1.1 Introduction

Ashanti Capital Pty Ltd (Ashanti) has employed a research analyst who is responsible for the production of Ashanti’s research products. The research analyst will remain independent from Ashanti’s sales and corporate advisory teams in order to produce research that is objective, clear, fair and not misleading. The research analyst must comply with policies and procedures designed to assist in identifying and managing conflicts of interest and inside information that might affect or raise questions about the independence of research.

Ashanti complies with the guidelines set out by the Australian Securities and Investments Commission (ASIC) in research regulatory guidance notes: RG 79, RG 181 and RG 264 as well as the licensing obligations set out under the Corporations Act 2001 (Cth).

The research analyst and Ashanti staff are provided with training and guidance on what constitutes inside information and actual or potential conflicts, and how to act in those circumstances. The research analyst also employs a process to verify whether information is publicly available before releasing research to the market, protecting inside information.

The research analyst is responsible for raising conflicts or potential conflicts with Ashanti’s compliance staff to ensure these are reviewed at the appropriate level within Ashanti and dealt with in accordance with Ashanti’s internal policies and procedures.

1.2 Application

This statement applies to Ashanti’s research analyst and the research product produced by them. This statement sets out the organisation principles and standards applicable to all research reports produced by Ashanti. Ashanti acknowledge that all research products and communications of the research analyst must also meet the applicable local regulatory requirements and the requirements of the jurisdiction in which they are distributed.

1.3 Research Values

Ashanti’s research analyst produces and distributes all research reports. The research analyst acknowledges that all research produced must be:

  1. honest, fair, balanced and not misleading;
  2. prepared with due care and skill;
  3. based on publicly available information.

Ashanti’s independent research analyst must, among other things:

  1. ensure no inside information is contained in any research report;
  2. identify all conflicts and deal with them in accordance with Ashanti’s conflict management procedures and policies;
  3. adequately disclose any personal conflicts of interest;
  4. only produce research reports that express full, complete and unbiased opinions based on their own analysis;
  5. support any opinion in a research report with factual reasoning;
  6. do everything to maintain their independence including not engaging with the solicitation of corporate advisory transactions; and
  7. provide an internal research declaration before the publication of research to Ashanti’s compliance team or another control function that:
    1. to the best of the research analyst’s knowledge, they are not in receipt of inside information; and
    2. no attempt has been made by any other part of Ashanti to influence the research.

1.4 Research coverage decisions

Decisions to initiate or discontinue coverage on a particular stock are made by the research analyst. There are several factors that may be taken into consideration when the research analyst initiates or ceases coverage on a stock. These include (without limitation):

Corporate advisory mandates will not include any commitment or inducement to provide research coverage following the completion of a transaction or to provide an IER.

Decisions about research coverage are not influenced or requested by other parts of Ashanti (including corporate advisory or staff holding an investment in the company the subject of the research).

1.5 Disclosure of interests

The research analyst shall clearly disclose an interest in any research report, held by the research analyst who prepared the research. Such disclosure of interests will include prominent, specific and meaningful information about Ashanti’s conflicts, including:

  1. Any material interest Ashanti and its employees have in financial products that are subject to the research;
  2. Any benefits they or Ashanti is likely to receive from the company the subject of the research;
  3. The relationship (if any) to the company the subject of the research;
  4. Any assistance provided by the company subject of the research in preparing the research (e.g. site visit);
  5. The date the research was written and who took responsibility for it; and
  6. opinions and recommendations in the research must be based on reasonable grounds.

1.6 Remuneration and research funding

The renumeration of the research analyst is determined by a number of factors, however, is not directly linked to specific transactions. The research analyst’s remuneration is based on quantifiable measures such as the accuracy of research and analysis, ratings received from clients, the research analyst’s experience, insight and understanding and the accuracy of the analyst’s forecasts.

Research budgets are determined by the senior management of Ashanti with no input from corporate advisory and revenue generated by corporate advisory is not taken into account when allocating research expenses.

1.7 Maintaining Independence

Ashanti has robust physical and electronic information barriers between the research analyst and staff performing corporate advisory or sales functions.

The research analyst is required to produce research independently from all other areas of Ashanti. The research analyst is to ensure that the research reports are reviewed by the relevant compliance staff to ensure they comply with Ashanti guidelines and regulatory requirements. The research analyst is not supervised by corporate advisory.

The research analyst keeps all research reports private, and the context of the reports are not made available to non-research employees of Ashanti (except compliance staff) before it is available to clients.

All research reports will include the relevant disclosures required by regulatory requirements including the disclosure of conflicts of interest known at the time of publishing.

The research analyst will not volunteer any valuation information to Ashanti staff on any company subject of research and Ashanti staff will not request any valuation information during non-deal meetings or the pre-solicitation phase of a capital raising.

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

1.8 Limitation

This document is prepared and published in order to comply with relevant Australian regulations, including the Australian Securities and Investments Commission regulations. This document is not intended to create third party rights or contractual arrangements between Ashanti and any client. This document may be reviewed and amended from time to time as appropriate.

ERA Communications