RECM VOTING PRINCIPLES

RECM VOTING PRINCIPLES

Contents Introduction Section I Corporate Governance Framework Code for Responsible Investing in South Africa (CRISA) Section II. Resolutions Relating to Financial Statements. Composition of the Board. Independent Directors. Board Meeting Attendance. Board Memberships.4 Size of Boards.5 Board Tenure. Remuneration Policies. Termination Benefits. Long Term Incentive Schemes.. Share Incentive Schemes. Non-Executive Director s fees 4. Share Repurchases 5. Share Issuance and Placing Shares under Directors Control 6. Financial Assistance in terms of Section 44 and Section 45 of the Companies Act RECM is a privately-owned, independent asset management company that follows a bottom-up value approach based on thorough, fundamental research. We are committed to being long-term stewards of our clients assets, remaining true to our investment philosophy and process and retaining close relationships with our clients.

RECM Voting Principles Introduction This document outlines the principles underpinning our responsible investing activities as applied in our voting decisions. The framework within which we discharge our ownership responsibilities is outlined in the first section of the document. The second section sets out examples of how we apply the principles embedded in this framework. Section I Corporate Governance Framework Our approach to responsible investing is grounded on our understanding that every business and situation is unique, and each consideration and decision should therefore be made with this in mind. Pursuant to this approach, we are guided by principles that we believe a sensible business person would apply. A sensible business person would evaluate all of the significant and relevant aspects before making an investment. This would include, but not be limited to, conducting due diligence on the potential investment, evaluating the price to value opportunity, carefully considering the risks of permanent capital loss, evaluating the legality of the affairs of the venture and considering both intended and unintended consequences. Consideration of environmental, social and governance (ESG) issues, where appropriate, would form part of such an evaluation. As a firm, the ESG issue we place particular emphasis on is governance and our policies and practices highlight this.. Transparency Transparency is important in the fulfilment of our ownership responsibilities and we are commited to continuously improving in this regard. Our commitment to transparency is demonstrated in our practices. Our voting history since 00, including current records, is publicly available on our website. This is one of the ways we communicate our proxy voting decisions and engagement activities to our clients, the ultimate shareholders. Code for Responsible Investing in South Africa (CRISA) Our responsibilities towards our clients require us to continue to consider all relevant issues in our investment analysis, including ESG factors. The principles set out in CRISA serve as a valuable augmentation to our existing corporate governance principles. As such, we endorse the principles as set out in CRISA. Our main objective is to advance sound corporate governance practices within the businesses that we invest in for the benefit of our clients, the ultimate shareholders. This involves encouraging boards to carefully consider their capital allocation and remuneration policies. Two pillars support this objective, namely, Engagement and Transparency.. Engagement We actively engage with the management of investee companies on resolutions prior to voting and then vote according to our principles and the carefully considered outcomes of such engagements. These engagement efforts form part of our continuing dialogue with company management. Page

Section II: Examples. Resolutions Relating to Financial Statements Our voting decisions with regards to financial statements are informed by whether or not financial statements set out all the relevant information that would enable an owner to judge the progress of the company.. Composition of the Board. Independent Directors Our preference is for boards to have a sufficient number of independent directors and for sub-committees to be majority constituted by independent directors. We define independent directors as being independent of: a) Executive Management b) Controlling Shareholders. Board Meeting Attendance Adequate board and committee meeting attendance is a very important consideration in our voting decisions with regards to the re-election of directors.. Board Memberships If a non-executive director serves on a considerable number of boards we establish the efficiency of the director in managing this workload and evaluate any potential conflicts of interest. We question if a Chairman holds numerous board positions. An executive director should ideally have no other outside board positions with fiduciary duties, excluding board positions relating to companies within the group..4 Size of Boards We regard small boards as being more effective than larger ones and would discourage the superfluous appointment of directors..5 Board Tenure Extended tenure in the case of non-executive directors introduces the potential risk of declining objectivity over time. We encourage boards to consider this risk in their decision making.. Remuneration Policies We encourage investee companies to carefully consider the constructs of their remuneration policies and to be transparent with regards to the detail of these policies.. Termination Benefits We are cautious when it comes to remuneration schemes where large termination benefits are payable, particularly where the payment of the benefit arises as a result of performance related termination.. Long Term Incentive Schemes We determine the appropriateness of a long term incentive scheme by applying our minds to all the information available on the scheme, including the detail on performance criteria and costs. Disclosures relating to beneficiaries and trustees, in the case of share option schemes, are of importance as are those pertaining to change of control clauses... Share Incentive Schemes When deciding how to vote on resolutions relating to share incentive schemes, we consider the circumstances under which awards are made and any other relevant circumstances which are unique to that company. We welcome instances where management use their own money to purchase shares as this results in further alignment of directors interests with those of shareholders. Key considerations include the following: a) The appropriateness of the link between the awards and persons with direct influence on performance. Since awards are linked to overall company performance, we support awards to people that have a direct influence on performance. b) The appropriateness of the performance conditions. We support schemes which contain sufficient detail on performance criteria and targets, particularly if these performance criteria are demanding in the context of the environment in which the company operates. Such performance criteria would preferably be linked to capital efficiency. Examples of such performance Page

measures include measures such as the Return on Assets or Return on Invested Capital ratios of a company. In the case of earnings growth related performance measures, we consider whether the earnings measure is on a per share basis, the period that is used to measure performance and the nature of the target of the performance used.. Non-Executive Director s fees When deciding how to vote on non-executive directors fees, we take into consideration the excessiveness of the fee, where applicable, and in certain instances we establish the appropriateness of the portion of income earned from board representation. If we do not have a reliable method by which we can establish the appropriateness of the fees, we abstain from the vote. 4. Share Repurchases We support share repurchases where the shares that are being repurchased are trading at a discount to fair value and there is an appropriate maximum repurchase amount or percentage applicable for the period during which the repurchases could/would take place. 5. Share Issuance and Placing Shares under Directors Control We are in favor of the issuance of shares if the intent is to acquire assets of an equal or higher value and in instances where the shares are trading at a premium to fair value. Each case is considered according to its merits taking into account any maximums that are applicable for the particular period for which approval is being requested. 6. Financial Assistance in terms of Section 44 and Section 45 of the Companies Act In instances where a resolution seeks authorisation that is too broad in respect of Section 44 and Section 45, we vote against the resolution. Section 44 of the Companies Act No. 7 of 008: Financial Assistance for the subscription of securities Section 45 of the Companies Act No. 7 of 008: Loans or other Financial Assistance to Directors Page