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Founder Member and Associate of FINSOLNET

WE THANK YOU FOR YOUR SUPPORT OVER MANY YEARS

-----ooOoo-----

PLEASE NOTE THAT OUR OFFICE WILL BE CLOSED FROM

13 DECEMBER 2019 AND RE-OPENS ON 6 JANUARY 2020

MAY YOUR FESTIVE SEASON BE FILLED WITH LOVE

LAUGHTER AND JOY AND MAY THE NEW YEAR BRING

YOU AND YOUR LOVED ONES HAPPINESS

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1.1 Old Mutual Wealth offshore equity portfolio available on the Sygnia platform 1.2 Sygnia’s new Oxford Sciences Innovation Fund investment 1.3 RSA Brokers model portfolios

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2.1 South Africa 2.2 World economy

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3.1 Education system 3.2 Taxpayers in South Africa 3.3 South Africa balance of payment 3.4 Malfunction of State institutions 3.5 Threats on the horizon

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5.1 Old Mutual offshore equity portfolio 5.2 Calculation of master fees in Estates 5.3 Replacements of Wills with Heyns and Partners 5.4 Sygnia general conference: 7-8 November 2019 5.5 Switchboard

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6.1 Retirement annuities 6.2 70-Plus Project: Joint financial planning for clients older than 70

in co-operation with their children and/or family

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7.1 Travel programme 7.2 Location of office venues

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1.1 Old Mutual Wealth offshore equity portfolio available on the Sygnia platform

We are pleased to confirm that Old Mutual Wealth's direct offshore equity portfolio will in future also be available in the form of a “asset swap” transaction for compulsory and discretionary capital invested offshore (refer to Annexure A) where full fund fact sheets can be viewed. This strategy will be combined with the existing four offshore funds that we are currently using, namely Investec Global Franchise Feeder Fund, Coronation Global Opportunities Equity Feeder Fund, Sygnia Skeleton International Equity Fund of Funds and Sygnia's 4th Industrial Revolution Global Equity Fund.

1.2 New offshore investment with Sygnia: Oxford Sciences Innovation Fund

Sygnia was fortunate to be able to buy a share in this strategy. The advantage of being able to invest in this portfolio is that many years of research has been done by the University of Oxford on new forms of innovations. If the research is positive, the investment will be added to their portfolio range. A fund fact sheet regarding the portfolio is attached hereby as Annexure B.

1.3 RSA Brokers strategies with Sygnia (Model portfolio)

Due to the large amount of capital, we have already (since June 2019) switched to our new investment strategies. Sygnia has suggested that they would make our individual strategies available in the form of a model portfolios (refer to point 4 for more information).

2.1 South Africa

As confirmed in our June 2019 newsletter, everyone was very excited and hopeful about the possible improvements that could be made in government, if the ANC were to win the election by a healthy majority. The victory was achieved, but the composition of the Parliament leaves much to be desired. Clearly, there is no urgency to make the necessary adjustments to senior management and therefore the economy is unlikely to improve positively. The credit agency “Standard & Poor” has already rated us from stable to negative. Moody's changed our rating to negative and "Fitch" ratings changed their rating to negative in July 2019.

SAA

It remains incomprehensible that the employees of a bankrupt company can demand salary increases and bonuses. Hopefully the whole matter will now be driven to a point where SAA will be partially and/or fully sold to a preferred offshore investor. We trust that Solidarity's application to place SAA in business rescue will be allowed by the courts. Except for qualified management, they will have to dispose of excess staff, cancel unauthorised contracts, to result in generous tax savings.

Eskom, Denel and others

The poor state of affairs of the above institutions, continues and sporadic load shedding seems to be part of our future, with a negative impact on the economy.

2.2 Offshore economy

United States

The US market is still performing well and Trump’s simple policy of putting America first is paying dividends.

Britain

Britain is still struggling with the Brexit problem. The next election they are about to hold, will hopefully help solve this problem, for the benefit of Britain and the world economy. There are still sectors in the UK economy that are doing well, despite the Brexit problem.

China

The trade war with the US continues and contributes to international market uncertainty. International portfolio managers refer to this as “noise” and say that three to five years later, it will be scrutinised with no significant consequences.

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With reference to our June 2019 newsletter, we were all very hopeful that after the June 2019 general election and the ANC's expected victory that President Cyril Ramaphosa would attempt to get rid of the old criminals. This would have had great growth potential for the South African economy. Unfortunately, nothing came of it. After the new cabinet was announced, the stock exchange lost almost all the profits achieved from January to mid-May 2019, and there is enormous uncertainty about the future of the stock exchange. The growth prospects for South Africa for 2020 are only approximately 0.5% for the year!!

In June 2019, Sygnia organised a very important conference. We were addressed by a well-known researcher and economist, who analysed four possible future outcomes for the South African economy. Unfortunately, none of these possibilities work. This extremely disturbing situation is briefly related to the following points:

3.1 Education system

The primary problem with the economy is the education system that totally fails us. It is shocking to see how few children who start in the system, master matric. Furthermore, it is worrying that at least 50% of all students who obtained a degree, emigrate. Therefore, we are losing the assumed current expertise, who should take the country forward. Quality educators also leave much to be desired.

3.2 Taxpayers in South Africa

There are about 5 million people in South Africa who pay income tax. One million (about 20%) of these taxpayers pay 80% of all the tax collected in South Africa. There are approximately 60 million people in South Africa and this number is increasing daily, as no border control is applied. It is mathematically impossible that the tax paid by 1 million people can meet 60-million people's needs and expectations.

3.3 South Africa balance of payment

This horrifying situation is reflected in the country's balance of payments in terms of which almost 70% of all tax collected are spent on paying state officials salaries and government debt. Twenty-nine-thousand state officials earn over R1-million a year!

3.4 Malfunctioning of State institutions

Government agencies, such as Eskom, SAA, SABC, Denel and almost all Municipalities are already bankrupt.

3.5 Threats on the horizon

(a) Prescribed investments for pension funds are seriously being debated by the State. In terms of this, the State will decide where to invest the capital of pension funds, provident funds, preservation funds and retirement annuities. Government institutions that are bankrupt, will receive preference with the associated hopeless or no return for the funds.

(b) We are now proverbially hanging on the last downgrading umbilical cord and Moody's may downgrade us to junk status in March 2020. Downgrading will certainly affect the exchange rate and the Rand should depreciate against other foreign currencies. In Government bonds alone, R200-billion of offshore pension fund capital has been invested, which will have to leave the country as a result of downgrading. No one knows where the State will get this capital.

(c) The possible withdrawal of offshore investors’ capital, who currently hold 46% of the shares in our stock exchange, also poses a very great danger.

(d) The looming national health policy being discussed is a disaster waiting to happen.

(e) Ridiculously political inspired findings in certain court cases and especially in the human rights commission, leave big questions about the integrity of the people, who make the decisions.

Based on the above information, we have changed our investment strategy to such an extent that we suggest to clients to keep only enough capital in South Africa from which they need an income and for unforeseen expenses. These investments should not be linked to the JSE.

The balance of the available capital should preferably be invested offshore to hedge against the declining value of the Rand and simply to invest in larger and better companies. In this regard, we also refer to our June 2019 newsletter that expanded on this. The strategy will be applied as follows:-

• Compulsory capital

Where capital is invested in retirement annuities, pension funds, provident funds and pension preservation funds, Section 28 of the Income Tax Act must be applied. It states that only 30% of the capital may be invested offshore. The balance must be invested in the South African stock exchange.

We therefore apply the offshore capital by utilising the above foreign funds (refer to 1.1) and the local capital is simply divide between the Marriott Core Income Fund and Sygnia's Enhanced Income Fund. Both portfolios do not have underlying shares and the returns are in excess of 9% per annum. (Annexure C)

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Fortunately, living annuities are not subject to the provisions of Article 28. One hundred percent (100%) of the capital can be invested in offshore funds. However, we still prefer to invest the capital for the selected income, in terms of a specific formula, between the Marriott Core Income Fund and Sygnia's Enhanced Income Fund. The balance of the capital, which is shown as the growing capital, is invested offshore.

• Discretionary capital (own capital):

Where discretionary capital is available and a term of longer than five years are planned before the capital will be required, our offshore portfolios will be considered very strongly. Where discretionary capital is used for income, we will apply the same formula for income, as we apply to determine income in living annuities. The capital is also divided accordingly between the said local funds and offshore funds. However, before switching existing discretionary capital, we must investigate the effect of capital gains tax and the necessary calculations will be done in this regard. In many cases, we can also make use of an increased contribution to a retirement annuity for the particular year in which capital gains tax is realised. This will reduce the tax impact.

As a rule, in 5-year policy structures where capital is applied for growth, we suggest offshore funds. In 5-year structures, capital gains tax is calculated and paid at 12% internally. Applied capital gains tax is calculated in terms of the following formula:

❖ The profit is determined and the first R40,000 per taxpayer, per annum, is a capital gains tax rebate. Forty percent (40%) of the balance of the profit is taken and this amount is subject to tax. Income tax on capital gains are calculated at 18%. We use the taxable amount to calculate the possible contribution to a retirement annuity.

Due to the amount of capital that we have already switched for our clients in terms of the above investment strategy, Sygnia has suggested that they incorporate our strategies into automated model portfolios. Model portfolios are prepared for the following investments:

• Living annuities;

• Retirement annuities / pension funds / provident funds / pension preservation funds;

• For income from discretionary capital; and

• For capital investments used in 5-year structures in offshore funds.

The process ensued is as follows:

• Our investment strategy is formulated thoroughly;

• The strategy is applied according to the individual circumstances of the client;

• Regular rebalancing of strategies, especially where income is withdrawn, is done automatically on an annual basis; and

• Possible changes to the underlying investments are discussed and finalised during quarterly meetings with Sygnia and their research team. Clients will be informed of any changes.

The advantage of the above structure is essentially that:

• Any market changes can be reacted to very quickly, with the associated protection of capital;

• An expert team of researchers are utilised;

• The group can again negotiate management fees that leads to cost savings; and

• The total additional cost per client is only 0.10% per annum of investment capital. A letter discussing the process is attached as Annexure D. The mandates will be send out with the next quarterly reports. You are requested to return the mandates after approval and signing as soon as possible, and preferably before 25 Februarie 2020. You are by no means under any obligation to follow the above strategies and are welcome to stay in your existing portfolios. Should you have any questions regarding this matter please do not hesitate to contact us.

5.1 Old Mutual offshore equity portfolio

This portfolio is managed by Old Mutual in direct offshore equity companies. The advantage of this portfolio is that each client can see clearly in which offshore companies the capital is invested. Old Mutual also offers a brief motivation description for each company. The capital is only invested in established companies and the emphasis on these companies is based on a proven track record of good dividend payment. A good dividend record is a direct testimony to the financial success of each company.

5.2 Calculation of master fees in estates

We regularly receive inquiries from clients about the costs in estates. Here is a brief description of the calculation of master fees. Where an executor is appointed to an estate and the estate assets are larger than R250,000, master fees are payable. It is important to note that the total estate of persons married in community of property

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is subject to master's fees and the fees are therefore payable for the estate of both the dying and the surviving spouse. The master fee is determined on the following scale:-

An estate of R250,000 to R400,000 is R600.

For every R100,000 over R400,000 an additional R200 to a maximum of R7,000 is reached.

5.3 Replacement of Wills with Heyns and Partners

You would have concluded no doubt from correspondence between RSA Broker and Heyns & Partners, that RSA Brokers were unnecessarily involved in an internal dispute with the said firm.

o Heyns and Partners' allegations are considered in a very serious light and the necessary legal action has already been taken.

o On 10 September 2019, Heyns and Partners through their lawyers have undertaken, that they will not, under any circumstances, contact any of our clients via correspondence, electronically or telephonically.

o A case of defamation is being investigated. An amount for cost recovery is claimed for the time and effort involved in amending and renewing the Wills. In 99% of cases we simply appointed Theron Human & Associates as executors. The technical content of the Wills is not affected.

o We also insisted that Heyns & Partners should apologise in writing to every client to whom a letter was addressed. This however will not excuse them from the damage they have caused.

o Chris Theron is also involved in various cases against Heyns & Partners. He has already won his first case with costs against them.

o The extremely unflattering letter from Heyns & Partners was also addressed to several of our clients whose spouses have already passed away, as well as to one client of our associates and a variety of attorneys, who simply used Chris Theron's services to administer estates. All the other parties are already taking legal action against the firm. Once again, we apologise for you having become involved in this matter.

5.4 Sygnia general conference: 7-8 November 2019

At the conference, we were addressed by a very well-known economist, Dr Roelf Botha. In order to rescue the South African economy, his suggestion is to reduce interest rates to as low as 3%. They are currently conducting research that will show what the state of the economy might have been if the then low interest rate policy of the previous Finance Minister, Gil Marcus, would have been implemented. The report will be presented to the Government and the Reserve Bank. In addition, he emphasises the need for senior management of the State and the private sector to work together very closely in order to not only make the expertise and knowledge of the private sector available to the government, but also to improve their staff's knowledge and skills to the next higher level. Whether this will materialise, however, remains a major question.

5.5 Switchboard

From time to time, we experience problems with our automatic switchboard. The new system is connected to the fibre optic system and works through the internet. Please be patient when you call as there are a few seconds delay before the call is answered. Many clients are impatient and unhappy about the situation as they assume, they have been cut off. The same rule applies when a client contacts the administrative lady's extension directly and she is not available. There are also a few seconds delay before the voice message requires you to leave a message.

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6.1 Retirement annuities

Most of our clients' contributions to annuities for the 2020 tax year have already been finalized. We are in the process of contacting clients whose retirement annuity contributions have not yet been finalized. From the above capital gains tax information, you can conclude that in the case of capital gains tax, you can contribute to proven retirement annuities, to reduce tax.

6.2 70-Plus Project: Joint financial planning for clients older than 70 in co-operation with their children and/or family

We have had great success in discussing clients' financial situations with their children and/or next of kin and found the following:-

❖ Many of our clients do not have co-signing powers on their individual bank accounts and do not know each other's secret “pin” numbers. In general, we suggest that where possible, a child or children should also obtain signing powers on your bank account. It is also important that they know the necessary secret "pin" numbers. In the case of sudden illness, such as a stroke, it is important that the remaining members of the family have access to bank accounts for essential capital expenditure.

❖ We have again emphasised the importance of appointing beneficiaries to investments where possible, as this prevents executor fees and the payment process of the capital is thereby accelerated upon death.

❖ We have made numerous amendments to Wills that have not been revised recently.

❖ Many of our clients' children have also joined us as new clients. Of course, this facilitates the transfer of assets, upon joint and/or the survivor's death. Children's portfolios can also be adjusted for potential inheritance.

7.1 Travel programme:

Confirmation of our monthly travel programme: EASTERN CAPE:

George, Port Elizabeth and surroundings are visited during the 2nd week of every month. We visit East London annually.

BLOEMFONTEIN & KIMBERLEY

We visit Bloemfontein and Kimberly annually. JOHANNESBURG / POTCHEFSTROOM / PRETORIA:

These cities are visited monthly during the last week of the month.

CAPE TOWN AND SURROUNDINGS:

Clients are seen in these areas during the 1st and 3rd weeks of the month.

Should you require a meeting outside our normal scheduled visits to discuss specific matters, you are welcome to arrange an appointment with Maria de Jongh or Colleen Knoetze. Please note that if your financial circumstances have altered to such an extent that it requires revision, it is important that you provide us with detailed information for us to prepare a revised analysis.

Should you have a problem meeting us at our office, kindly confirm this with Maria or Colleen for them to make alternative arrangements to see you at your private home.

7.2 Location of office venues:

JOHANNESBURG: Regus

Block A Wedgefield Office Park 17 Muswellway South Bryanston

POTCHEFSTROOM: 81 Rocher Street

Baillie Park Potchefstroom

PRETORIA: Regus Spaces

1 Pegasus Building 210 Amarand Avenue Menlyn Maine Pretoria

GEORGE: Office Reliance

123 Mitchell Street George

PORT ELIZABETH: Regus House

Fairview Office Park Ring Street Greenacres Port Elizabeth

EAST LONDON: Regus

Ground Floor 14 Stewart Avenue Berea East London

BLOEMFONTEIN: Unipark Building

Nobel Street Brandwag Bloemfontein

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TAX CONSULTANTS

PAM COETZEE

P. O. Box 136 Botriver 7185

Tel: 028-284 9001 Fax: 0866 460 000 Email : pam@rsabrokers.co.za

RONEL RAUBACH

81 Rocher Street Baillie Park Potchefstroom 2531

Tel: 018-294 6971 Fax: Email: raubachr@webmail.co.za

AC VENTER

3 Leipold Street De La Haye Bellville 7530

Tel: 021-9451 008 Fax: Email: admin@acventer.co.za

STAFF E-MAIL EXTENSION FAX-2-EMAIL

Peter-John Smitsdorff peterjon@rsabrokers.co.za Derick Payne derick@rsabrokers.co.za Japie Louw japie@rsabrokers.co.za

Maria de Jongh (Personal Assistant) maria@rsabrokers.co.za 101 086 615 1808 Colleen Knoetze (Personal Assistant) colleen@rsabrokers.co.za 118 086 610 2734 Magda Matthee (Financial Analysis) magda@rsabrokers.co.za 111 086 615 1811 Thea Horak (Reception/Dictation) reception@rsabrokers.co.za 100 086 610 2734

Administrative Assistants / Client Services: Eileen v/d Westhuizen (A-B-D) eileen@rsabrokers.co.za 115 086 575 7534 Bernice van Zyl (C-E-F-G-H-I) bernice@rsabrokers.co.za 119 086 769 2119 Andrea Fourie (J-K-L-M) andrea@rsabrokers.co.za 109 086 550 1478 Heidi Fontini (N-O-P-Q-R-S) heidi@rsabrokers.co.za 107 086 575 7546 Linda Marais (T-U-V-W-X-Y-Z) linda@rsabrokers.co.za 110 086 615 1810 Lorraine Balie (All Derick Payne’s Clients) lorraine@rsabrokers.co.za 113 086 595 0180

Insurance House

Edward Street 126

BELLVILLE 7530 GPS: S 33º52.707’ 18º38.171’

FSB KODE:

11108

P.O. Box 3547

TYGERVALLEY 7536

Tel: 021- 919 6916

Fax: 021- 919 9718 WhatsApp & SMS number: 064-704-8071

Unfortunately, Denise van Zyl retires on 13 December 2019

which we really regret. Her spouse has already retired and it

is very clear that she misses the free time he enjoys and

cannot share with him. Denise has built a wonderful

relationship with her clients, who clearly will miss her. Mrs.

Lorraine Balie will be appointed from January 2020. She comes

from Liberty Life and has many years of experience in the

investment industry. We know she will be able to share her

expertise and skills with our clients and welcome her in

advance. She will take over Eileen van der Westhuizen’s

portfolio and Eileen will take Denise’s portfolio.

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FRONT: From left to right Japie Louw; Maria de Jongh; Peter-John Smitsdorff; Colleen Knoetze

BACK: From left to right Bernice van Zyl; Denise van Zyl; Eileen van der Westhuizen; Andrea Fourie;

Thea Horak; Heidi Fontini; Linda Marais; Magda Matthee

DERICK PAYNE PAM COETZEE

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WEALTH PRIVATE CLIENT SECURITIES

ANNEXURE A1

OLD MUTUAL WEALTH PCS

GLOBAL EQUITY PORTFOLIO

SEPTEMBER 2019 A private client portfolio of direct investments and not a collective investment scheme.

INCEPTION DATE: 1 July 2014

BENCHMARK: MSCI World Index

PORTFOLIO Andrew Dittberner & Chris Potgieter MANAGER(S):

RISK PROFILE AND ADVISABLE MINIMUM TERM

Moderate Maximum Conservative Moderate Aggressive Aggressive Return

X

2-3 Years 3-5 Years 5-7 Years 7-10 Years 10+ Years

X DESCRIPTION The Old Mutual Wealth PCS Global Equity Portfolio is a diversified portfolio (not

a fund) invested in large cap, high-quality global companies with the objective

to outperform the MSCI World Index in US dollar terms (after management fees)

over a time horizon of 3 years. Our aim is to generate sustainable excess returns versus global market indices

by primarily investing your portfolio in 15-20 companies listed on the exchanges

of developed markets that can be described as world leaders in their respective

global sectors.

ANNUALISED PERFORMANCE to 30 September 2019

1 3 5 Since

year years years 7 years inception

Portfolio (ZAR) 15.2% 14.0% 13.9% - 13.6%

MSCI World Index (ZAR) 9.7% 14.5% 14.3% 20.3% 14.4%

Portfolio (USD) 7.6% 10.4% 7.4% - 6.2%

MSCI World Index (USD) 2.4% 10.8% 7.8% 10.3% 7.0%

MSCI World Index over the long term

1 000 MSCI World Index (USD)

800

600

400

200

0

Sep 89 Sep 94 Sep 99 Sep 04 Sep 09 Sep 14 Sep 19

Source: Morningstar as at 30/09/2019 10-Year rolling returns

REGULATION 28 COMPLIANCE This portfolio may hold a higher allocation to equities than what is allowed in

terms of Regulation 28 of the Pension Funds Act. This portfolio is therefore not

Regulation 28 compliant.

PORTFOLIO FEES: Minimum investment: US$50 000

Please contact Private Client Securities for

14% 12% 10% 8% 6% 4% 2% 0%

MSCI World Index (USD)

a detailed breakdown of fees. TOP 5 HOLDINGS % of Holding Sector Portfolio

Visa Inc. Information Technology 7.1%

Microsoft Corp. Information Technology 5.9%

Nestle SA Consumer Goods 5.1%

S&P Global Inc. Financials 5.0%

iShares MSCI Japan Index Fund Financials 5.0%

-2%

-4%

Sep 09 Sep 11 Sep 13 Sep 15 Sep 17 Sep 19 Source: Morningstar as at 30/09/2019

Asset class holdings

60%

49.4%

50%

40%

30% 24.5%

20%

10% 4.7%

8.9% 8.0%

4.6%

0% 0.0%

Cash Consumer Healthcare Industrials Resources Technology Financials

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ANNEXURE A2

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ANNEXURE B

Sygnia Oxford Sciences Innovation Fund

The Sygnia Oxford Sciences Innovation Fund

invests in shares of Oxford Sciences Innovation

Plc – a platform company partnered with the University of Oxford to convert its patents and

research ideas into commercial enterprises – and

in select spin-out companies that have achieved

scale and success.

Risk profile

Low Low to medium Medium Medium to High High

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Fund overview The Sygnia Oxford Sciences Innovation Fund invests in the shares of Oxford Sciences

Innovation Plc (OSI) – a platform company partnered with the University of Oxford to

convert its patents and research ideas into commercial enterprises – and directly in select

spin-out companies that are already in an advanced stage of growth and success. The

Fund follows an impact investing strategy, prioritising investments in companies which,

through technology-driven innovation, are revolutionising the provision of healthcare and

reducing the impact of climate change. The University of Oxford was rated the number one research university in the world in the 2019

Times Higher Education World University Rankings for a third year in a row, endorsing the

world-leading science at the heart of OSI. The university employs over 12 000 full-time researchers, with an annual budget of approximately £450 million for academic

research. Its Medical Science Division has been rated number one in the world for Clinical, Pre-

Clinical and Health subjects for the past eight years according to those same 2019 rankings, while

its Mathematical, Physical and Life Sciences Division was previously ranked first in the United

Kingdom in the Research Excellence Framework. OSI was set up in June 2015, raising £600 million in capital from leading global asset

management firms by striking a unique deal with the University, in which OSI and the

University share an equal and automatic stake in all qualifying spin-out investment

companies originating from patents registered by the University. OSI is automatically

entitled to 50% of the shares issued to the University by the companies concerned for nil

payment; this arrangement translates into an effective ownership of 50% of the

University’s stake in all past and future patents registered by the University, which are

registered by academics and researchers at the University on an ongoing basis. OSI and

its management team, in turn, are tasked with identifying and selecting the investment

opportunities most likely to achieve commercial success while having a positive impact

on humanity. OSI thus deploys the capital it has raised to commercialise specific

investment opportunities that it identifies as having potential exponential future value in

fields such as genomics, AI, fintech, quantum computing and others. OSI acts as the

seed investor and takes an active interest in the growth and development of its investment

opportunities. So far, 73 companies have been spun out of the University via OSI, and

OSI maintains a significant equity stake in all the spin-out companies. Four years down

the line, the market capitalisation of OSI has risen to £708 million as at 30 June 2019,

with over £438 million still available in cash for future investments. An investment in OSI and its spin-out companies translates into an investment in leading-edge

innovation in the fields where technology and biosciences meet, with all research ideas validated by

years of rigorous academic research and proof-of-concept trials. The investment is a once-in-a-

lifetime opportunity to own a significant portion of IP originating from the world’s leading research

university, the University of Oxford, and to own such IP in perpetuity. The potential value generation,

now and in the future, is exponential.

Investment fund The Sygnia Oxford Sciences Innovation Fund offers investors exclusive exposure to a diversified

portfolio of 73 companies spun out of OSI in the past four years, as well as more concentrated

exposure to the most successful spin-outs. OSI expects to grow its portfolio of investee

companies by 10 per annum. A number of those companies are expected to reach multi-million

UK pound valuations within the next three to five years.

Risk profile The Fund has a high risk profile, as it invests in OSI, which in turn invests in unlisted

companies involved in new and emerging technologies with the potential to

exponentially change the world for the better, as well as directly in some spin-out

companies. As the Fund is an offshore fund, the investments are exposed to general

market risk, exchange rate risk, liquidity risk and legal and regulatory risks.

Why invest in

Sygnia Oxford Sciences Innovation Fund?

Impact investments strategy

Rising global inequality has increased the need

for affordable access to healthcare, education,

inclusive finance and housing. Climate change

has been identified as the major threat facing

humanity, driving the need for renewable and

alternative energy sources, energy efficiency

and sustainable agriculture and forestry. At the

same time, technological advancements are

making the unachievable achievable, providing

solutions at an exponential pace and low cost.

Investment opportunities such as OSI are

hence likely to deliver exceptional returns over

the longer term.

Exclusive access Direct exposure to OSI has been restricted to

leading global asset management firms, as OSI

effectively owns 25% of all patents originating

from the University of Oxford in perpetuity. The

shares do not trade in the open market and are

difficult to access directly. The most successful

spin-out companies, in turn, screen and choose

their investors carefully.

Full liquidity Although the underlying investments are

unlisted and thus lack liquidity, Sygnia Life

guarantees full liquidity to any investor who

wishes to disinvest at any stage. The product

is an endowment policy offered by Sygnia Life,

but the investment can be structured in such a

way as to enable regular withdrawals of capital.

Offshore exposure Investors do not need to use their own

offshore investment allowance, as the

investment falls under the offshore

allowance of Sygnia Life.

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Notable OSI investments

Osler Osler has created a portable diagnostic device that enables anyone to test for most biomarkers from a drop of blood. Spun out: 2016 Department: Chemistry

Fundraise status: £30 million Series A Website: oslerdiagnostics.com

Ultromics Coronary artery disease is the biggest killer globally, affecting 50% of males over 40. The most widely used diagnostic tools are

echocardiography (ultrasound) and qualitative clinical interpretation. Evidence suggests that at least 20% of coronary artery disease scans

are misdiagnosed, but Ultromics EchoGo’s technology reduces that error rate by >50%. Spun out: July 2017 Department: Medicine

Fundraise status: £13 million Series A Website: ultromics.com

Evox Therapeutics Evox Therapeutics is harnessing the natural delivery capabilities of extracellular vesicles (foundational transporters in the human body) to

develop an entirely novel class of biotherapeutics with which to treat serious diseases. Evox modifies exosomes to facilitate targeted drug

delivery to organs of interest, not least to the brain and the central nervous system. Spun out: July 2017 Department: Physiology

Fundraise status: $60 million Series A&B Website: evoxtherapeutics.com

Who should invest? The Fund is suitable for investors who seek exponential returns while having a positive impact on humanity through the fields of biosciences,

healthcare and renewable energy provision. As the Fund is exposed to unlisted investments, it has a higher risk profile than a general

equity fund. The returns are likely to come at discrete intervals as the most successful spin-out companies reach high valuations. Some

companies within the OSI portfolio may fail to achieve commercial success. How to invest The fund can be accessed through the Sygnia Retirement Annuity, Sygnia Preservation Fund, Sygnia Endowment Policy and the Sygnia

Living Annuity.

Fees Benchmark: 6% per annum

Management fees: 1.80% per annum (including VAT if applicable)

Performance fee: 20% subject to the achievement of the benchmark

Minimum investment: R5 000

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Marriot Core Income Fund ANNEXURE C1

30 September 2019

Performance

Net of all fees and expenses as per the TER disclosure (including income) Volatility of Return

Since Inception

Annualised (pa) 1 year 2 years 3 years 4 years 5 years Since Inception Highest Lowest

(Feb 2001) 12 Months 12 Months

Income Return 9.5% 8.9% 8.8% 8.6% 8.6% 9.7% - -

Price Return 0.4% 0.2% -0.1% -0.2% -0.7% 0.6% - -

Total Return 9.9% 9.1% 8.7% 8.4% 7.9% 10.3% 35.6% 0.9%

Source: Marriott For periods longer than 12 months annualised performance figures are used. An annualised performance figure represents the compounded average return

in percentage terms earned by the fund over the given period of time.

Commentary For the year ending 30 September 2019, the Core Income Fund produced a total return of approximately 10%. This was above our expectations of

8% and ahead of both the money market and the multi-asset income sector average returns. This good outcome was achieved through an

approximate 45% exposure to longer dated fixed term instruments and an increased exposure to high quality floating corporate debt. The table

below indicates the current positioning, yield and investment term of the portfolio.

Marriott Core Income Fund - Current Position (30 September 2019)

Instrument Weight Gross Yield (%) Term (years)

Cash and Short Term Fixed Deposits 16.5% 6.8% 0.2

Long Term Fixed Deposits, Corporate and Government Debt 44.6% 9.0% 3.8

Preference Shares 4.1% 9.7% +5

Floating Corporate Debt 32.9% 8.4% 4.6

Real Estate Investment Trusts 1.9% 9.2% +5

Total* 100.0% 8.5% 3.6

*Gross yield and term (years) are weighted Source: Marriott

The third quarter of 2019 was characterised by continued market volatility and further declines in global bond yields. Negative interest rates in Japan and the Eurozone, and mounting expectations that the US Federal Reserve will cut interest rates several more times in the months ahead, have expanded the pool of bonds with sub-zero yields to more than $15 trillion – or around 25% of the global bond market. In Germany, yields are negative all the way from cash deposits to 30 year bonds. In Switzerland, negative yields extend all the way out to 50 year bonds. Unsurprisingly, this backdrop has resulted in further declines in the yields (rising prices) of medium term fixed interest bonds and bank deposits as highlighted below: Looking ahead, the risk of a ratings downgrade by Moody’s remains high as GDP growth is likely to disappoint relative to budget expectations, whilst

the funding requirements of SOEs have increased. As such, we remain cautious of long dated fixed interest bonds due to the capital sensitive nature

of the fund’s investors. Should a downgrade occur fixed-interest bond yields could rise due to forced selling by passive funds as a result of our

exclusion from important investment grade bond indices. The fund is well positioned for this with a low modified duration (interest rate price sensitivity)

and a reasonably high short dated cash balance to take advantage of opportunities that may present themselves

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SYGNIA ENHANCBYLAAED B SYGNIA ENHANCED INCOME FUND

ANNEXURE C2 RISK PROFILE

LOW LOW

MEDIUM MEDIUM

HIGH

MEDIUM HIGH

LESS RISK/ MORE RISK/ RETURN RETURN

CLASS A SOUTH AFRICA - MULTI-ASSET - INCOME

TIME HORIZON

31 OCTOBER 2019

0 - 2 YEARS

INVESTMENT OBJECTIVE THE FUND AIMS TO MAXIMISE INTEREST INCOME, PRESERVE CAPITAL AND PROVIDE IMMEDIATE LIQUIDITY

INCOME DISTRIBUTION MONTHLY PAYMENT: 1 OCT 2019 - 0.55 CENTS PER UNIT PAYMENT: 1 SEP 2019 - 0.56 CENTS PER UNIT

TRUSTEES STANDARD BANK TRUSTEES (021 441 4100)

CUMULATIVE FORMANCE Growth of R100 invested on 31 January 2019

Investment: R107.33

Benchmark: R105.42

R108 R107

R106

R105

R104

R103

R102

R101

R100

R99

Feb 19 Apr 19 Jun 19 Aug 19 Oct 19

Sygnia Enhanced Income Fund STeFI Index

ASSET ALLOCATION

ASSET PERCENT ALLOCATION

Domestic Bonds 80.8%

Domestic Money Market 16.5%

Domestic Property 2.7%

PERFORMANCE ANALYSIS PERIODIC PERFORMANCE FUND *BM DIFFERENCE

1 Month 0.8% 0.6% 0.2%

3 Months 2.2% 1.8% 0.4%

6 Months 4.5% 3.6% 0.9%

Since Inception 7.3% 5.4% 1.9% Current Yield 8.8% Performance as calculated by Sygnia Asset Management as at 31 October 2019 *STeFI Index

MANAGER ALLOCATION

MANAGER PERCENTAGE

Taquanta 39.9%

Sygnia Asset Management 28.1%

Momentum 19.1%

Nedgroup Investments 7.7%

Ashburton Investments 4.8%

Cash 0.4%

HISTORICAL PERFORMANCE

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YEAR

2019 0.8% 0.9% 1.0% 0.8% 0.7% 0.8% 0.6% 0.7% 0.8% 7.3% RISK STATISTICS

FUND BENCHMARK

% Negative Months 0.0% 0.0%

Avg Negative Return 0.0% 0.0%

Maximum Drawdown 0.0% 0.0%

Standard Deviation 0.4% 0.1%

Downside Deviation 0.0% 0.0%

Highest Annual Return 0.0% 0.0%

Lowest Annual Return 0.0% 0.0%

FEES Initial Fees: N/A

Management Fees: 0.65% per annum (excluding VAT)

Performance Fees: N/A

Total Expense Ratio (TER): 0.69% (September 2019)

Transaction Costs (TC): 0.00% (September 2019)

Total Investment Charge (TIC): 0.69% (September 2019)

No initial or advice fees are applicable.

PORTFOLIO MANAGERS TONIA PAVLOU*, MONIQUE DAVIDSON*

REGULATION 28 COMPLIANT FUND LAUNCH DATE 27 DECEMBER 2018 CLASS LAUNCH DATE 10 JANUARY 2019 FUND SIZE R 2 963.86 MILLION UNIT PRICE 101.85 UNITS IN ISSUE 449 887 264 *under supervision

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ANNEXURE D

Model Portfolio Proposal

For RSA Brokers

December 2019

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Introduction

RSA Brokers is currently implementing a long-term strategy for non-discretionary investments, based on the

individual level of income required. The various solutions involve an Income Portfolio, which is comprised of

exposure to SA Income Portfolios, and a Global Portfolio, comprised of exposure to five different international equity

unit trusts. These strategies are currently run on a bespoke arrangement by RSA Brokers for individual clients,

requiring intensive amounts of administrative work with regards to switching and rebalancing. Sygnia would propose

that RSA Brokers considers the use of Sygnia Model Portfolios to manage these strategies, which would minimise

the amount of administrative work required by RSA Brokers, assist with ongoing rebalancing and optimise the

interactions with individual clients. Phase II of this approach would involve the creation of a bespoke unit trust for

RSA Brokers to effectively house the Global Portfolio, which would then be a simple vehicle available for

discretionary assets to access.

Sygnia Model Portfolios

Investment management has developed into a complex industry with a broad range of options for investors, which

makes implementing bespoke financial advice particularly onerous for financial advisers. RSA Brokers has

implemented optimal solutions for their clients, however, this has potentially lead to a large number of individual

portfolios, each of which has their unique cashflow and rebalancing challenges. Sygnia Model Portfolios take away

this administrative and rebalancing burden, and will allow RSA Brokers to focus on the areas that they can best

assist their clients to achieve their financial goals. Sygnia Model Portfolios will also allow RSA Brokers to better

leverage off the expertise of the Sygnia investment team, enabling them to focus on offering clients a customised

service which is implemented in the most efficient manner possible. Finally, Sygnia Model Portfolios will also allow

RSA Brokers to quickly and efficiently implement changes to portfolios across their entire client range, as the

investment landscape and economic outlook in South Africa evolves into the future.

Key Benefits of Sygnia Model Portfolios

• Leverage the expertise of a team of experienced and dedicated investment specialists;

• Access to an established and proven investment process within a top-performing multi-manager;

• Easier portfolio rebalancing, as it occurs in one model portfolio rather than across a myriad of client

portfolios;

• Cost-effective portfolio construction;

• Flexibility for RSA Brokers to include specific funds and asset classes;

• Streamlined administration; and

• RSA Brokers retains full control and responsibility for the client relationship.

SYGNIA ASSET MANAGEMENT (PTY) LTD Registration No. 2003/009329/07 CAPE TOWN: 7th Floor I The Foundry I Cardiff Street I Green Point I 8001 I T +27 21 446 4940 I F + 27 21 446 4950 JOHANNESBURG: Unit 40 | 6th Floor | Katherine & West Building | West Street | Sandton | 2196 | Tel: +27 10 595 0550 | Fax: +27 86 206 5173

DURBAN: Office 2 | 2nd Floor Ridgeview | 1 Nokwe Avenue | Ridgeside | Umhlanga Ridge | 4319 | Tel: +27 31 001 0650 | Fax: +27 86 206 4421 2

info@sygnia.co.za I www.sygnia.co.za Sygnia Asset Management (Pty) Ltd is a licensed Financial Services Provider (FSP 873)

19| P a g e

Model Portfolio Proposal: Conservative, Moderate, and Growth

The current strategies employed by RSA Brokers for their non-discretionary clients are based on individual income targets,

and are constructed around two distinct investment strategies: an Income Portfolio and a Global Portfolio.

Income Portfolio Allocation

Marriot Core Income Fund 50%

Sygnia Enhanced Income Fund 50%

Total 100%

For clients with more than R4m income exposure, RSA Brokers has introduced the Prescient Income Provider Fund and

the Fairtree Flexible Income Plus Fund as additional diversifiers. We would recommend that there is no need for the two

additional funds, given the diversified nature of the Sygnia Enhanced Income Fund, which is multi-managed fund and

effectively already diversified across four managers (Sygnia, Taquanta, Ashburton and Aluwani).

The following is the composition of the Global Portfolio, and can be adjusted if required in consultation between RSA

Brokers and Sygnia.

Global Portfolio Allocation

Coronation Global Opportunity Feeder Fund 25%

Investec Global Franchise Feeder Fund 25%

Sygnia 4th Industrial Revolution Global Equity Fund 25%

Sygnia Skeleton International Equity Fund of Funds 25%

Total 100%

The income targets of clients are classified into three buckets: Conservative (7% income target); Moderate (5% income

target); and Growth (2.5% income target). Depending on the income target, the Model Portfolios will have the following

various exposures to the Income Portfolio and the Global Portfolio:

Income Portfolio Global Portfolio

Conservative Portfolio (7% income target) 100% 0%

Moderate Portfolio (5% income target) 70% 30%

Growth Portfolio (2.5% income target) 35% 65%

In the above format, the Growth Portfolio is non-Reg28 compliant. As such we have made a Reg28 compliant version

of the Growth Portfolio, with a maximum offshore limit of 29%.

SYGNIA ASSET MANAGEMENT (PTY) LTD Registration No. 2003/009329/07 CAPE TOWN: 7th Floor I The Foundry I Cardiff Street I Green Point I 8001 I T +27 21 446 4940 I F + 27 21 446 4950 JOHANNESBURG: Unit 40 | 6th Floor | Katherine & West Building | West Street | Sandton | 2196 | Tel: +27 10 595 0550 | Fax: +27 86 206 5173

DURBAN: Office 2 | 2nd Floor Ridgeview | 1 Nokwe Avenue | Ridgeside | Umhlanga Ridge | 4319 | Tel: +27 31 001 0650 | Fax: +27 86 206 4421 3

info@sygnia.co.za I www.sygnia.co.za Sygnia Asset Management (Pty) Ltd is a licensed Financial Services Provider (FSP 873)

20| P a g e

Based on the above allocations, the following are the proposed RSA Brokers Model Portfolios, plus the Reg28

Compliant Growth Portfolio:

RSA Brokers RSA Brokers RSA Brokers

RSA Brokers RSA Brokers

Reg 28 Conservative Moderate Growth Global

Growth Portfolio Portfolio Portfolio Portfolio

Portfolio

Income Target 7% 5% 2.5%

Marriot Core Income Fund 50.0% 35.0% 17.4% 17.4% 0%

Sygnia Enhanced Income 50.0% 35.0% 17.4% 17.4% 0%

Fund

Coronation SA Equity Fund 0.0% 0.0% 0.0% 18.0% 0.0%

Investec SA Equity Fund 0.0% 0.0% 0.0% 18.0% 0.0%

Coronation Global 0.0% 7.5% 16.3% 7.3% 25.0%

Opportunity Fund

Investec Global Franchise 0.0% 7.5% 16.3% 7.3% 25.0%

Feed Fund

Sygnia 4th IR Global Equity 0.0% 7.5% 16.3% 7.3% 25.0%

Fund

Sygnia Skeleton Int’l Equity 0.0% 7.5% 16.3% 7.3% 25.0%

FoF

Total 100.0% 100.0% 100.0% 100.0% 100.0%

RSA Brokers Model Portfolios - Costs

Sygnia will charge RSA Brokers’ clients a fee of 0.10% (10bps) ex-VAT on all assets invested in the model

portfolios. For this fee, RSA Brokers’ clients will receive:

• Co-branded fund fact sheets

• Co-branded statements and reports

• Quarterly economic overviews from Sygnia Team

• Compliance

• Annual rebalancing (and cashflow rebalancing as required)

RSA Brokers clients would sign a Model Portfolio Agreement with Sygnia, who would be the appointed fund

manager (utilising their Category II FSCA license).

SYGNIA ASSET MANAGEMENT (PTY) LTD Registration No. 2003/009329/07 CAPE TOWN: 7th Floor I The Foundry I Cardiff Street I Green Point I 8001 I T +27 21 446 4940 I F + 27 21 446 4950 JOHANNESBURG: Unit 40 | 6th Floor | Katherine & West Building | West Street | Sandton | 2196 | Tel: +27 10 595 0550 | Fax: +27 86 206 5173

DURBAN: Office 2 | 2nd Floor Ridgeview | 1 Nokwe Avenue | Ridgeside | Umhlanga Ridge | 4319 | Tel: +27 31 001 0650 | Fax: +27 86 206 4421 4

info@sygnia.co.za I www.sygnia.co.za Sygnia Asset Management (Pty) Ltd is a licensed Financial Services Provider (FSP 873)