & Co receiving an enquiry from the Financial Conduct Authority, which seeks access to insider lists, we will respond positively and promptly to such a request

Conflicts of interest

Other parts of these principle cover potential conflicts of interest.
In addition, Hardman & Co staff, consultants and officers are barred from being employed or engaged by the companies or legal entities covered by our research. Their only engagement with our clients is through their relationship with Hardman & Co.
Criminal Finances Act 2017 (“CFA”).

• Hardman & Co staff are aware of their obligations pursuant to the CFA; and
• Hardman has adopted appropriate procedures and implemented applicable training designed to prevent our employees and associated persons from facilitating both UK and foreign tax evasion offences

Bribery Act 2010:

• Our staff are aware of their obligations under the Bribery Act; and
• Hardman has adopted appropriate procedures and implemented applicable training designed to comply with the company’s policy of zero tolerance towards bribery and corruption
• In particular, Hardman & Co does not allow analysts or any member of staff to accept any remuneration or other benefit from a company or any other party in respect of any research published…
•  …nor may analysts or any other member of staff accept any inducement for the production of favourable research
• Hardman & Co staff are not precluded from accepting reasonable corporate hospitality in accordance with our policies regarding gifts and entertainment

Anti-money Laundering (“AML”) and Combatting the Financing of Terrorism (“CFT”)

• Our staff are aware of their obligations under AML and CFT regulations; and
• Hardman & Co carries out regular training in these matters
• Hardman & Co has adopted appropriate policies and procedures to ensure compliance with all applicable AML and CFT regulations.

Whistleblowing Procedures

• Hardman & Co recognises the importance of whistle-blowers and their protection
• Hardman & Co has appropriate internal whistleblowing procedures in place
• Keith Hiscock, CEO, is the initial point of contact for any whistleblowing concerns

General Data Protection Regulation (GDPR) 2018

In the course of its business, Hardman & Co processes personal data. We have internal policies and procedures that address data protection issues, to ensure data is handled and protected as required by GDPR.

Hardman & Co is registered at the Information Commissioner’s Office with reference number ZA409679

Financial Conduct Authority

Hardman Research Ltd is an appointed representative of Capital Markets Strategy Ltd (Firm reference number 438697). Hardman Research Ltd has three trading names registered with the FCA (Hardman Research Ltd, Hardman & Co and Hardman Agribusiness). Hardman Research Ltd’s own ‘Firm reference number’ is 600843.

Documents which we publish constitute ‘financial promotions’ for the purposes of section 21 Financial Services and Markets Act 2000 (United Kingdom) (‘FSMA’) and accordingly have been approved by Capital Markets Strategy Ltd.

Companies House

Hardman & Co is the trading name of Hardman Research Limited, whose company number is 08256259, and whose registered address is 9 Bonhill Street, London, EC2A 4DJ

Status of Hardman & Co’s research under MiFID II

Some professional investors, who have been subject to the MiFID II rules since 3rd January 2018, may be unclear about the status of Hardman & Co research and, specifically, whether it can be accepted without a commercial arrangement.

Hardman & Co’s research is paid for by the companies, legal entities and issuers about which we write and, as such, falls within the scope of ‘minor non-monetary benefits’, as defined in the Markets in Financial Instruments Directive II. In particular, Article 12(3) of the Directive states: ‘The following benefits shall qualify as acceptable minor non-monetary benefits only if they are: (b) ‘written material from a third party that is commissioned and paid for by a corporate issuer or potential issuer to promote a new issuance by the company, or where the third party firm is contractually engaged and paid by the issuer to produce such material on an ongoing basis, provided that the relationship is clearly disclosed in the material and that the material is made available at the same time to any investment firms wishing to receive it or to the general public…’

The fact that Hardman & Co is commissioned to write the research is disclosed in the disclaimer, and the research is widely available. The full detail is on page 26 of the full directive, which can be accessed here: http://ec.europa.eu/finance/docs/level-2-measures/mifid-delegated-regulation2016-2031.pdf
In addition, it should be noted that MiFID II’s main aim is to ensure transparency in the relationship between fund managers and brokers/suppliers, and eliminate what is termed ‘inducement’, whereby free research is provided to fund managers to encourage them to deal with the broker. Hardman & Co is not inducing the reader of our research to trade through us, since we do not deal in any security or legal entity

Reproduction

No part of any Hardman & Co document may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photocopying, recording or otherwise, without prior permission from Hardman & Co. By accepting our documents, recipients agree to be bound by the limitations set out in this notice. This notice shall be governed and construed in accordance with English law.

A list of companies who have paid us to produce research in the last 12 months are listed below: