G O V E R N A N C E A N D S U S TA I N A B I L I T Y R E P O RTJuly 2016

www.martincurrie.com

GOVERNANCE AND SUSTAINABILITY REPORT SUMMARY

ACHIEVEMENTS

✔ Highest possible A+ rating awarded by the PRI for governance and sustainability strategy

✔ Proprietary industry framework documents implemented to aid integration

✔ Kim Catechis, Head of Global Emerging Markets, appointed to the prestigious Russell 20/20 Investment Association

✔ Became a signatory to the Stewardship Code in Japan

ACTIVE PARTICIPANTS IN PRI COLLABORATIVE ENGAGEMENT INITIATIVES

Water risks Fracking Cybersecurity

VOTING ACTIVITY

ENGAGEMENTACTIVITY

125# companies engaged

with (private)

25# companies engaged with

(collaborative)

743# meetings

8518# resolutions

PRI RATINGS HISTORYModule

Year Strategy Integration Active Ownership Reporting period

2016 A+ A+ A 1 Jan 15 – 31 Dec 15

2015 A+ A A 1 Jan 14 – 31 Dec 14

2014 A A A 1 Jan 13 – 31 Dec 13

PRI – Principles for Responsible Investment. Engagement and voting activity is for the period 1 January 2015 to 31 December 2015.

PAGE 2

CONTENTSForeword 3

Our approach 4

Identification 5

Integration 6

Active ownership 7

Outlook 14

ABOUT USAt Martin Currie, we are fundamental, long-term investors driven by investment expertise and focused on managing money for a wide range of global clients. Our approach is simple. We offer distinctive active equity portfolios and devote all of our resources to delivering optimum investment outcomes and superior client relationships.

What we do

Our investment rationale is considered and focused. As bottom-up stockpickers, our objective is to make the connections others miss, identifying the best money-making ideas and blending these to deliver attractive and consistent risk-adjusted returns for our clients. As a signatory to Principles for Responsible Investment (PRI) since 2009, we have integrated governance and sustainability analysis into all aspects of our investment research process.

Founded in 1881, we continue to fine-tune our approach to meet the current and future needs of our clients. Today we offer a focused range of strategies based on our three product pillars of income, high active share and absolute return. As an independent investment affiliate of Legg Mason, we are self-directed, innovative in our approach, and able to take a long-term view.

Working in partnership

When you become our client, you become a part of our business. We want to build a partnership where we work as one to meet and exceed your objectives. This means we support you with seasoned professionals, give you access to our expertise and resources and share our investment insights – as well as our personal and corporate networks.

FOREWORDGovernance and sustainability isn’t just marketing, but a key tenet of our investment philosophy. As long-term investors we take a holistic view of companies, and try to understand how all stakeholders are affected by their activities.

Ours is not a values-based approach in the sense of using strict ethical filters, but one that recognises that companies are on a journey. In other words, it is the direction of travel that counts and we actively engage with businesses to ensure that their path is towards best practice, for the ultimate benefit of shareholders.

Just as we look for transparency in the companies we invest in, we aim to achieve this with our clients. With this intended purpose, we are very pleased to present our report on activity for the period 1 January 2015 to 31 December 2015.

It goes without saying that there are many moving parts to sustainability, so in the spirit of collaboration and learning we welcome any feedback that you may have.

No one can predict the future, but it is safe to say that a disregard of governance and sustainability factors is unwise for anyone in the business of trying to protect and grow capital over the long term.

Indeed, there is mounting evidence that these have material impacts on long-term business performance, and thus returns for shareholders. And, critically, they do not just help investors to identify risks, but also to home in on opportunities.

While our belief in the importance of these factors is unshakeable, our process is far from static. We continuously assess materiality and look for ways that we can better incorporate governance and sustainability into our stock research and valuation methodology.

The potential impact of many global issues, from climate change to cybersecurity, means that sustainability has to be front and centre of long-term investment decisions and we focus on trying to understand which companies are best (and worst) placed to deal with these and other major challenges.

David SheasbyHead of Governance and Sustainability

John PickardHead of Investment

KEY FACTS

n Signatory to Principles for Responsible Investment (PRI) since 2009n Signatory to UK and Japanese Stewardship Codesn Member of International Corporate Governance Network (ICGN)n Governance and Sustainability analysis fully integrated into the investment process n Integration carried out by people who know the companies best – portfolio managers and analystsn Implementation overseen by David Sheasby, Head of Governance and Sustainabilityn Highest possible A+ rating from the PRI for governance and sustainability strategy

PAGE 4

GOVERNANCE AND SUSTAINABILITY – OUR APPROACH

How do we do it

As bottom-up investors, our process starts at the company level. Once an idea has been identified, we subject it to rigorous fundamental analysis and peer review to ascertain whether it merits inclusion in our high-conviction portfolios. Governance and sustainability factors are embedded in this assessment, influencing key assumptions such as the cost of capital, revenues or costs and thus our estimate of a company’s intrinsic value. Our particular emphasis on governance stems from a belief that this is the fundamental determinant of long-term performance. Problems here are more often than not reflected in a company’s environmental and social track record, making it a reliable proxy for broader sustainability. In broad terms, we divide our process into three categories: identification, incorporation and active ownership.

Governance and sustainability

Identification Integration Active ownership

� Identify key material and relevant sustainability factors

� In-house industry frameworks as a guide

� Understand the potential impact on returns

� Incorporation of sustainability factors into the investment case

� Consideration of business aspects likely to be impacted

� Standard component of stock research template

� Monitoring and engagement of investee companies

� Private and collaborative engagement

� Proxy voting

� Disclosures and reporting

What is it

Governance and Sustainability is about understanding the factors that may impact the ability of companies to generate durable returns over the long term. It involves employing a broad view of changes taking place in the world and assessing the impact this can have on a company’s cash flows, balance sheet, reputation and, ultimately, corporate value.

Why do we do it

We believe it is material, and this is supported by compelling evidence that governance and sustainability factors are linked with long-term business performance – and thus risk-adjusted returns for shareholders. In our view it is not only an important way of isolating risks, but it is also a key lens through which long-term opportunities can be identified.

Our particular emphasis on governance stems from a belief that this is the

fundamental determinant of long-term performance. Problems here are more

often than not reflected in a company’s environmental and social track record, making it a

reliable proxy for broader sustainability.

David SheasbyHead of Governance and Sustainability

John PickardHead of Investment

IDENTIFICATION What we look at

This is a non-exhaustive list of some of the factors we consider as part of our fundamental analysis. The level of research and engagement varies depending on region, sector and the materiality of the issue in question. The overarching aim is to assess the extent to which ESG factors will contribute to/detract from the long-term value of a firm.

Governance

We value transparency and clear accountable governing structures, giving considerable attention to the extent to which a company demonstrates alignment with the interests of long-term investors.

n Board leadership, diversity and independence

n Management remuneration

n Shareowner rights

n Succession planning

n Accounting and audit standards

Environmental

Knowing how a company identifies and manages potential environmental issues helps us to understand how it is preparing for changes to regulation and disclosure requirements.

n Pollution

n Water usage

n Climate change and carbon emissions

n Energy efficiency

n Resource management

Social

How a company treats its people, its customers and other stakeholders, can give valuable insight into its culture, a good proxy for long-term business success.

n Data protection and privacy

n Equality and diversity

n Community relations

n Human capital management

n Product safety and liability

n Supply chain management

Through the governance lensOur analysis will always start with governance, as we believe this is a fundamental determinant of long-term performance and thus the sustainability of a business. We feel that governance is not acknowledged enough when it works well, though, ironically, it is frequently targeted when it fails. Critically, as global investors, we cannot use a one-size-fits-all approach given the different traditions and levels of corporate maturity in many parts of the world.

As an example, many Asian companies are still characterised by owner management – reflecting their family origins – or by a significant government shareholding. In other words, while there are many unambiguous ‘red flags’, our assessment of the quality of governance will take into consideration the local context so as not to unduly penalise a company that may actually be the best governed among its regional peers. Importantly, problems here tend to go hand in hand with issues on the environmental and social front, making governance a very useful weathervane for the broader sustainability of a business. And the destructive impact that a detour from best practice can have is evident. Examples abound, from Volkswagen to BP and Tesco – all textbook cases of governance errors cascading to the detriment of shareholders.

Our analysis will always start

with governance, as we

believe this is a fundamental determinant

of long-term performance and thus the

sustainability of a business.

INTEGRATION Governance and sustainability factors are integrated into our fundamental analysis and decision-making. We make both qualitative and quantitative assessments of issues deemed material to long-term performance, using proprietary frameworks to ensure that we focus on the most relevant issues/indicators in each industry.

Examples of governance and sustainability integration for the reporting period

ANTOFOGASTA

Chilean mining company

Issue:

The company requires access to a scarce water resource in order to operate its copper mines – water is critical to copper production. The main issue is that these increasingly scarce water resources are also required by the local communities.

How we integrated into the investment case:

When we considered this company we understood that without addressing the issue the company faced, it would potentially lose its license to operate mines where they could impact the local communities. With an attractive asset base and return profile, the company chose to address the situation by proposing investing in a desalination plant to serve the local community. This will incur substantial costs and we incorporated this into our modelling of the company.

SEB

Swedish banking group

Issue:

SEB is facing the same cost pressures as many banks but has adopted a much more engaged and inclusive approach to managing these costs. As a result, staff turnover is low, morale high and customer service excellent.

How we integrated into the investment case:

We were interested in how this bank had approached the cost challenge. By setting cost ceilings for each business area and actively engaging with employees, SEB has managed to avoid the large-scale redundancies of other banks. The resulting lower staff turnover has had a positive impact on morale, customer service and, we believe, therefore on the risks facing the group. We recognised this positive outcome by assigning a lower cost of capital to the group.

LLOYDS

UK banking group

Issue:

We were interested in Lloyds for its extensive franchise, simplified business model and exposure to consumer and corporate lending in developed markets with faster economic growth. It was also moving to a position where it could begin to pay significant dividends again. As a UK group however, it remains exposed to regulatory scrutiny and in particular potential liabilities from historic mis-selling.

How we integrated into the investment case:

When modelling the company, we considered the size of any potential additional liabilities. We also looked at the steps taken to address the shortcomings in the bank’s processes for avoidance of any potential recurrence.

MAGNIT

Russian retail company

Issue:

Magnit was confronted with new risks associated with regulations to protect consumers in the face of large increases in food inflation and with a large workforce it was also facing potentially higher labour costs.

How we integrated into the investment case:

The company has a very strong track record of margin expansion over time. However, with an increasing desire to bring the company in line with best practice in terms of sustainability and an increased likelihood of the need for wage increases, we adjusted our margin and profit forecasts to reflect these risks. That said, this is a business that we continue to believe offers very attractive potential and are encouraged by the changes it is making.

PAGE 6

Reporting period: 1 January 2015 – 31 December 2015.

ACTIVE OWNERSHIP Active ownership, or ‘monitoring and engagement’, is an essential part of being a shareholder. As stewards of our clients’ capital, we have to make sure that their interests are not misaligned with those of company management, e.g. through inappropriate remuneration practices or an undue focus on the short term. Direct engagement allows us to improve our understanding of investee companies, both to make our voting decisions better informed and, where necessary, to steer management in the right direction. Again, the materiality and immediacy of a given issue will generally determine the level of our engagement, and although the majority is conducted privately (‘one-to-one’) we are open to doing this on a collaborative basis when deemed more effective.

Number of engagements Engagements by theme

Engagements shown are for the period 1 January 2015 – 31 December 2015.

125 Number of companies privately engaged

25 Number of companies engaged via collaborative initiatives

65%10%

5%

20%

Governance only

Social only

Environmental only

Overlapping ESG issues

Governance matters

Much of our private engagement in the reporting period was focused on governance issues and business strategy. We take a holistic approach to governance and as global investors recognise that we cannot use a rigid template here, as different regions exhibit their own unique characteristics. That said, there are a number of engagement topics that have been common across markets. Remuneration continues to be a focus, particularly the lingering disconnect between rewards and performance or, more commonly, inadequate disclosure. Our engagement in this area has focused on these two aspects and involved letters, conference calls and face-to-face meetings with company management or the board. Importantly, this engagement often informs how we cast clients’ proxy votes.

We recognise that boards are under increasing pressure from some of the challenges presented by rapid change in issues ranging from technology to climate change. In some of these areas we have chosen to work together with other investors, joining collaborative engagements looking at, for example, water usage in the agricultural supply chain.

PRIVATE ENGAGEMENT ACTIVITY

Below are some examples of our private engagement activity for the reporting period.

We have chosen not to name companies where engagement is ongoing.

TELKOM

South African telecoms company

Reason for engagement:

Having reviewed the agenda for the upcoming AGM, we noticed that very generous financing terms were being offered to company directors to purchase shares. We contacted the company to discuss this and express our view that this was not in line with best practice.

Outcome:

Following our discussion and ahead of the AGM, the group notified us that it was going to amend its policy and bring it in line with best practice.

TDK

Japanese industrial company

Reason for engagement:

The company was looking for guidance and advice on how to improve its governance and sustainability disclosure. We had met the company management in 2014 and talked to them at that stage about disclosure and the new Japanese Corporate Governance Code.

Outcome:

The company has decided to issue its first sustainability report and we have provided input and feedback on this, alongside three other experts. Our feedback has also been posted on its website. The company has taken on board our input. We will monitor future reporting to track what improvements the company continues to make.

ASX Ltd

Australian financials (security exchange)

Reason for engagement:

We engaged with ASX to learn more about the reasoning behind changes to CEO remuneration as well as to understand a broader external board review that was being conducted.

Outcome:

The firm disclosed the level of information required and we were happy with its explanations.

AGL Energy Ltd

Australian utilities company

Reason for engagement:

In July 2015, we met with the AGL chairman and a director on the AGL remuneration committee to better understand the complex executive remuneration calculation and board governance structure at the firm. We also used this engagement as an opportunity to find out more about how AGL plans to lower carbon emissions.

Outcome:

New board members have since been appointed to the AGL board. The firm has taken steps to simplify remuneration calculations and is moving forward with plans to invest in lower carbon emission sources of power.

PAGE 8

Reporting period: 1 January 2015 – 31 December 2015.

Indian resources group

Reason for engagement:

This group has a poor safety track record and has also seen its operations generate clear negative externalities. We were looking to identify ways the company could improve its safety track record and mitigate the impact on the environment and local communities.

Outcome:

The company has already made commitments to improve safety and is focused on reducing the environmental and local community impact of its operations. This engagement is ongoing and we continue to monitor

progress.

UK pharmaceutical group

Reason for engagement:

Our main concern was the remuneration structure at this acquisitive group. We wrote to the company outlining our specific concerns – notably around CEO pay and the metrics used to assess the long-term incentive plan rewards.

Outcome:

We held a conference call with the chair of the remuneration committee at which we outlined our concerns and expressed our views as to how we believed improvements could be made. The company was receptive to our views and will be amending its remuneration approach. We subsequently spoke to the CFO and the remuneration consultants for the group to provide further input into the process and provide some examples of best practice. This engagement is ongoing.

COLLABORATIVE ENGAGEMENT ACTIVITYAlthough most of our engagement is directly with companies, we have participated in a number of collaborative efforts to address specific issues at companies we hold. Finding a coalition of like-minded shareholders is a good way of sharing knowledge and can generate more tangible results more effectively than when acting alone. The following are a few examples of activities we are and have been involved in:

Employee relations Improving company practices and enhancing disclosure from global retail companies on issues material to productivity and financial performance, including employee turnover, employee training and employee engagement.

Status: complete

Hydraulic fracturing (‘fracking’)

Improving disclosure and encouraging the adoption of best practice in the areas of governance/strategy, water use and quality, air emissions, community impact and consent.

Status: ongoing

Water risks in the agricultural supply chain

Improving disclosure and encouraging the adoption of best practice from food, beverage, apparel, retail and agricultural companies based on their exposure to water risks.

Status: ongoing

Cybersecurity The PRI has assembled an advisory committee of investors to build a collaborative engagement project on cybersecurity that will begin in early 2017. We will work with the rest of the committee members to refine the scope of the forthcoming engagement.

Status: begins early 2017

The trademark shown is that of the respective owner and is used for descriptive and illustrative purposes only. The company trademark shown is not in any way associated, or to be deemed to be associated, with Martin Currie or its group companies.

ENGAGEMENT CASE STUDYWe actively engage with investee companies in order to better understand what motivates them and the mechanisms in place for decision-making. In our view, this is an essential part of being a bottom-up investor, given the long-term nature of many of the themes which can impact the sustainability of a company’s business model. This is why we will engage privately and collaboratively when we have identified issues that are material. We strongly believe the value of a collaborative approach to engagement comes from the forum it creates to share insights and leverage collective expertise. So when the opportunity arose to join a retail-focused engagement initiative by the UN-supported Principles for Responsible Investment (PRI), we were keen to participate.

Andrew MathewsonPortfolio Manager Global Emerging Markets

PAGE 10

It may seem self-evident that treating employees well is good for business, but in a world obsessed with the reporting of short-term financial results, transparency around such qualitative factors is often unsatisfactory. In 2013, the PRI launched a co-ordinated initiative, bringing together 24 investors representing US$1.5 trillion of assets, with the aim of improving disclosure and employee relations practices at 27 global retail companies. This 16-month long project dovetailed with our own efforts, and as one of the firms in this group − Magnit − is a holding in our Global Emerging Markets strategy, we volunteered to take the lead on this particular engagement.

The primacy of human capital management

As long-term investors, we do not just seek alignment with top management and other investors, but also with the interests of the employees of a business. As woolly as it may sound, companies that do not cultivate the right ethos (show due appreciation towards the workforce) are storing up trouble in a world where labour is increasingly mobile, and consumers evermore discerning. In the retail business, the impact of a disgruntled workforce is fairly obvious given the labour-intensity of the sector – characterised as it is by a large number of customer-facing employees. But, contrary to what one might expect, disclosure in this area has, by and large, been disappointing. Company attitudes towards these factors fall on a spectrum: some underestimate it because they do not understand it; others acknowledge that it is important but do not dedicate sufficient energy to implementation; and some think that it is important but do not take the time to report that they are doing it. The challenge for investors like us is to ascertain whether this is merely a communications issue or reflective of deeper governance problems.

Material key performance indicators (KPIs) in the retail industry

While carrying out the groundwork for the initiative, the PRI isolated four key KPIs that were most strongly correlated with financial performance:

n Employee turnover

n Employee absence

n Employee training

n Employee engagement

Needless to say, the first two are at least in part a function of the latter two, and easily quantifiable. As red flags go, we find that a high staff turnover (relative to the industry average or a company’s own history) is a reliable indicator of a dysfunctional business, and are thus far from surprised that many firms are reluctant to reveal this. Weak engagement with employees tends to create ‘us-and-them’ divides between staff and management – an environment that is not conducive to high-quality customer service. By the same token, firms that do not invest in their employees are unlikely to attract and retain the talent needed to build a business with real longevity. In short, for us to feel sufficient conviction in the sustainability of a company we need to know that human capital is managed wisely, with a firm eye on the long term.

We have found that poor governance often is a good proxy for problems

elsewhere, and thus a crucial lens through which long-term corporate

prospects should be gauged…

Red flags concerning employee relations with global retailers

No reporting on employee-related KPIs

No reporting on performance against KPIs, or narrative on that performance over time

No demonstrated awareness of employee relations at the most senior level

The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the securities discussed here were, or will prove to be, profitable.

The case of Magnit

Magnit is a Russian food retailer that has been growing at a very brisk pace over the past decade. We have held the company in our Global Emerging Markets portfolios since December 2012, and although a laggard when it comes to governance and sustainability, we felt that this was due more to poor disclosure than any major deviation from best practice. For context, it is worth noting that Russian companies in general score badly in these areas – especially compared with developed market peers. The added weight of the signatories to this specific initiative proved to be an effective combination for engaging with Magnit.

Following the engagement, Magnit appointed Anna Kazantseva, Investor Relations, to improve disclosure in this area, and for the first time, published KPIs detailing company performance against indicators relating to employee relations, including turnover and training. This is a fantastic outcome for the engagement and a positive step forward for Magnit. In addition, the company has proactively communicated its approach on the consideration of social and governance factors such as supply chain management and board structure on its website, and committed to doing the same for environmental factors in the future.

Significant progress has been made already and Magnit continues to show its commitment to continuous improvement by engaging to raise its understanding of best practice. Although more work is needed to develop these processes, we feel encouraged by Magnit’s impressive progress and receptiveness to our feedback and will continue to monitor how it addresses disclosure.

‘At Magnit, we welcome the increasing interest from investors regarding our strategy for building a well-governed and sustainable business and have made a concerted effort to increase disclosure and communication on these matters. Engaging with the PRI and Martin Currie has been very helpful, and we fully believe that strong employee relations and the disclosure of our practices is key to our long-term business success.’

Timothy Post, Head of Investor Relations, Magnit

The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the securities discussed here were, or will prove to be, profitable.

Return-on-engagement

The outcome of the PRI initiative was broadly positive, with 22 of the companies involved improving their reporting and three improving their performance. The greatest progress seen in the areas of employee training and employee engagement. The top performers in terms of disclosure improved their score by 26%, while the average improvement among all 22 target firms was 11%. Importantly, in many instances the problem was not that companies did not measure some of the KPIs in question, but simply that they were not making this publicly available. The investors involved managed to discuss their concerns with members of senior management at 11 of the companies in question – not a decisive triumph, but a good start. All in all, it is fairly safe to say that the result would have been less satisfying if the 24 investors were acting individually.

Why does this matter?

Anyone who has examined the academic literature cannot fail to notice that the evidence is in; i.e. material governance and sustainability – ESG – factors unambiguously correlate with financial and operational performance over the long term. At Martin Currie, we value transparency and clear, accountable governance structures. We have found that poor governance often is a good proxy for problems elsewhere, and thus a crucial lens through which long-term corporate prospects should be gauged. That is why we engage with companies – to better understand their drivers and mechanisms for making decisions. In our view, asset managers who fail to look at the ‘bigger picture’ could be missing out on return-enhancing opportunities or exposing their portfolios to long-term sustainability risks.

Visit www.unpri.org to read the full PRI report – ‘An investor guide to engaging retailers on employee relations’.

PAGE 12

477Number of shareholder meetings at which we voted in line with management

743meetings

8,518resolutions

7,786Number of resolutions voted in line with management

Pan-Asia NorthAmerica

Europe Rest ofworld

Middle East& Africa

58%

15% 13%9%

6%

Governance& control

Directorrelated

Compensation Businessmatters

Other

43%

31%

14%

9%

3%

266Number of shareholder meetings at which we voted against management on at least one resolution

732Number of resolutions voted against management

VOTING ACTIVITYWhen voting proxies on behalf of our clients, we recognise that we have a duty to act in their best interests and this means paying attention to the long-term economic impact of our voting decisions. Through the course of the year a number of common themes were evident at company annual general meetings (AGMs). Remuneration continued to be in focus on both sides of the Atlantic, in particular levels of disclosure and the alignment of pay and performance. In the US there have been an increasing number of proxy access proposals being put forward – in general many of these have merited our support. A lack of sufficient independent director representation on boards has also been a common issue and in Asia we continue to see requests for large, potentially dilutive share issuance authorities. Elsewhere, we have also seen a significant rise in climate change resolutions at AGMs, reflecting growing pressure on companies to plan for a low-carbon future. We review all meeting proposals on a case-by-case basis, again with our clients’ best interests at the core of all our decisions.

Geographical breakdown of votes against management Categories for votes against management

Shareholder meetings

Resolutions

Reporting period: 1 January 2015 – 31 December 2015.

Climate change

This remains a key area of research for us, in particular following the successful UN climate negotiations in Paris last December. We are focused very much on the practical implications of the summit; what path governments will tread down and the measures that companies are taking in mitigation and adaptation to climate change. We continue to work on understanding the carbon risk within our clients’ portfolios but also assessing how the move to a low-carbon economy will impact demand patterns, and on identifying potential beneficiaries of this transition.

Water

With global demand continuing to surge as populations grow and diets change, the lack of clear pricing means there continues to be limited incentive for efficient water use. We already recognise this as an issue and are participating in a collaborative engagement led by the PRI on water use in the agricultural supply chain. With a number of countries depleting non-replenishable aquifers, concerns about the potential impact of climate change on fresh water supply is making this a real focal point for both investors and companies. Many companies have poor water management strategies and a lack of awareness of the risks. We see an ongoing opportunity to engage with businesses on this issue and look to expand our understanding of the potential technological solutions that can contribute to more efficient use.

Cybersecurity

The importance of cybersecurity has been underlined by a string of major incidents in recent years, with attacks becoming ever more sophisticated and the resources needed to ward them off consequently greater. It goes without saying that the stakes are very high. Among other things, inadequate defences can compromise customer and business data, jeopardise operational systems or leak intellectual property, with severe impacts on business and therefore shareholders. In our conversations with companies, we will continue to seek transparency around their efforts, including how they mitigate the risks and if they have robust enough recovery action plans in place in the event of a breach.

Technological disruption

We live in a world of constant change, and for companies to maintain their competitive edge the emphasis has to be on innovation. While the topics highlighted here present challenges to many businesses and clearly will require them to adapt, they also present great opportunities for those that can help solve the problems in question. Our work continues to focus on identifying those firms that are innovating, embracing the change and providing potential solutions across all steps of the value chain.

OUTLOOKWe have built considerably on our governance and sustainability work over the last year, including the development of our industry frameworks, set up to identify the most material factors common to particular industries. As part of our focus on long-term sustainable growth, we are also thinking carefully about a number of highly relevant themes that will touch a broad range of industries. Some of these are:

PAGE 14

Important information

This information is issued and approved by Martin Currie Investment Management Limited (‘MCIM’). It does not constitute investment advice. Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested. The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the securities discussed were, or will prove to be, profitable.

Martin Currie Investment Management Limited, registered in Scotland (no SC066107) Martin Currie Inc, incorporated in New York and having a UK branch registered in Scotland (no SF000300), Saltire Court, 20 Castle Terrace, Edinburgh EH1 2ES.

Tel: (44) 131 229 5252 Fax: (44) 131 222 2532 www.martincurrie.com

Both companies are authorised and regulated by the Financial Conduct Authority. Martin Currie Inc, 1350 Avenue of the Americas, Suite 3010, New York, NY 10019 is also registered with the Securities Exchange Commission. Please note that calls to the above numbers may be recorded.