The Board, in conjunction with the Company's advisers, will continue to monitor the development of the AIFMD and its impact on the Company. The Company will continue to use NPPR pending further consultation from the European Securities and Marketing Authority ("ESMA").

The Board has considered the disclosure obligations under Articles 22 and 23 and can confirm that the Company complies with the various organisational, operational and transparency obligations.

The Board has considered requirements of Articles 6 and 7 of Regulation 2019/2088 on sustainability-related disclosures in the financial services sector dated 27 November 2019 and have made the necessary disclosures on the Company's website.

FOREIGN ACCOUNT TAX COMPLIANCE ACT ("FATCA") AND THE OECD COMMON REPORTING STANDARDS ("CRS")

FATCA became effective on 1 January 2013 and is being gradually implemented internationally. The legislation is aimed at determining the ownership of US assets in foreign accounts and improving US Tax compliance with respect to those assets.

More than 90 jurisdictions, including all 34 member countries of the Organisation for Economic Co-operation and Development ("OECD") and the G20 members, have committed to implement the Common Reporting Standard for automatic exchange of tax information ("CRS"). Building on the model created by FATCA, the CRS creates a global standard for the annual automatic exchange of financial account information between the relevant tax authorities.

The Board in conjunction with the Company's service providers and advisers have ensured that the Company complies with FATCA and CRS's requirements to the extent relevant to the Company.

SECTION 172 STATEMENT

Whilst directly applicable to UK domiciled companies, the intention of the AIC Code is that the below matters set out in section 172 of the UK Companies Act, 2006 are reported.

Risk Management

In order to minimise the risk of failure to achieve business objectives, the Company actively identifies, evaluates, manages and mitigates risk as well as continually evolving the approach to risk management. For further details in connection with Risk Management of the Company, please refer to pages 12-16 of the Strategic Report and pages 39-40 of the Corporate Governance Statement.

Our People

The Company has no employees, however, to succeed we need to manage Company's performance by bringing through talent to the Board while ensuring we operate as efficiently as possible, as demonstrated with the succession plan. For further details in connection with the succession plan, please refer to page 37 of the Corporate Governance Statement.

Business Relationships

In order for the Company to succeed, it requires to develop and maintain long term relationships with service providers and borrowers. The Company values all of its service providers and borrowers.

Community and Environment

As an investment company, the Group's activities have minimal direct impact on the environment. Please refer to page 17 for more details in connection with the impact of the Company's operations on the community and environment.

Business Conduct

The Company is committed to act responsibly and ensure that the business operates in a responsible and effective manner and with high standards in order to meet its objectives.

Shareholders

The Board place a great deal of importance on communication with all shareholders and envisage to continuing effective dialogue with all shareholders. Please refer to section below for more details on how the Company engages with the shareholders.

Throughout 2021, the Board of the Company, both individually and together, will continue to review and challenge how the Company can continue to act in good faith to promote the success of the Company for the benefit of its stakeholders in the decisions taken.

DIALOGUE WITH SHAREHOLDERS

The Directors place a great deal of importance on communication with shareholders. The Company's Chairman, Investment Manager and the Broker, aim to meet with large shareholders at least annually, together with the Investment Adviser, and calls are undertaken on a regular basis with shareholders. The Board also receives regular reports from the Broker on shareholder issues. Publications such as the Annual Report and Consolidated Financial Statements and quarterly factsheets - which in light of the considerable disruption from Covid-19 the Board has sought to provide more detailed updates and disclosures - are reviewed and approved by the Board prior to circulation and are widely distributed to other parties who have an interest in the Company's performance and are available on the Company's website.

All Directors are available for discussions with the shareholders, in particular the Chairman and the Audit Committee Chairman, as and when required.

Should a situation arise where shareholders cast a vote of 20 per cent or more against a board recommendation the directors will consult with shareholders to understand their reasons behind this vote. The Board will publish the views received from the shareholders within six months of the shareholder meeting.

On 8 June 2020 at the Company's AGM, 27 per cent of total votes cast were cast against resolution 3 (to re-elect as a Director of the Company, Stephen Smith). The Company noted that it would seek to engage with the relevant shareholders who voted against resolution 3 in order to understand further the reasons for their votes and address their concerns. Following such consultation with shareholders, who expressed concerns over the diversity of the Board at that time, the Board announced on 3 August 2020 that the Company had appointed Shelagh Mason with effect from 1 September 2020 and Charlotte Denton with effect from 1 January 2021 as Non-Executive Directors of the Company. The appointments were in line with the Company's succession planning for the phased retirement of Directors over the period to December 2022 and its intention to consider diversity when making any new appointments to the Board. The appointments bring significant talent as well as new skills and experience to the Board and the Company was pleased to be able to make the appointments early in the rotation, ensuring a smooth transition. Any perceived imbalances in Board composition (including those leading to votes against resolution 3 at the prior AGM) have thus been addressed.

CONSTRUCTIVE USE OF AGM

The Notice of AGM is sent out at least 20 working days in advance of the meeting. All shareholders have the opportunity to put questions to the Board or Investment Manager, either formally at the Company's AGM, informally following the meeting, or in writing at any time during the year via the Company Secretary. The Company Secretary is also available to answer general shareholder queries at any time throughout the year.

By order of the Board

John Whittle | Director

25 March 2021

Report of the Audit Committee

The Board is supported by the Audit Committee, which comprises of John Whittle, as chairman, Jonathan Bridel (until his resignation on 31 December 2020) and Shelagh Mason (appointed on 8 September 2020 to the Audit Committee). The Board has considered the composition of the Audit Committee and is satisfied it has sufficient recent and relevant skills and experience, in particular the Board has considered the requirements of the AIC Code that the Audit Committee should have at least one Member who has recent and relevant financial experience and that the Audit Committee as a whole has competence relevant to the sector in which the Company invests. The Board considers all of the relevant requirements to have been met.

ROLE AND RESPONSIBILITIES

The primary role and responsibilities of the Audit Committee are outlined in the Audit Committee's terms of reference, available at the registered office, including: ? Monitoring the integrity of the consolidated financial statements of the Group and any formal announcements

relating to the Group's financial performance, and reviewing significant financial reporting judgements contained

within said statements and announcements; ? Reviewing the Group's internal financial controls, and the Group's internal control and risk management systems; ? Monitoring the need for an internal audit function annually; ? Monitoring and reviewing the scope, independence, objectivity and effectiveness of the external Auditor, taking

into consideration relevant regulatory and professional requirements; ? Making recommendations to the Board in relation to the appointment, re-appointment and removal of the external

Auditor and approving their remuneration and terms of engagement, which in turn can be placed before the

shareholders for their approval at the AGM; ? Development and implementation of the Group's policy on the provision of non-audit services by the external

Auditor, as appropriate; ? Reviewing the arrangements in place to enable Directors and staff of service providers to, in confidence, raise

concerns about possible improprieties in matters of financial reporting or other matters insofar as they may affect

the Group; ? Providing advice to the Board on whether the consolidated financial statements, taken as a whole, are fair,

balanced and understandable and provide the information necessary for shareholders to assess the Group's

performance, business model and strategy; and ? Reporting to the Board on how the Committee discharged all relevant responsibilities at each Board meeting.

Financial Reporting

The primary role of the Audit Committee in relation to the financial reporting is to review with the Administrator, Investment Manager and the Auditor the appropriateness of the Annual Report and Audited Consolidated Financial Statements and Interim Condensed Consolidated Financial Statements, concentrating on, amongst other matters: ? The quality and acceptability of accounting policies and practices; ? The clarity of the disclosures and compliance with financial reporting standards and relevant financial and

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March 26, 2021 03:02 ET (07:02 GMT)