The Directors set the investment policy, which is to invest in a diversified portfolio consisting mainly of quoted UK equities which will normally comprise between 50 and 70 individual equity holdings. In order to reduce risk in the Company without compromising flexibility: a) no holding within the portfolio should exceed 10% of total assets at the time of acquisition; and b) the top ten holdings within the portfolio will not exceed 50% of net assets. The Company may invest in convertible preference shares, convertible loan stocks, gilts and corporate bonds. The Directors set the gearing policy within which the portfolio is managed. The parameters are that the portfolio should operate between holding 5% net cash and 15% net gearing. The Directors have delegated responsibility to the Investment Manager for the operation of the gearing level within the above parameters.