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Stock Spirits is a London-listed Central European spirits producer, whose main domain is the Polish market. The Company had its IPO at the end of 2013 and the share price has struggled ever since its peak in mid-2014. A tax duty increase in Poland during 2014 changed the business environment followed by increased competition resulting in a continuous market share loss for the Company, despite their portfolio of strong brands, good distribution and solid financial position. Poor third quarter results in 2015 and a further decline of the share price attracted new shareholders who have challenged the Buckinghamshire-based management team of Stock Spirits.

Western Gate Investments is the investment vehicle of Portuguese businessman Luis Amaral and the holding company has recently become the largest shareholder of Stock Spirits, owning close to 10 percent of the shares outstanding. We believe, on principle, that the largest shareholder of any company should have the right to board representation. In addition, being the main shareholder and chairman of Eurocash, one of the largest wholesale cash and carry operators in Poland, Luis Amaral brings with him a successful operational track record as well as industry and regional knowledge. During Western Gate Investments' assessment of Stock Spirits, they have identified a number of critical issues for the Company which are affecting their operational ability and cost efficiency. As a result, Western Gate Investments has requested an independent review of the current strategy by nominating two new directors to the board.

Given the lengthy period since the issues started with the duty increase in Poland, the loss of market share and management turmoil, we support the need for an immediate review of the current strategy in order to turn around the Company┬┤s core business. We support Western Gate's proposal of adding two independent directors to the board as we believe that this is a first and important step in the right direction for the Company.

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Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager's skill, the fund's risk profile and management fees. The return may become negative as a result of negative price developments.