EMHP Company Profile and Investment Philosophy Feb16

EMHPRESCIENT INVESTMENT MANAGEMENT

BUSINESS PROFILE

2016

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TABLE OF CONTENTS

ABOUT EMHPRESCIENT INVESTMENT MANAGEMENT (PTY) LTD ........................................................... 3

COMPANY INFORMATION .............................................................................................................................. 5

BUSINESS BACKGROUND AND CORPORATE PHILOSOPHY .................................................................... 6

OWNERSHIP ..................................................................................................................................................... 7

DETAILS ON THE MANAGEMENT STRUCTURE OF THE COMPANY ....................................................... 10

KEY DECISION MAKERS – INVESTMENT MANAGEMENT ......................................................................... 12

INVESTMENT TEAM ....................................................................................................................................... 12

PRODUCT RANGE AND ASSETS UNDER MANAGEMENT ........................................................................ 13

ASSETS UNDER MANAGEMENT .................................................................................................................. 13

CONTRACTUAL SITUATION AND BUSINESS PRACTICE .......................................................................... 14

CORPORATE GOVERNANCE AND PROXY VOTING .................................................................................. 17

RISK MANAGEMENT AND COMPLIANCE .................................................................................................... 18

EMPLOYMENT EQUITY ................................................................................................................................. 19

EMHPRESCIENT UNIT TRUST LIMITED ...................................................................................................... 21

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ABOUT EMHPRESCIENT INVESTMENT MANAGEMENT (PTY) LTD

AN EXECUTIVE SUMMARY

Quantitative Investment Management House

EMHPrescient Investment Management (Pty) Ltd. is a Namibian quantitative investment management

house, which was launched in 2011 and is essentially a partnership of people. EMHPrescient Investment

Management (Pty) Ltd is a registered asset manager (NAMFISA No. 25/12/80).

Private Company, Management and Staff owned

EMHPrescient Investment Management is jointly owned by EMHCapital (Pty) Ltd, a Namibian financial

services company and Prescient Holdings, a global company with assets under management exceeding

R140 billion in 2013. EMHCapital shareholders own 51% EMHPrescient Holdings, which owns 100%

EMHPrescient Investment Management. Prescient Holdings owns 49% of shares in EMHPrescient Holdings.

A minimum of 75% of EMHCapital is owned by local Namibians. All ownership in EMHPrescient Investment

Management is direct and not deferred or options.

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INVESTMENT PHILOSOPHY EMHPrescient is a quantitative investment manager. At EMHPrescient, we define risk as the probability of

not meeting the investment objectives of the client. To this extent, positions taken in portfolios are

mathematically tested using different scenarios to determine portfolio outcome. This ensures that positions

taken will, on the upside, deliver on client expectation, while at the same time, in down markets, it will not

breach the risk objective of the client. The core of EMHPrescient’s investment philosophy is capital

preservation and the management of downside risk.

QuatPlus® Process

EMHPrescient’s investment philosophy gives rise to a distinctive style, QuantPlus® which defines the

investment process that Prescient Investment Management employs. The process is essentially an

‘enhanced’ benchmark process, with the client’s risk limits determining the size of positions taken relative to

the risk benchmark. “Quants” refers to the quantitative process where position outcome is tested to ensure

that it will meet the client’s objectives. “Plus” refers to the process where the enhancements and positions

are systematically taken to generate additional performance above the benchmark, while still adhering to the

client’s risk limits.

INVESTMENT PROCESS EMHPrescient starts by defining a risk benchmark as well as a performance target. The risk benchmark

describes the minimum return under adverse market conditions. The portfolio will be structured, i.e. position

deviation from the benchmark will match the risk tolerance to ensure that at worst the return will meet the

risk or minimum return benchmark. At the same time, should the market condition favour the position

direction, the client return will be maximised given the risk tolerance or benchmark.

Consistent Outperformance of Benchmarks

Since inception in 1998, the various Prescient QuantPlus® funds have delivered consistent, incremental out-

performance above the clients’ required benchmarks, while simultaneously adhering to the risk

requirements.

Investment Management, Operations (Administration), Legal & Compliance

Investment management decision making, administration, and legal and compliance functions will be

undertaken by EMHPrescient in Windhoek, Namibia, with ongoing technical support of Prescient Investment

Management in Cape Town.

Enhancements

Benchmark

Risk limits

QuantP

lus®

Return opportunity

Enhancements

Benchmark

Risk limits

QuantP

lus®

QuantP

lus®

Return opportunity

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COMPANY INFORMATION

Full name of the company:

EMHPrescient Investment Management (Pty) Ltd

Company registration:

2009/811

NAMFISA registration:

25/12/80

Number of staff in our asset management business:

EMHPrescient currently has four (4) local Namibia staff members, three (3) local and two (2) international

directors, supported by a technical, investment advisory, and management staff complement of one hundred

and three (103) at Prescient Investment Management in Cape Town.

Details of Associate Companies:

EMHCapital (Pty) Ltd. - Registration No. 91/533

EMHPrescient Holdings (Pty) Ltd. - Registration No. 2011/0040

Prescient Management Company Ltd. - Registration no. 2002/022560/06

Prescient Life Limited - Registration No. 2004/014436/06

Prescient Administration Services (Pty) Ltd - Registration No. 1998/023727/07

Partnership and alliances with other service providers:

We do not have partnerships and alliances with other service providers.

International alliances:

There are no relationships at this stage.

Contact details:

EMHPrescient Investment Management’s head office is based in Windhoek, Namibia. Our physical and

postal address, and contact details are as follows:

Physical address: Postal Address:

18 Liliencron Street PO Box 23612

Suites 16 - 17 Windhoek

The Village Namibia

Windhoek, Namibia

Telephone no: Fax no:

+264 61 402 092 +264 61 401 111

Email address: Internet website:

[email protected] www.prescient.co.za

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BUSINESS BACKGROUND AND CORPORATE PHILOSOPHY

“EMHPrescient Investment Management was established on the 26th January 2011 and is a NAMFISA

Registered, quantitative investment Management Company specialising in the portfolio and risk management

of institutional, pension, provident fund and retail assets”

Our expertise encompasses the management of portfolios comprising interest bearing, equity and derivative

instruments. EMHPrescient Investment Management also formulates and implements risk management

structures to enhance the risk-adjusted return profiles of portfolios. EMHPrescient’s first objective is to

consistently achieve superior performance within acceptable levels of risk. To this end we aim to remain in

the upper quartile of the industry for fully discretionary mandates in with respect to the appropriate

performance tables published. For specialised mandated funds our aim is to outperform the benchmarks set

by our clients. EMHPrescient is dedicated to service excellence and full disclosure.

Founding Philosophy “EMHPrescient is essentially a partnership” Core to EMHPrescient’s philosophy is the creation of an organisation with the requisite skills, global markets

expertise, and value for money, which corporate clients have come to expect from a leading financial

services company. We are an entrepreneurial team with full equity ownership. The benefit of this structure

is a singular dedication to looking after our clients, and a desire to design and continuously improve upon the

products, which we offer. Our philosophy merges the client’s return objectives with our investment aims.

The focus is not on guessing where the markets are going but rather on optimising the risk/return profile of

the funds under management.

Corporate Philosophy EMHPrescient has positioned itself as a new millennium investment house in Namibia. Our objectives are to: Achieve superior and consistent investment returns

Effectively manage risk

Provide highest levels of service

Adopt a business policy aligned to empower historically disadvantaged Namibians

Recruit and train staff from these communities

Align the corporate image to the broader goals of Namibia and Vision 2030.

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Vision Consistent with Vision 2030, EMHPrescient has embarked upon a meaningful asset management skills, and

operations responsibilities transfer to ensure growth and sustainability in Namibia’s industry talent

pool. Investments in human capital, and skills training to support back, and middle-office functions, which

have not been characteristically Namibian, are being implemented over a three-year time horizon. Some

immediate and planned transferable critical support functions to Namibia include, but are not limited to:

Cash Management

Administration and management information systems

Securities custody

NAV calculations

Client reporting and performance measurement

Post-trade processing of various products (including derivatives)

Integrating the aforementioned multi disciplinary support functions to sustain operational excellence is a

Namibian client expectation, and is essential to EMHPrescient’s ability to maintain a distinct competitive

advantage within the asset management industry locally and globally.

OWNERSHIP

EMHPrescient is a partnership of people.

Since its inception, the shareholders of EMHPrescient have been cognisant of the changing economic

landscape of the Namibian environment. In 2011, the founder members ensured that 51% of the

shareholding would be held by Namibians. All ownership is direct and not deferred.

EMHPrescient’s ownership structure is as follows:

51% 49%

EMHPrescient Holdings (Pty) Ltd.

EMHCapital (Pty) Ltd.

Prescient Holdings (Pty) Ltd.

EMHPrescient Investment Management (Pty) Ltd.

100%

EMHPrescient Unit Trust Ltd. (MANCO)

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EMHPRESCIENT INVESTMENT MANAGEMENT DIRECTORS

Dr Leake Hangala

Chairman

Ester Kafidi

Director

Theo Mberirua

Director

Grant Marais

Director

Herman Steyn

Director

Meyer Coetzee

Director

Dr Leake S. Hangala: Chairman As former Standard Bank Namibia Chairman for seven years, Dr Hangala has held executive level banking

and investment responsibilities for numerous MME’s and large industry acquisitions and related

transactions. He also served as Chief Executive Officer for Nampower, Namibia’s largest public utility and is

the owner of Namibia Motors, a distributor of GM, Isuzu and Opel brands. Dr Hangala has significant

telecoms experience as a former shareholder and Director of Corporate Strategy for wireless network

operator Cell One. He brings extensive mining experience as Chairman of Evi Mining and as a former

Permanent Secretary of the Ministry of Mines and Energy in Namibia. Dr Hangala holds a Ph.D., a MSc. and

a BSc. in Geology and Mineralogy from the University of Helsinki in Finland. In addition, he also holds a

Certificate in Executive Management from Harvard Business School’s Advanced Management Program and

a Certificate in Management from the John F. Kennedy School of Government at Harvard University.

Ester T. Kafidi: Director Ester started her career at Bank Windhoek were she held various positions for a period of 6 years. She

brings extensive Cost and Management Accounting experience having worked as a Management

Accountant for both Langer Heinrich Uranium Mine and Namwater for a combined period of 7 years. She

also served as a Financial Manager for the Global Fund Programme under the Ministry of Health and Social

Services. Ester currently works as Financial Planner for manufacturing at SABMiller Namibia. She holds a

National diploma in Accounting and Finance from the Polytechnic of Namibia and well as a Bachelor of

Technology Degree in Cost and Management Accounting from the Nelson Mandela Metropolitan University,

Port Elizabeth. She is currently busy studying towards a CIMA qualification at managerial level.

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Theo Mberirua: Director Theo is a leader in Namibia’s banking community having served as both the managing director of Standard

Bank Namibia, and the holding company, Standard Bank Namibia Holdings for more than six years. He also

served as Managing Director of Telecom Namibia, and as CEO of Namibia Post and Telecom Holdings,

responsible for the investment management and property portfolios. Theo is a highly sought after expert and

offers opinion on several investment and financing projects in Namibia and the SADC region. He has held or

currently holds directorships with companies including but not limited to, Trustco, NIP, Omnitel, Plastic

Packaging, Liberty Life, MTC, First National Bank, Sanlam Unit Trust, Namport and Stanlib. Theo holds an

MBA in Accounting and Finance from Baruch College of the City University of New York and a Bachelor of

Science degree in accounting. He has participated in several executive management programs including the

INSEAD France Senior Executive Program, and the International Program for Telecommunications

Management in Sweden.

Grant Marais: Director Grant served as an Executive Director in the capacity of Deputy Managing Director with The Standard Bank

Group subsidiaries in Botswana and Namibia. He has 30 years banking experience, in all facets of banking.

Executive expierance has been enhanced through Executive level exposure to the Mining industry dealing

with aspects of sustainability, communications and public relations for Swakop Uranium which is the largest

uranium mine in Africa and the second largest in the world. Grant holds a Commerce degree, with majors in

economics and development economics through UNISA and a bankers degree through the Institute of

Bankers in South Africa.

Herman Steyn: Director Herman has been involved in the investment management industry since 1985, having held senior

management positions in several established asset management companies. He began his investment

management career when awarded a bursary from Old Mutual, studying a B.Bus.Sc., majoring in Actuarial

Science, Statistics (Honours) and Economics at the University of Cape Town, completing his B.Bus.Sc.

(Honours) in 1984. After a period at Old Mutual, he co-founded an asset management company. In 1993

Herman started the first index tracker fund, the Composite Unit Trust, in South Africa. He later sold the unit

trust management company to Investec, joining Investec Asset Management in 1995 where he established

Investec Asset Management's international fund management capability, setting up their fund structures in

Dublin. He was also responsible for the quantitative fund management that included local and international

index funds, bonds, derivatives and asset allocation. In 1998 Herman and Guy Toms founded Prescient

Investment Management, which specialises in quantitative investment management. Prescient applies its

quantitative techniques to cash, bonds, equities, balanced portfolios and asset allocation.

Meyer Coetzee: Director Meyer heads up the retail business at Prescient Investment Management, a wholly owned subsidiary of the

JSE Listed Prescient Limited and is primarily responsible for the design and implementation of the sales and

distribution strategy in the retail environment. His career started with Alexander Forbes in 1991 as an

actuarial assistant in their retirement fund division.

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In 2000 he joined a niche asset manager in Cape Town as Marketing Manager and in 2001 became a

Product Development Consultant with Galaxy Portfolio Services Pty (Ltd), the Linked Investment Services

Provider within Old Mutual, which later became Fairbairn Capital Pty (Ltd). In 2004 he was appointed as

head of Product Development and Portfolio Management at SYm|mETRY Multi-Manager, a position he filled

until his appointment at Prescient Investment Management in September 2013.

Meyer is a Qualified Actuary and a member of the Actuarial Society of South Africa, a CFA Charterholder

and a member of the CFA Institute and a Certifies Financial Planner® professional registered with the

Financial Planning Institute. Meyer is married to Liza and has one daughter, Isabella (3).

DETAILS ON THE MANAGEMENT STRUCTURE OF THE COMPANY

EMHPrescient Investment Management has a staff complement of four (4) based in Namibia. All

operational, marketing and investor relations initiatives for the business are primarily spearheaded by Dr

Leake S. Hangala, Managing Director. Melanie Allen, formerly from Charter Asset Management is our newly

appointed CEO and heads up our operations from 1st of June 2013. A Namibian equities research analyst

will at a later date, support research and will assist the Portfolio Manager in daily investment responsibilities.

Board of Directors:

Dr Leake S. Hangala - Chairman

Ester T. Kafidi - Director

Theo Mberirura - Director

Herman Steyn - Director

Meyer Coetzee - Director

Grant Marias - Director

Investment Committee:

Dr Leake S. Hangala - Committee Chairman (Namibia)

Melanie Allen - Member (Namibia)

Eldria Fraser - Member

Guy Toms - Member

Audit-Risk Committee:

Herman Steyn - Committee Chairman

Dr Leake S. Hangala - Member (By Invitation-Namibia)

Melanie Allen - Member (Namibia)

Theo Mberirua - Member (Namibia)

Management:

Melanie Allen - Chief Executive Officer

Henri van Schalkwyk - Financial Manager (Part-time)

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MANAGEMENT AND STAFF

Dr Leake S. Hangala

Chairman

Melanie Allen

Chief Executive Officer

Lizé Ennes

Administration

Ndina Naukushu

Receptionist / Assistant

Melanie Allen: Chief Executive Officer Melanie Allen brings with her a wealth of experience having previously been a director and majority

shareholder at Charter Asset Management, responsible for investment related functions, business

development and fund administration. She also held investment related positions across a number of other

market-leading investment businesses such as Old Mutual Namibia, Namibia Asset Managers and

Pointbreak Wealth Managers. She started her career at KPMG with an internship before moving onto

Namibian Asset Managers where she build up her investment research credentials and gaining experience

on the administration side. She has also worked as an investment product specialist, a broker consultant and

an investment portfolio manager. She holds a B.Compt Accounting and Auditing degree obtained from the

University of South Africa (UNISA) and completed five years of articles at KPMG in 1998.

Lizé Ennes: Administration Lizé handles a wide field of day to day tasks including all aspects of the administration for the EMHPrescient

office. She has a solid track record with an occupational therapy institution, as well as other SME’s in

Namibia. Lizé is currently busy with a diploma in Marketing and Business Management.

Ndina Naukushu: Administrative Assistant Ndina is the company receptionist and assistant and provides anchor support to the EMHPrescient office at

large. She holds a Bachelor Degree in Business administration from the Polytechnic of Namibia.

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KEY DECISION MAKERS – INVESTMENT MANAGEMENT

EMHPrescient operates in an open-plan environment with a current Windhoek staff complement of four (4),

and a supporting Prescient staff compliment of eighty-seven (87). However, all strategic initiatives, and final

investment decisions for the business originate, and are consummated by the local Namibia team. Dr Leake

Hangala is a Founding Member, Director and Executive Chairman. Herman Steyn and Meyer Coetzee are

Executive Directors and also sit on the South African Investment Management committee. Melanie Allen is

the Chief Executive Officer and also sits on the investment committee both at EMHPrescient, and Prescient

Investment Management.

INVESTMENT TEAM

Final decision making, investment management, and global operations functions are primarily the

responsibility of EMHPrescient Investment Management. Notwithstanding the aforementioned, detailed

technical support is provided through our Prescient colleagues in Cape Town. Some of their internal

structures include:

Asset Allocation

Guy Toms - Chief Investment Strategist/Head of Fixed Interest

Laing Du - Head of Multi Asset Classes

Eldria Fraser - Chief Investment Officer

Kevin Dewar - Head of Portfolio Management

The Interest Bearing Team (Bonds and Cash Management)

Guy Toms - Chief Investment Strategist/Head of Fixed Interest

Eldria Fraser - Chief Investment Officer

Farzana Bayat - Portfolio Manager and Analyst

Jean-Pierre du Plessis - Portfolio Manager and Analyst

Teresa Lu - Portfolio Manager and Analyst

Sanveer Hariparsad - Portfolio Manager and Analyst

Terri McGregor - Analyst

Melanie Allen - Chief Executive Officer, EMH Prescient

Ryan van Breda - Legal and Structuring

Joel Wei - Analyst – China

Sheena v/d Merwe - Administration

The Equity Team

Eldria Fraser - Chief Investment Officer

Fazila Manjoo - Portfolio Manager and Analyst

Johan Steyn - Portfolio Manager and Analyst

Mario Fisher - Portfolio Manager

Rasi Maleka - Equity Dealer

Shaun Hu - Portfolio Manager and Analyst

James Deng - Analyst – China

Seeiso Matlanyane - Analyst – Africa

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The Balanced and Derivative Team

Guy Toms - Chief Investment Strategist

Liang Du - Head of Multiclass Asset Portfolios

Martin Hammond - Portfolio Implementation Specialist

Eldria Fraser - Chief Investment Officer

Nafees Hossain - Portfolio Manager and Analyst

PRODUCT RANGE AND ASSETS UNDER MANAGEMENT

EMHPrescient Investment Management offers a range of investment products and services on both a

segregated and unitised basis.

Cash and Money Market Management

Interest-Bearing Asset Management

Equity Management

Balanced Portfolios

Capital Protection Mandates - Positive Return

Global Funds

ASSETS UNDER MANAGEMENT

Our growth in assets since inception.

Current assets under management - N$ 890mil

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400

500

600

700

800

900

Dec-12 Dec-13 Dec-14 Dec-15

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CONTRACTUAL SITUATION AND BUSINESS PRACTICE

Indemnity Cover and Other Insurances

EMHPrescient Investment Management has professional Indemnity and Fidelity Cover as well as Directors,

and Officers liability Insurance to the amount of N$150 million. These policies cover professional negligence

and fraud as well as the operational risk of the business.

Client Research

Due cognisance is taken of the client’s investment objectives, liabilities, tax structures and risk profile in

determining appropriate benchmarks. Portfolios are structured to outperform benchmarks with the same or

lower benchmark risk.

Real Time and Historical Data Input

As part of EMHPrescient’s aim to embrace technology in the investment management process, we monitor

and update portfolios on a real-time basis. The systems are linked to the major stock and bond markets

throughout the world. In addition to live news feeds Prescient also draw on extensive historical databases of

price and economic information.

Internal Investment Systems

EMHPrescient’s decision making process draws on this real time and historical data in conjunction with our

own portfolio, risk management and trading systems. The process is consistent, clearly defined and applied

rigorously. Each member of the team is responsible for specific aspects of research and strategy

formulation, which they present at regular investment strategy meetings. EMHPrescient’s systems

incorporate compliance to ensure that client mandates are adhered to. All trades are allocated on a pro-rata

basis to clients, this ensures that all clients are treated fairly and that portfolio performance is in line for all

like-mandated clients.

Administration

All administration is managed locally by EMHPrescient with technical support by Prescient Administration

Service (Pty) Ltd. This includes the confirmation of transactions with brokers, instructions to the custodian

bank, monitoring of the transaction settlement, and reconciliation of portfolios with the custodian and

reporting to clients. EMHPrescient Investment Management is committed to a policy of transparency and full

disclosure to our clients. Monthly reports are available online and are normally distributed to clients on the

next working day after each month-end. At present, EMHPrescient has access to and utilises Eagle, and T-

Cube Software. This is a portfolio administration, pricing, and record-keeping system. Some of the salient

features of EMHPrescient’s administration allow it service, or provide support to:

In-house clients

Third Party administration

− Segregated and white labelled unit trusts

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Employed Technology

Eagle Investment Systems (Portfolio administration, performance, and reporting)

TCube (Unit holder administration)

Statpro (Compliance)

Compliance

In-house portfolio compliance

Fidelity Cover

Company has N$150M professional indemnity

Directors liability of N$25M

Eagle Investment Systems LLC.

A subsidiary of The Bank of New York Mellon

Founded in 1989

Headquartered in, Boston, USA

Platform Functionality

Investment accounting – Eagle Star

Data Management – Eagle PACE

Performance Measurement – Eagle Performance

Web based/enabled technology, global assets in excess of US $5T

Global Clients > 150 including:

− Deutsche Bank

− JP Morgan

− Charles Schwab

− Schroeders

− Fidelity International

− Freddie Mac

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Client Reporting

Client Reporting In addition to monthly and quarterly statements generated in through the Eagle Investment

System, EMHPrescient also reports back to Clients and the Board of Trustees on a quarterly/bi-annual

basis, as highlighted and agreed in the Portfolio Management Agreements of Service Level Agreements.

Clients may access the Eagle Investment System at any time using a secured and encrypted

username, and password. Reports may be generated on request in addition to the normal end of month

system reporting.

External Checks

The portfolio management and administration functions are kept separate. External auditors investigate our

investment procedures and administration systems annually.

Personal Account Trading

Prescient has a personal account trading policy, which is communicated to all staff when they join the

business. The monitoring function is performed by the compliance officer and all trades are required to be

signed off by the Chairman and MD or compliance officer prior to trading. Should there be any open trading

positions for client accounts, personal trading is not allowed in these positions while they are open.

Conflicts of Interest

EMHPrescient does not have ownership in any derivative provider, or brokerage or securities business.

EMHPrescient may utilise the services of Prescient Securities for some derivative trading, however this is

done on a best execution basis. Although the companies trade under similar names, Prescient Securities is

a separate company. Furthermore, EMHPrescient does not offer any commission, rebates or softing

arrangements.

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CORPORATE GOVERNANCE AND PROXY VOTING

Corporate Governance

EMHPrescient has a code of conduct and ethics is in place and the boards of directors of the various

companies in the group consist entirely of executive and non-executive directors. EMHPrescient’s board

meets formally and minutes of meetings are kept. The audit-risk sub-committee consists of executive and

non-executive members and the group auditors attend these meetings on a bi-annual basis.

Proxy Voting Policy

At Prescient Investment Management we take our responsibilities in managing our clients’ assets seriously

and this includes taking a considered approach to shareholder activism and the exercising of voting authority

over securities comprising our clients’ portfolios. Shareholder activism takes place on two broad fronts:

changes in corporate strategy and in corporate governance. Proxy voting statements contain many

significant and material issues involving shareholder rights and corporate governance issues. These require

careful review and consideration in terms of the impact, which they may have on, not only the sustainability

of the company, but also its impact on its position as a good corporate citizen. EMHPrescient places

particular importance on the following issues embraced within proxy voting rights and corporate governance:

Board Composition & Directors – EMHPrescient believes that the board should comprise an

appropriate balance between executive and experienced non-executive directors who are able to act

independently. Additionally, Prescient supports the appointment of a non-executive chairman. The board

needs to represent shareholders’ interests and not executive management.

Dividend Policy – EMHPrescient is concerned about companies’ dividend policy with particular

awareness around scrip dividends and its dilution effect on existing shareholders. Additionally any

dividend policy should be consistent and demonstrate appropriate use of earnings.

Share Repurchase – Shares repurchase exercises normally impact on the “free float”. Thus, there

needs to be significant earnings enhancement opportunities for such strategies to be in the interest of

shareholders.

Preferential Voting Rights – EMHPrescient is sensitive to the impact, which such proposals can have

on the freedom and breadth of the voting pool.

Environment – Companies employing tactics, substances or processes must divulge the risks and the

strategies to minimise the impact on the environment. There should be appropriate rehabilitation

programs.

Remuneration – The levels of remuneration clearly have impact on company performance and thus

shareholder returns. EMHPrescient would like complete transparency and reporting in this regard

recognising both good and poor performance standards.

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RISK MANAGEMENT AND COMPLIANCE

EMHPrescient regards the following as pertinent to the risk management and compliance strategies of the

business.

EMHPrescient recognises its accountability to all its stakeholders under the legal and regulatory

requirements applicable to its businesses and is committed to high standards of integrity and fair dealing

in the conduct of its businesses. It is committed to comply with both the spirit and the letter of applicable

requirements and will always endeavour to act with due skill, care and diligence. The board and

management of EMHPrescient are ultimately accountable to its stakeholders for overseeing risk and

compliance requirements. The responsibility to facilitate compliance throughout Prescient has been

delegated to the appointed Compliance Officer who supervises the Compliance Function. The

Compliance Officer is responsible for the effective implementation of the Compliance Policies.

BDO Namibia is the group auditors. They are independent and do not reside on any of our boards.

They are invited to attend the audit-risk sub-committee meetings to provide input and to report back on

the annual statutory audit. The group annual audit reports have always been unqualified and in the

annual management report no critical weaknesses have ever been identified.

EMHPrescient reports to NAMFISA for the following:

- EMHPrescient is a registered Asset Management company under the Stock Exchange Control Act

of 1985.

- EMHPrescient is a licensed financial services provider (NAMFISA No. 25/12/80).

EMHPrescient confirms that currently it does not have any litigation issues now or in the past.

EMHPrescient’s systems are continuously reviewed to ensure processes are designed to prevent, detect

and correct any potential errors that might occur. EMHPrescient views monitoring of the systems and

processes as critical to the success of the business and it prides itself in that it is known to clients as being

top-rated in the area of administration.

To give the clients a sense of understanding and comfort on the EMHPrescient processes, clients are invited

to the premises where they have full access to the EMHPrescient business systems and processes

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EMPLOYMENT EQUITY

Core to EMHPrescient’s business philosophy is the creation of an organisation that embraces the positive

spirit, growth and development that partnership and full equity participation in Namibia warrants. We are an

entrepreneurial team with full equity participation. The benefit of this structure is a focused dedication to

looking after the EMHPrescient staff and clients and a desire to design and continuously improve upon the

products and services which EMHPrescient offers.

As a modern investment house in Namibia, the corporate philosophy embraces the following mutually

reinforcing values:

Achieving superior and consistent investment returns in partnership with our client

Adopting a policy aligned to empower historically disadvantaged Namibians

Employment equity has always been regarded as a strategic initiative and is intrinsically linked with our

company’s strategic business plan. Achieving our employment equity objectives will enjoy high prominence.

Affirmative Action Policy

We have a firm and very deliberate affirmative action program. It is our policy to mainly employ historically

disadvantaged Namibians (HDN’s) within our company. We will do this by recruiting analysts directly from

university, and further providing training to company employees to become portfolio managers. In order to

identify talent, EMHPrescient staff may lecture at Namibian institutions of higher learning, and participate in

local recruitment fairs.

Meaningful Skills Transfer and Development

Skills development and transfer of skill is a material requirement of EMHPrescient’s appointments as asset

managers with all its clients. EMHPrescient actively supports, manages and maintains on going skills

transfer programmes to all its Namibian staff and personnel with respect to the broader and more specific

investment process.

Initial preparations for value added, in-depth management and technical mentoring support to EMHPrescient

technical staff, (including the portfolio manager), have already commenced and are being provided over a

deliberate thirty-six (36) month period by Prescient Investment Management. More specifically, cash

management, administration are the more immediate areas of focus and local ownership.

Support for a fully-fledged comprehensive trading team, and a separate locally registered pension

administration business is planned against due diligence. This is part of the cornerstone of our relationship

with the company to ensure that meaningful skills transfer takes is actually realized with measurable outputs.

Further detail is provided in Section Six (6) of the Draft Principles of Cooperation and Understanding

between the two companies. EMHPrescient Investment Management is absolutely committed to making an

active contribution to the broader Namibian community through the education and training of Namibians

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whose ideals correspond with those of our organisation. We aim to ensure that together we become a

success and contribute to the Namibian society as a whole.

Staff

EMHPrescient operates in an open plan environment. We have intellectual and professional capacity that is

strategically placed in the investment team, accessible to all staff. These experienced individuals

competently mentor new staff on a daily basis. EMHPrescient does not apply any monetary retention

strategies.

Procurement

Our aim is to participate in the Namibian market by identifying qualified local suppliers regarding

discretionary expenses on procurement. We continuously seek qualified Namibian alternative suppliers. The

major planned component of our normal expenditure will be in areas where historically disadvantaged

businesses do not presently compete and we are focused on supporting individuals and companies that

meet Namibian criteria in this regard.

Socially Responsible Initiatives

Our plan embraces mutually reinforcing values of commercial success and empowerment including

initiatives such as:

Training and development programmes initiated daily for Namibian employees in the management of

assets.

Much needed financial literacy undertakings for a wider Namibian audience

EMHPrescient will contribute financially, and participate perennially in socially responsible initiatives within

the Namibian environment. Initiatives focus on organisations whose objectives impact the well-being of all

Namibians.

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EMHPRESCIENT UNIT TRUST LIMITED

In April 2012, EMHPrescient Unit Trust Limited was awarded its trading license from NAMFISA to provide a

pooled solution to our segregated clients and the retail market at large.

The management company business is responsible for aspects of management, accounting, administration,

client communication and compliance for the various collective investment portfolios (mutual funds)

established under the registered scheme.

EMHPrescient’s first two unit trust funds, namely; the EMHPrescient Income Provider Fund and

EMHPrescient Absolute Balanced Fund, were launched on 20 July 2012. These Funds started off with an

initial size of N$4 350 000.00 and N$9 550 000.00 respectively. During February 2013 the business

launched the EMHPrescient Money Market Fund with an initial size of N$2 050 000.00. These three funds

are compliant with Regulation 28 of the Pension Funds Act.

A new fund, the EMHPrescient Diversified Income Provider Fund was launched in April 2014, with an initial

size of N$50 000 000.00 to provide an alternative to non-pension regulated investors.

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CONTACT INFORMATION:

For more information, please contact:

Melanie Allen – Chief Executive Officer

Dr Leake S. Hangala – Business Development

Herman Steyn – Director

Meyer Coetzee - Director

[email protected]

[email protected]

[email protected]

[email protected]

18 Lilliencron Street

The Village

Units 16-17

P O Box 23612

Windhoek, Namibia

Tel: +264-61-402 092

Fax: +264-61-401 111

Email: [email protected]

Website: www.emhprescient.com

Registered Financial Services Provider (NAMFISA 25/12/80)