Each of the directors is engaged under a letter of appointment with the Company and does not have a service contract with the Company. Under the terms of their appointment, each director is required to retire by rotation and seek re-election at least every three years. Each director's appointment under their respective letter of appointment is terminable immediately by either party (the Company or the director) giving written notice and no compensation or benefits are payable upon termination of office as a director of the Company becoming effective.

Ian Mattioli is Chief Executive of Mattioli Woods, the parent company of the Investment Manager, and is a director of the Investment Manager. As a result, Ian Mattioli is not independent. The Company Secretary, Ed Moore, is also a director of the Investment Manager.

Investment Management Agreement

The Investment Manager is engaged as AIFM under an IMA with responsibility for the management of the Company's assets, subject to the overall supervision of the Directors. The Investment Manager manages the Company's investments in accordance with the policies laid down by the Board and the investment restrictions referred to in the IMA. The Investment Manager also provides day-to-day administration of the Company and acts as secretary to the Company, including maintenance of accounting records and preparing the annual and interim financial statements of the Company.

During the year annual management fees payable to the Investment Manager under the IMA were calculated as follows: ? 0.9% of the NAV of the Company as at the relevant quarter day which is less than or equal to GBP200m divided by 4; ? 0.75% of the NAV of the Company as at the relevant quarter day which is in excess of GBP200m but below GBP500m divided

by 4; plus ? 0.65% of the NAV of the Company as at the relevant quarter day which is in excess of GBP500m divided by 4.

During the year administrative fees payable to the Investment Manager under the IMA were calculated as follows: ? 0.125% of the NAV of the Company as at the relevant quarter day which is less than or equal to GBP200m divided by 4; ? 0.08% of the NAV of the Company as at the relevant quarter day which is in excess of GBP200m but below GBP500m divided

by 4; plus ? 0.05% of the NAV of the Company as at the relevant quarter day which is in excess of GBP500m divided by 4.

On 22 June 2020 the terms of the IMA were varied to extend the appointment of the Investment Manager for a further three years, with a further year's notice, and to introduce further fee hurdles such that annual management fees payable to the Investment Manager under the IMA are now: ? 0.9% of the NAV of the Company as at the relevant quarter day which is less than or equal to GBP200m divided by 4; ? 0.75% of the NAV of the Company as at the relevant quarter day which is in excess of GBP200m but below GBP500m divided

by 4; ? 0.65% of the NAV of the Company as at the relevant quarter day which is in excess of GBP500m but below GBP750m divided

by 4; plus ? 0.55% of the NAV of the Company as at the relevant quarter day which is in excess of GBP500m divided by 4.

Administrative fees payable to the Investment Manager under the IMA are now: ? 0.125% of the NAV of the Company as at the relevant quarter day which is less than or equal to GBP200m divided by 4; ? 0.08% of the NAV of the Company as at the relevant quarter day which is in excess of GBP200m but below GBP500m divided

by 4; ? 0.05% of the NAV of the Company as at the relevant quarter day which is in excess of GBP500m but below GBP750m divided

by 4; plus ? 0.03% of the NAV of the Company as at the relevant quarter day which is in excess of GBP750m divided by 4.

The IMA is terminable by either party by giving not less than 12 months' prior written notice to the other, which notice may only be given after the expiry of the three year term. The IMA may also be terminated on the occurrence of an insolvency event in relation to either party, if the Investment Manager is fraudulent, grossly negligent or commits a material breach which, if capable of remedy, is not remedied within three months, or on a force majeure event continuing for more than 90 days.

The Investment Manager receives a marketing fee of 0.25% (2020: 0.25%) of the aggregate gross proceeds from any issue of new shares in consideration of the marketing services it provides to the Company.

During the year the Investment Manager charged the Company GBP3.75m (2020: GBP4.01m) comprising GBP3.33m (2020: GBP3.52m) in respect of annual management fees, GBP0.42m (2020: GBP0.43m) in respect of administrative fees and GBPnil (2020: GBP0.06m) in respect of marketing fees. 19. Financial risk management

Capital risk management

The Company manages its capital to ensure it can continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance within the parameters of its investment policy. The capital structure of the Company consists of debt, which includes the borrowings disclosed below, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued ordinary share capital, share premium and retained earnings.

Net gearing ratio

The Board reviews the capital structure of the Company on a regular basis. As part of this review, the Board considers the cost of capital and the risks associated with each class of capital. The Company has a target net gearing ratio of 25% determined as the proportion of debt (net of unrestricted cash) to investment property. The net gearing ratio at the year end was 24.9% (2020: 22.4%).

Externally imposed capital requirements

The Company is not subject to externally imposed capital requirements, although there are restrictions on the level of interest that can be paid due to conditions imposed on REITs.

Financial risk management

The Company seeks to minimise the effects of interest rate risk, credit risk, liquidity risk and cash flow risk by using fixed and floating rate debt instruments with varying maturity profiles, at low levels of net gearing.

Interest rate risk management

The Company's activities expose it primarily to the financial risks of increases in interest rates, as it borrows funds at floating interest rates. The risk is managed by maintaining: ? An appropriate balance between fixed and floating rate borrowings; ? A low level of net gearing; and ? The RCF whose flexibility allows the Company to manage the risk of changes in interest rates.

The Board periodically considers the availability and cost of hedging instruments to assess whether their use is appropriate and also considers the maturity profile of the Company's borrowings.

Interest rate sensitivity analysis

Interest rate risk arises on interest payable on the RCF only, as interest on all other debt facilities is payable on a fixed rate basis. At 31 March 2021, the RCF was drawn at GBP25m. Assuming this amount was outstanding for the whole year and based on the exposure to interest rates at the reporting date, if three-month LIBOR had been 0.5% higher /lower and all other variables were constant, the Company's profit for the year ended 31 March 2021 would decrease/ increase by GBP0.1m due to its variable rate borrowings.

Market risk management

The Company manages its exposure to market risk by holding a portfolio of investment property diversified by sector, location and tenant.

Market risk sensitivity

Market risk arises on the valuation of the Company's property portfolio in complying with its bank loan covenants (Note 15). The Company would breach its overall borrowing covenant if the valuation of its property portfolio fell by 29% (2020: 35%).

Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. The Company's credit risk is primarily attributable to its trade receivables and cash balances. The amounts included in the statement of financial position are net of allowances for bad and doubtful debts. An allowance for impairment is made where a debtor is in breach of its financial covenants, available information indicates a debtor can't pay or where balances are significantly past due.

The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The maximum credit risk on financial assets at 31 March 2021 was GBP4.2m (2020: GBP4.4m).

The Company has no significant concentration of credit risk, with exposure spread over a large number of tenants covering a wide variety of business types. Further detail on the Company's credit risk management process is included within the Strategic report.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board, which has built an appropriate liquidity risk management framework for the management of the Company's short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profile of financial assets and liabilities.

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