Research Independence Statement

Morgans Financial Limited (Morgans) has policies and procedures designed to assist in identifying and managing possible conflicts of interest and inside information that might affect or raise questions about the independence of research. The intent of this statement is to outline Morgans position with regards to the independence of its research analysts.

Morgans complies with the guidelines set out by the Australian Securities and Investments Commission (ASIC) in research regulatory guidance notes: RG79, RG181 and RG264.

All research analysts and other Morgans staff with whom analysts interact are provided with training and guidance on how to identify inside information and potential conflicts, and how to act in those circumstances. Research management and compliance staff provide assistance and guidance where required.

Research analysts are responsible for raising conflicts or potential conflicts with Research management or compliance staff to ensure these are reviewed at the appropriate level within Morgans.

Research coverage decisions

Decisions to initiate or discontinue coverage on a particular stock are made by Research management in conjunction with the analyst. Research management may take into account input with respect to coverage requests from other business areas within Morgans.

There are several factors taken into consideration when an analyst initiates or ceases coverage on a stock. These include (without limitation):

Market capitalisation, index position, liquidity
Investment attractiveness including fundamental analysis
Potential catalysts (e.g. index inclusion)
Merger and acquisition activity
New to market
Under-covered in the market
Rounds out sector coverage
Well held by Morgans clients
Available resources to cover

Corporate advisory mandates will not include any commitment or inducement to provide research.

Research analyst independence

All research analysts report directly to the Director of Research, who reports directly to the Managing Director.

Morgans has robust physical and electronic information barriers between Research staff and staff performing corporate advisory or sales functions.

Research analysts produce research independently from other areas of Morgans. The lead analyst(s) responsible for a research report is required to ensure the views expressed in each research report accurately reflect his/her personal views.

Prior to publication, all research reports are reviewed by the Research review panel (senior editor and senior analysts) to ensure they comply with Morgans editorial guidelines and regulatory requirements. Research reports are not made available to non-research employees of Morgans (except compliance staff) before it is available to clients. Research reports are available via email, the website and approved third party vendors.

When amending research documents (including recommendations, opinions or material changes to a price target), the research analyst bases decisions on generally available information.

Research documents include disclosures as required by regulatory requirements. This includes analyst disclosure of any material conflict of interest known at the time of publishing.

Any requests for access to financial models maintained or prepared by research analysts, whether from internal or external sources, are referred to Research management.

Research analysts will not express their views on valuation information of a company during non-deal meetings or the pre-solicitation phase of a capital raising.

The compensation of research analysts is determined by a number of factors, however is not directly linked to specific transactions. Compensation will, in part, reflect the overall profitability of Morgans as a whole. Analysts are not allowed to receive or accept alternative remuneration from any source.

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