In Connection with the Listing Of
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LISTING PARTICULARS IN CONNECTION WITH THE LISTING OF THE IPRO AFRICAN MARKET LEADERS FUND - CLASS (I2) INSTITUTIONAL, A CLASS FUND OF IPRO FUNDS LTD
24 SEPTEMBER 2013 Listing Particulars Number: LEC/TL/06/2013
IPRO Funds Ltd. (the “Company”) is an open-ended investment company incorporated under the laws of Mauritius and holds a Category 1 Global Business Licence ("GBL 1") issued by the Financial Services Commission (‘FSC’) of Mauritius. It is further authorized by the FSC to operate as a collective investment scheme pursuant to the Securities Act 2005. The share capital of the Company is made up of management shares, and separate classes of non-voting redeemable participating preference shares. Each class of non-voting redeemable participating preference shares is expressed as a class fund of the Company. Each class of shares of the Company is offered to investors by way of private placement pursuant to a private placement memorandum dated November 2008 (the “PPM”) as supplemented for each class fund by an offer document relating to that particular class fund (the “Class Fund Particulars”).
The IPRO African Market Leaders Fund - Class (I2) Institutional (“AMLFI”) is a class fund of the Company and investors have acquired, or will acquire, interests in AMLFI and its assets by subscribing for AMLFI non-voting redeemable participating preference shares of no par value issued by the Company in respect of the AMLFI class fund (the “AMLFI Non-Voting Redeemable Participating Preference Shares”).
This document (the “Listing Particulars”) is in relation to the listing of up to 1,000,000 Non-Voting Redeemable Participating Preference Shares (the “Shares”) of AMLFI on the Official Market of the Stock Exchange of Mauritius Ltd.
Nothing in this document shall under any circumstances be construed as a public offering of shares.
This document is confidential and intended for the sole use of the person to whom it has been delivered and is not to be used, reproduced or distributed to any other person (other than professional advisers of the person(s) receiving this document) without the consent of the board of directors of the Company (the “Board”). Investors in the Company are not protected by any statutory compensation arrangements in Mauritius in the event of the Company’s failure. A copy of the Listing Particulars has been filed with the FSC. However, the FSC does not vouch for the financial soundness of the Company or for the correctness of any statements made or opinions expressed with regard to it. An application has been made for the listing of up to 1,000,000 shares of AMLFI at a price of USD 157.96 per share on the Official Market of the Stock Exchange of Mauritius Ltd. As at 16 August 2013, the total value of AMLFI was USD 9,350,916.08. Explanatory Note to the Listing Particulars 1 An application has been made for the listing of up to 1,000,000 shares of AMLFI at a price of USD 157.96 per share on the Official Market of the Stock Exchange of Mauritius Ltd. As at 16 August 2013, the total value of AMLFI was USD 9,350,916.08.
These Listing Particulars have been submitted to The Stock Exchange of Mauritius Ltd in accordance with Listing Rule 16.38. It includes particulars given in compliance with The Stock Exchange of Mauritius Ltd Rules governing the Official Listing of Securities for the purpose of giving information with regard to the issuer. The directors, whose names appear on page 17 of this document collectively and individually, accept full responsibility for the accuracy or completeness of the information contained in this document and confirm, having made all reasonable enquiries that to the best of their knowledge and belief there are no other facts, the omission of which would make any statement herein misleading.
This document is neither an invitation nor a statement in lieu of a prospectus for the public in Mauritius to subscribe for the Shares. This document is issued for the purpose of giving information in relation to the application made by IPRO Funds Ltd. It is intended only for the use of the person to whom it is addressed and is not to be redistributed, reproduced or used, in whole or in part, for any other purpose.
This document has been vetted by the Listing Executive Committee, in conformity with the Listing Rules of The Stock Exchange of Mauritius Ltd. Neither the Listing Executive Committee of the Stock Exchange of Mauritius Ltd nor the Financial Services Commission assumes any responsibility for the contents of this document. The Listing Executive Committee and the Financial Services Commission make no representation as to the accuracy or completeness of any of the statements made or opinions expressed in this document and expressly disclaim any liability whatsoever for any loss arising from or in reliance upon the whole or any part thereof.
The principal investment policies set out in these Listing Particulars will, in the absence of unforeseen circumstances, be adhered to for at least three years following listing and that any material change in the policies within that period may only be made with Shareholder approval.
There has been no material adverse change in the financial or trading position of the group since the last audited accounts or any later interim statement have been published.
Permission has been granted by the Listing Executive Committee on 24 September 2013 for the listing of up to 1,000,000 shares of AMFI at a price of USD 157.96 per share on the Official List of The Stock Exchange of Mauritius Ltd on 16 October 2013.
It is not expected that dealings in the Shares will take place on the Official Market of the Stock Exchange of Mauritius Ltd.
The Board views the listing of the Shares as a means to enhance the latter’s visibility and thus attracting a more diversified group of investors. The listing of the Shares coupled with the compliance with the Listing Rules will increase transparency.
…………………………………… Director Date: 24 September 2013 Listing Particulars Code: LEC/TL/06/2013
2 TABLE OF CONTENTS
Page
IMPORTANT INFORMATION RISK WARNINGS
DEFINITIONS 14
SUMMARY OF PRINCIPAL TERMS
1. CORPORATE INFORMATION 19
2. DESCRIPTION OF THE COMPANY 20
3. TYPES OF SHARES 23
3.1 MANAGEMENT SHARES
3.2 THE SHARES
3.3 EVIDENCE OF SHAREHOLDING
3.4 MODIFICATIONS OF RIGHTS
4. GENERAL OBJECTS AND POWERS 25
5. DESCRIPTION OF AMLF 25
5.1 INVESTMENT OBJECTIVES
5.2 INVESTMENT RESTRICTIONS
5.3 INVESTMENT PRACTICES
6. SUBSCRIPTION OF SHARES 27
6.1 ELIGIBLE INVESTORS
6.2 MINIMUM SUBSCRIPTION AND MINIMUM HOLDING
6.3 SUBSCRIPTION PRICE
6.4 PROCEDURE FOR APPLICATION
6.5 IRREVOCABLE LOANS
7. REDEMPTION OF SHARES 30
7.1 REDEMPTION PRICE
7.2 REDEMPTION PROCEEDS
7.3 REDEMPTION OF SHARES AT THE OPTION OF SHAREHOLDERS
3 7.4 COMPULSORY REDEMPTION
7.5 TEMPORARY SUSPENSION OF REDEMPTION
8. TRANSFER AND TRANSMISSION OF SHARES 35
8.1 TRANSFER OF SHARES
8.2 TRANSMISSION OF SHARES
9. SWITCHES 37
10. DIVIDEND POLICY 37
11. FEES, CHARGES AND EXPENSES 38
12. CALCULATION OF NET ASSET VALUE 40
13. TAXATION AND EXCHANGE CONTROL IN MAURITIUS 43
13.1 TAXATION
13.2 EXCHANGE CONTROL
14. MANAGEMENT AND ADMINISTRATION 44
14.1 DIRECTORS
14.2 INVESTMENT MANAGER
14.3 INVESTMENT ADVISOR
14.4 ADMINISTRATOR, TRANSFER AGENT AND REGISTRAR
14.5 DISTRIBUTOR
14.6 MANAGEMENT COMPANY AND SECRETARY
14.7 CASH CUSTODIAN
14.8 CUSTODIAN
14.9 CONFLICT OF INTEREST
14.10 ANTI MONEY LAUNDERING
15. ACCOUNTS AND INFORMATION 52
16. CLASS FUND PARTICULARS 52
17. APPLICATION DOCUMENTS 52
18. MATERIAL CONTRACTS 53
19. DOCUMENTS AVAILABLE FOR INSPECTION 53
4 20. APPENDIX I 55
IMPORTANT INFORMATION
The Listing Particulars include particulars given in compliance with the Stock Exchange of Mauritius Ltd Rules Governing the Official Listing of Securities for the purpose of giving information with regard to the issuer. The directors, whose names appear on page 17, collectively and individually, accept full responsibility for the accuracy or completeness of the information contained in these Listing Particulars and confirm, having made all reasonable enquiries that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.
Statements made in these Listing Particulars are, except where otherwise stated, based on the laws and practice currently in force in Mauritius and are subject to changes.
No Person has been authorized to issue any advertisement or to give any information or to make any representation in connection with the offering, subscription or sale of Shares, other than those named in these Listing Particulars and, if issued, given or made, such advertisement, information or representation must not be relied upon as having been authorized by The Company. Neither the delivery of these Listing Particulars nor the offer, or issue of any Shares shall under any circumstances create any implication or constitute a representation that the information given in these Listing Particulars have not changed since the date hereof.
The Listing Particulars does not constitute and may not be used for the purposes of an offer or solicitation to anyone in any jurisdiction in which such offer or solicitation is not authorized, or to any person to whom it is unlawful to make such offer or solicitation. The distribution of the Listing Particulars and the offering of Shares in certain jurisdictions may be restricted and, accordingly, persons into whose possession these Listing Particulars fall are required to be informed about, and to observe, such restrictions. Prospective investors should inform themselves as to (a) the legal requirements within the countries of their nationality, citizenship, residence, ordinary residence or domicile for the purchase or holding of Shares, (b) any foreign exchange restrictions or exchange control requirements which they might encounter on the acquisition or sale of Shares, and (c) the income tax and other taxation consequences which may apply in their own jurisdictions relevant to the purchase, holding or disposal of Shares.
Prospective investors are also reminded that all financial investments carry inherent risks and no assurance or guarantee can be given that the investment objectives of AMLFI will be fully met. The net asset value of the Shares issued under the PPM and Company’s constitution (the “Constitution”) and the income from them can rise or fall depending on the factors and forces affecting financial markets.
However the Company has secured the expertise of qualified and experienced personnel, and procedures have been put in place to minimize any potential risks. In addition, the Company has undertaken to provide the best services to prospective investors.
These Listing Particulars may be translated in other languages. In the event of any inconsistency or ambiguity in relation to the meaning of any word or phrase in any translation, the English version will prevail to the extent permitted by the applicable laws or regulations and all disputes as to the terms thereof shall be governed by and construed in accordance with the laws of Mauritius.
NO GUARANTEE OF CAPITAL 5 No capital guarantee is attached to any investments made in the Company and in the Shares. Investments in Shares are volatile in nature. Past performance of AMLFI and of the Company should not be seen as a guide to future performance.
RISK WARNINGS General risks
Persons interested in acquiring Shares should inform themselves or seek professional advice as to: (i) legal requirements or restrictions relating to the acquisition, holding, disposal, or repurchase of Shares; (ii) the treatment of tax consequences relevant to their acquisition, holding or disposal, whether by way of sale or redemption of Shares.
Prospective investors should study these Listing Particulars, the Constitution and the Class Fund Particulars relating to the Shares carefully in its entirety and should not perceive the contents hereof as advice relating to legal, taxation or investment matters. They should consult their legal, tax and investment advisers to determine possible legal, tax, financial or other considerations of subscribing for, purchasing or disposing of Shares before making a subscription for Shares. Prospective investors are also reminded that all financial investments carry inherent risks and no assurance or guarantee can be given that the objective of AMLFI will be fully met. The net asset value of the Shares, the Constitution and Private Placement Memorandum and the income from them can rise or fall depending on the factors and forces affecting financial markets.
However, the Company has secured the expertise of qualified and experienced personnel, and procedures have been put in place to minimise any potential risks. In addition, the Company has undertaken to provide the best services possible to prospective investors.
Specific attention is drawn to the following:
Funds’ organization
Each class fund of the Company (individually a “Class Fund” and collectively the “Class Funds”)AMLFI constituted as a share class of the Company, will represent a separate account and will be maintained with separate accounting records. However, the Company is one entity. Thus all the assets of the Company will be available to meet all of the liabilities of the Company, regardless of the separate portfolio to which such assets or liabilities are attributable. In practice, cross Class Fund liability may arise where any Class Fund exhausts its assets or is unable to meet all of its liabilities or where the liabilities of that Class Fund exceeds its assets.
Liability of the Company
Although each Class Fund so far as possible will be treated as bearing the liabilities, expenses, costs and charges attributable to it, if its assets are not sufficient, the Board may re-allocate assets, liabilities, expenses, costs and charges between Funds in a manner which is fair to the shareholders of the Company (individually 6 a “Shareholder” and collectively the “Shareholders”) generally. The Board would normally expect any such re-allocation to be effected on a pro rata basis having regard to the net asset value of each class of shares. If there is any such re-allocation the Board will advise Shareholders of such re-allocation though written notice.
Shareholders are not, however, liable for the debts of the Company. A Shareholder is not liable to make any further payment to the Company after he having paid for the purchase of Shares in full.
Specialist Funds
Investments held in specialist funds, such as funds investing primarily in a specific geographic region or specific asset class, economic sector or market segment may have more concentrated portfolios and be significantly affected by changes to the fundamentals of such region, asset class, economic sector or market segment. Investments may therefore be exposed to high levels of risk and carry a higher risk to capital and be potentially more volatile than Funds investing in a more diversified portfolio.
Effect of placing fee
Where any placing fee is imposed, Shareholders who sell Shares may not (even in the absence of a fall in the value of the relevant investments) realize the amount originally invested. Shares should be viewed as a long term investment.
Suspension of dealing in Shares
Shareholders are reminded that in certain circumstances their right to sell or redeem Shares may be suspended (see section 6.5 “Temporary Suspension of Redemption”)
Risks affecting fixed-income Class Funds
Interest rate fluctuations are likely to affect the capital value of investments within those Funds. When interest rates rise, the capital value of fixed-income securities held by fixed-income Funds is likely to fall resulting in a fall in the net asset value of these Funds and vice versa.
The values of investments will fall in the event of the default or perceived increased credit risk of an issuer. This is because such investments will generally be considered less attractive to hold than similar investments and the capital values of the investments decrease accordingly.
Yields may vary and the level of income from these Funds may fluctuate significantly. This is because the holdings within the Class Fund’s portfolio and their values will change over time.
Where a distribution yield is higher than a redemption yield it means income is paid at the expense of capital.
Call or buy-back / reinvestment risk
Many fixed-income securities, in which AMLF may invest, contain call or buy-back features which permit the issuer of the security to call or repurchase it. If an issuer exercises such a “call option” and redeems the securities, AMLF may have to replace the called security with a lower yielding security, resulting in a decreased rate of return for the Funds.
Forward trading
Forward contracts and options thereon, unlike futures contracts, are not traded on exchanges and are not standardized; rather, banks and dealers act as principals in these markets, negotiating each transaction on an individual basis. Forward and “cash” trading is substantially unregulated; there is no limitation on daily price movements and speculative position limits are not applicable. The principals who deal in the forward 7 markets are not required to continue to make markets in the currencies or commodities they trade and these markets can experience periods of illiquidity, sometimes of significant duration. Disruptions can occur in any market traded by AMLFI due to unusually high trading volume, political intervention or other factors. The imposition of controls by governmental authorities might also limit such forward (and futures) trading to less than that which the investment manager would otherwise recommend, to the possible detriment of AMLFI. In respect of such trading, AMLFI is subject to the risk of counterparty failure or the inability or refusal by a counterparty to perform with respect to such contracts. Market illiquidity or disruption could result in major losses to AMLFI. Concentration of interests
Although AMLFI may hold diversified portfolios, it may hold a few relatively large positions in relation to certain investments or even be exclusively invested in a sole security. Consequently, a loss in any such position could result in significant losses to AMLFI and a proportionately higher reduction in the net asset value of AMLFI than if AMLFI had invested in a wider number of positions.
Borrowing
Insofar as may be permitted by its Constitution, the Company and, if any, the subsidiaries, entities or other structures through which it may from time to time invest will utilize borrowings and this will involve the Company charging, pledging, mortgaging or otherwise granting security over assets. A lender may request a charge or pledge over the assets of the Company (rather than in respect of the assets of a particular subsidiary or entity, if any) and, if granted, this may restrict the ability of the Company to utilize further borrowings.
Price risks
The Shares, as well as the securities acquired by AMLFI, are subject, as any other securities, to price risks. The risk of a decrease in the value of shares, as well as the potential for an increase in their value, is usually greater in the case of an equity fund than in the case of a bond fund.
It should be appreciated that, due to the nature of certain economies, the respective stock exchanges may be of a less developed nature than those in developed countries. Hence, levels of volatility in share price movements may be greater than can be experienced in developed economies. Difficulties may be experienced in trading volumes, which may lead to greater price volatility. Settlement systems may not facilitate the efficient delivery of stock or cash to AMLFI.
Inflation
A rising rate of inflation will have the effect of reducing the actual value of any gain by an equivalent amount.
Investment risks
Another risk to which a Shareholder may subject is the risk of insolvency of an issuer of the securities or other assets in which AMLFI may invest.In such circumstances, the investments made by AMLFI, and consequently the value of the Shares, may become entirely worthless.
Investments in foreign and unrecognized or unregulated markets
AMLFI may invest in markets that may be subject to regulations which differ from internationally recognized standards and investments in such markets may involve an additional risk.
Investment in exempt international schemes or other unregulated collective investment schemes
The Company, through its Funds, may invest in schemes that may not be subject to any form of authorization 8 or regulatory supervision. Such schemes may not required to have an independent custodian or any custodian at all. Therefore, investment in such schemes carries a higher potential risk and this should be taken into account in any investment decision.
Investment in illiquid assets
AMLFI may invest in shares listed on stock exchanges in different countries in Africa and other assets which may be illiquid. As a result, the spread between bid and offer prices may be significant and it may be difficult for AMLF to deal in any such investments or to obtain reliable information about their value or the extent of the risks to which such investments are exposed.
Country Risks
The funds of AMLFI will be primarily invested in the Sub Saharan Africa region. Consequently, the performance of the portfolio is highly dependent on the overall performance of the economy of the countries.
In addition, while a number of African countries are economically well diversified, some others are highly dependent on individual economic sectors, such as mining, banking, basic materials and agriculture, which can be subject to sudden and unpredictable developments. This can make investments in African capital markets more volatile than investments in markets which represent more diversified economies and which are therefore less susceptible to unexpected developments in specific sectors of their economy.
Political Risks
Africa is in the process of democratizing but political risks in Africa remains relatively high. Some African countries can be subject to sudden changes in political regime, which can be potentially destabilizing for capital markets.
Exchange Rate Risks
The attention of prospective investors' and shareholders is drawn to exchange rate risk (foreign exchange risk). Shareholders are subject to this risk due to the different currencies that may be involved, i.e. the currency in which Shareholders have purchased the Shares and the currency of the securities in which AMLFI invests. Investors' attention is drawn to the fact that there is currently no fixed exchange rate and the value of currencies therefore constantly changes, depending on market situations.
Changes in foreign currency exchange rates may adversely affect the value of the investments made by AMLFI since the value of the currency in some markets, in relation to other currencies, may decline such that the value of the investment is adversely affected. Furthermore, political instability in Africa and the relative lack of economic diversification may impact foreign exchange markets, as well as capital marketsm adversely. Because many African currencies are thinly traded, this can make investment in Africa potentially more volatile than investment in countries with more widely traded currencies. Hence bid-offer spreads for many African currencies remain at relatively high levels and AMLFI shall have to incur such charges.
Change in law
The effect of any potential changes to any applicable law or regulations, whether before or after this private offer, cannot be predicted but could also cause actual results and benefits to differ materially from those expressed or implied in this document or any sales or promotional materials.
Currency hedging
AMLFI may issue shares and redeem them in US dollar, sterling and euros. The base currency of the 9 Company is US dollar, but AMLFI, or other Funds, may be denominated in currencies other than the US dollar. Accordingly, the net asset value of AMLFI may be affected positively or negatively by fluctuations in exchange rates, notwithstanding any efforts made to hedge such fluctuations. In addition, prospective investors whose assets and liabilities are primarily denominated in currencies other than the currency denomination of AMLFI in which they subscribed should take into account the potential risk of loss arising from fluctuations in the rate of exchange between the currency of their Shares and such other currency. The Company may utilize derivatives such as forwards, futures, options and other derivatives to hedge against currency fluctuations, but there can be no assurance that such hedging transactions will be effective or beneficial. Any such currency hedge placed by the Company will be for an amount based on the estimated value of the assets of the relevant Class Fund and may thus represent an over or under hedge of the actual value of the relevant property.
Derivative and hedging mechanisms
Capital markets in Africa are relatively unsophisticated and derivative and hedging structures are virtually non-existent. This means that generally it may not be possible to hedge the portfolio against falling capital markets or exchange rates and this potentially could add to short term volatility and expose investors to short-term capital losses.
Research risks
African capital markets are not widely researched by international stock broking and investment banking institutions. In addition to its own research analysts, the investment manager has appointed an investment advisor to make up for this deficiency but it remains the case that the 'consensus' forecasts that apply to securities in more thoroughly researched markets are largely absent in Africa and investors are therefore advised that they will be relying on the proprietary research of a single investment manager to a greater degree than would be the case with investments in more mainstream markets.
Liquidity risks
Certain investment positions may be relatively illiquid. AMLFI may invest in securities of financially troubled companies, illiquid over-the-counter securities and non-publicly traded securities. Futures positions may be illiquid because, for example, some exchanges limit fluctuations in certain futures contract prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits”. Once the price of a contract for a particular future has increased or decreased by an amount equal to the daily limit, positions in the future can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. Similar occurrences could prevent AMLFI from promptly liquidating unfavourable positions and subject AMLFI to substantial losses. In addition, AMLFI may not be able to execute futures contract trades at favourable prices if little trading in the contracts involved is taking place. It is also possible that an exchange may suspend trading in a particular contract, order immediate liquidation and settlement of a particular contract, or order that trading in a particular contract be conducted for liquidation only.
Redemptions
Shareholders may apply to have their Shares redeemed on any redemption dealing day. However, the ability of AMLFI to meet redemption requests will depend on the availability of liquidity to AMLFI. This in turn will be affected by the liquidity of the underlying entities in which AMLFI may invest. Although investments in certain types of securities may in normal market circumstances be liquid; at times and particularly during periods of market turmoil, previously liquid investments may become illiquid. Accordingly, in certain circumstances the Board may decide to utilize their power to defer redemption requests above a certain percentage, seek to give effect to redemptions in specie or from time to time suspend the subscription and redemption of such Shares.
A prospective investor should realize that should Funds incur substantial losses as a result of their investment 10 activities, the Funds may have insufficient monies from which to pay the requested redemption payment or may be otherwise restricted by any relevant law from completing the redemption. Sizeable redemptions of Shares may have an adverse impact on the ability of the Funds to successfully conduct its business and activities in relation to the portfolio. Redemptions of all Shares or all Shares of particular Funds may be suspended by the Company in certain circumstances.
Settlement Risks
The organisation of settlement systems in African equity markets may be less secure than in developed markets. Consequently there is a risk that the assets of the fund may be in jeopardy because of defects in the settlement system. While AMLFI will seek to use counterparties whose financial status is such that the settlement risk is reduced, there can be no certainty that such risks can be completely eliminated. Furthermore, compensation schemes may be non-existent, limited or inadequate to meet the claims from AMLFI in the event of loss due to failures in the settlement system. Furthermore, due to the local postal and banking systems, no guarantee can be given that all entitlements attaching to securities acquired by AMLFI (including in relation to dividends) can be realised. However, none of the Company's service providers or any of their agents makes any representation or warranty about, or any guarantee of the operation, performance or settlement, clearing and registration of transactions dealing in such markets.
Efficient Portfolio Management
AMLFI may be subject to risks associated with derivative instruments used for efficient portfolio management. Derivative instruments are considered for these purposes to consist of securities or other instruments whose value is derived from or related to the value of some other instrument, asset, rate or index, and not to include those securities whose payment or principal and/or interest depends upon cash flows from underlying assets, such as mortgage-backed or asset-backed securities. As such, these instruments may be particularly sensitive to changes in the market value of the related instruments or assets. In addition, derivative instruments may be particularly sensitive to changes in prevailing interest rates. Derivative instruments also involve the risk of mispricing and the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index.
Tax Structure
AMLFI invest in asset classes which may be subject to withholding and other taxation in the jurisdiction in which investment may be made. The incidence of such taxation may have a material and adverse effect on the return to and/or income received by investors in AMLFI. Whilst the Funds reserve the right to invest in certain asset classes in a tax efficient manner, changes in tax laws and practices as they affect the Funds may affect, reduce or remove any tax advantages inherent in any structure.
Fees, Expenses and Charges
Whether or not the Company is profitable, AMLFI is required to meet certain fixed and ongoing costs, including, without limitation, start-up and organizational expenses, ongoing administrative and operating expenses, management and advisory fees, interest and arrangement charges and fees on borrowing and margin and other payments under derivative and other arrangements.
Forward-looking statements
The Listing Particulars may contain statements that are, or may be, forward looking with respect to earnings, dividends and financial conditions, results of operations and business of AMLFI or the Company. By their very nature, forward looking statements involve certain risks and uncertainties because they relate to events and depend on circumstances that will occur in the future, some of which are, or may be, beyond the control of AMLFI or the Company. No assurance can be given that the future results or developments covered by such forward-looking statements will be achieved. There are a number of factors that could cause actual 11 results or developments to differ materially from those expressed or implied by such forward looking statements.
Custody risks
A custodian has been appointed to provide cash and security custody services to the Company. Bankruptcy or fraud of the bank may impair the operational capabilities or the capital position of the Company and result in losses and the net asset value of AMLFI to suffer. The Company’s custodian may not be required to segregate the Company’s assets deposited with them, in which case the Company’s assets may be subject to the claims of the custodian's general creditors if the custodian becomes insolvent.
Market risks
AMLFI will invest in shares which are listed on stock exchanges in different countries in Africa. As a result, the valuation of the assets of AMLFI will be dependent upon the bid and offer prices on these exchanges, which can be considered illiquid as compared to developed market stock exchanges.
No guarantee of capital
No capital guarantee is attached to the investment in AMLFI. Investments in shares are volatile by nature. Past performance should not be seen as a guide for future performance.
Mauritius Related Risks
The Company is required to comply with the provisions of the Financial Services Act 2007, and the Securities Act 2005 and the regulations made under those Acts. Consequently, the Company will have to disclose to the relevant authorities any information which they may require pursuant to these Acts and further the Company will have to comply with and report any suspicious transactions under the Financial Intelligence and Anti-Money Laundering Act 2002.
Pursuant to the Mauritius Companies Act, 2001, the Funds may only make a dividend distribution to their respective Shareholders if they satisfy the solvency test prescribed by the Mauritius Companies Act, 2001. The Funds would satisfy the solvency test when they are able to pay their debts as they become due in the normal course of business and the value of the Funds assets is greater than the value of their liabilities. In addition, the Funds may only pay dividends out of retained earnings, after having made good any accumulated losses at the beginning of the accounting period. These limitations may adversely affect the Funds ability to make dividend distributions to their respective Shareholders.
DEFINITIONS
The following definitions apply throughout these Listing Particulars unless the context otherwise requires:
Act The Companies Act 2001 or as may subsequently be amended from time to time or replaced.
Administration Agreement The agreement made between the Company and the Administrator, relating to the appointment and obligations of the Administrator, as amended from time to time.
Administrator Any person, firm or corporation legally appointed to 12 act as administrator of the Company.
Application Documents A set of documents forming part of the Offer Documents needed to register an applicant and process his investment.
Board The board of Directors of the Company as may be constituted from time to time.
Business Day Any day (except Saturday and Sunday and such other day as the Board may determine) on which banks are open for business in Mauritius.
Cash Custodian Any financial institution legally appointed to act as cash custodian of the Company.
Cash Custody Agreement The agreement between the Cash Custodian and the Company appointing a Cash Custodian.
Company IPRO Funds Ltd incorporated on the 26th of May 1997 under the Act, holding a Category 1 Global Business Licence under the Financial Services Act 2007 and authorized to act as a Collective Investment Scheme by the Financial Services Commission under the Securities Act 2005.
Company Secretary Any person, firm or corporation legally appointed to act as the secretary of the Company.
Connected Person In relation to the Distributor, Administrator, Registrar and Transfer Agent, Investment Manager or Investment Advisor means:
i. any company in which the Administrator and the Investment Manager taken together, directly or indirectly, beneficially own twenty per cent or more of the ordinary share capital and any company in which the Administrator, the Transfer Agent, the Investment Manager and the Investment Advisor taken together, directly or indirectly, can exercise twenty per cent or more of the total of the votes which can be exercised; or ii. any director or officer of the Administrator, Transfer Agent and the Investment Manager or of a connected person of that company, as defined in (i) above.
Constitution The Constitution of the Company as amended from time to time.
Dealing Day The first Business Day following the Valuation Day or such other day as the Board may determine from time to time as a “Dealing Day”.
Directors The directors of the Company for the time being, or, as the case may be, assembled as a Board or as a 13 committee of the Board.
Distribution A distribution by the Company to a shareholder means: (i) the direct or indirect transfer of money or property, other than the Company's own shares, to or for the benefit of the shareholder or; (ii) the incurring of a debt to or for the benefit of a shareholder; in relation to shares held by that shareholder, and whether by means of a purchase of property, the redemption or other acquisition of shares, a distribution of indebtedness, or by some other means.
Distributor Any person, firm or corporation legally appointed to act as distributor of the Shares.
Eligible Introducer Certificate A certificate drawn in the required form by any qualified Person certifying that it has ascertained compliance with applicable Laws and particularly with the Code on the Prevention of Money Laundering and Terrorist Financing issued by the FSC (and any other applicable code or Laws of similar aim enforceable in Mauritius);
Exit Fee A fee payable by Shareholders upon redemption of Shares as specified in these Listing Particulars.
Fiscal and Purchase/Sale Charges All stamp and other duties, taxes, governmental charges, brokerage, bank charges, transfer fees, registration fees, placing fee and other duties and charges, together with such other provision as the Administrator in its discretion considers should be made for the costs associated with the acquisition, purchase, sale or disposal of investments of the Funds or the creation, issue, sale, exchange or purchase of Shares or in respect of certificates or otherwise which may have become or may be payable in respect of or prior to or upon the occasion of the transaction or dealing in respect of which such duties and charges are payable but does not include commission payable to agents on sales and purchases of Shares.
Global Custodian Any financial institution legally appointed to act as custodian of the Company.
Investment Any asset or right of any description the acquisition of which is authorized by the Constitution and for the time being owned by the Company. Where any such Investment consists of the right to receive repayment of a loan or deposit, references to purchasing or acquiring such Investment shall be taken to include the making of the loan or deposit or the taking of an assignment or otherwise acquiring the right to receive repayment thereof and references to disposing of or realizing such Investment shall be taken to include repayment of 14 the loan or deposit or the making of an assignment or otherwise disposing of the right to receive repayment thereof.
Investment Advisor Any person, firm or corporation that may, from time to time be legally appointed to act as investment advisor to the Investment Manager.
Investment Advisory Agreement The agreement entered into between the Investment Manager and the Investment Advisor relating to the appointment and obligations of the Investment Advisor.
Investment Management Agreement The agreement entered into between the Company and the Investment Manager relating to the appointment and obligations of the Investment Manager.
Investment Manager Any person, firm or corporation legally appointed to act as investment manager for the Company.
Laws The laws of Mauritius and any other applicable laws and regulations for the time being in force.
Listing Particulars This document issued in connection with the present application for listing of shares of the Company.
Listing Rules The rules governing the listing of securities on the SEM as amended from time to time.
Management Share A share of no par value in the capital of the Company designated as a Management Share and having the rights provided for under the Constitution with respect to such shares.
Mauritius The Republic of Mauritius.
Net Asset Value The aggregate value as at the relevant Valuation Day of all the assets less all the liabilities comprised in or attributable to the Shares at the Valuation Day. The calculation of the Net Asset Value shall be carried out according to the same valuation principles for all purposes, in accordance with article 9 of the Constitution.
Net Asset Value per Share The Net Asset Value per Share calculated in accordance with article 9 of the Constitution.
Offer Documents A complete set of informative and detailed documents which is comprised of the Private Placement Memorandum, these Listing Particulars and the Application Documents for subscription in the Shares.
Person An individual, a corporation, a company, a voluntary association, a partnership, a joint venture, a limited liability fund, a trustee of a trust, an unincorporated organization, a government authority or any other legal entity. 15 Placing Fee A fee payable by the investor to the Distributor at a rate determined by the Distributor but not exceeding such threshold rate as specified in these Listing Particulars.
Redemption Price The price at which Shares will be redeemed, calculated in accordance with article14 of the Constitution.
Restricted Redemption Period Such period of time as may be determined by the Board, during which the Shareholders shall not be authorized to redeem their Shares.
Register The register of Shares to be kept pursuant to the Act.
Registrar and Transfer Agent Any person, firm or corporation legally appointed by the Company to keep the Register of the Company and a record of all share transactions
SEM The Stock Exchange of Mauritius Ltd established under the repealed Stock Exchange Act 1988.
Share A non-voting redeemable participating preference share of no par value of AMLFI.
Shareholder A Person who is registered as the holder of Shares in the Register for the time being kept by or on behalf of the Company
Subscription Price The price at which Shares will be issued, calculated in accordance with article 12 of the Constitution.
Transfer Agent Agreement The agreement entered into between the Company and the Registrar and Transfer Agent relating to the appointment and obligations of the Registrar and Transfer Agent
Valuation Day The first Business Day of each calendar week or any other day that the Board may determine from time to time, as being the day on which the assets of AMLFI or of the Company are valued. CORPORATE INFORMATION I. Directory
Directors Capacity Nationality Thierry Hugnin (Chairman) Non-Executive Director Mauritian Roger Leung Shin Cheung Independent Director Mauritian Christine Sauzier Non-Executive Director Mauritian Stéphane Henry Non-Executive Director French Arnaud Leclézio Non-Executive Director Mauritian Bishwarnath Bachun Non-Executive Director Mauritian
16 Distributor Investment Manager Investment Professionals Ltd. IPRO Fund Management Ltd. 3rd Floor, Ebene Skies 3rd Floor, Ebene Skies Rue de l’Institut, Rue de l’Institut, Ebene, Mauritius Ebene, Mauritius
Investment Advisor Administrator, Registrar and Transfer Agent IPRO (Botswana) (Proprietary) Limited Galileo Portfolio Services Limited Unit 3, Plot 115, Kgale Mews 3rd Floor, Ebene Skies Gaborone International Finance Park Rue de l’Institut, Ebene, Mauritius P/Bag 351, Suite # 472 Gaborone, Botswana
Management Company & Secretary Reporting Accountants Mauritius International Trust Company Limited BDO & Co 4th Floor, Ebene Skies Chartered Accountants Rue de l’Institut, 10 Frère Félix de Valois Street Ebene, Mauritius Port-Louis, Mauritius
Cash Custodians Custodians Standard Chartered Bank (Mauritius) Limited Standard Chartered Bank (Mauritius) Limited 2nd Floor Ebene House 2nd Floor Ebene House Left Wing, 33 Cyber City Left Wing, 33 Cyber City Ebene EbeneMauritius Mauritius Standard Chartered Bank Limited (Mumbai AfrAsia Bank Ltd. Branch) 10, Dr. Ferriere Street Crescenzo, 3rd Floor, C-38/39, Port Louis G-Block, Bandra Kurla Complex, Mauritius Bandra (East), Mumbai 400 051, India
Registered Office Compliance Officer c/o Mauritius International Trust Company Limited Abax Corporate Services Ltd. 4th Floor, Ebene Skies 6th Floor, Tower A, 1 Cybercity Rue de l’Institut Ebene, Mauritius Ebene, Mauritius
Legal Advisor Vony Ramsamy Barrister, Law Chambers 5 Unicorn House 5 Royal Street, Port-Louis, Mauritius
2. DESCRIPTION OF THE COMPANY
IPRO Funds Ltd., originally known as Aim Cirne Funds Limited, was incorporated on 26 May 1997 as a private company limited by shares under the laws of Mauritius
The Company is registered with the Registrar of Companies of Mauritius under number 17966/3157 and holds a Category 1 Global Business License issued by the Financial Services Commission. Following the enactment of the Securities Act 2005 and the enforcement of the Securities (Collective Investment Schemes and Closed End Funds) Regulations 2008, the Company applied to the FSC and was granted approval to operate as a Collective Investment Scheme and as a Global 17 Scheme.
A Constitution was adopted by the Company following the revocation of its Memorandum and Articles of Association on 17 November 2008 pursuant to section 44 of the Act.
The Company has been converted from a private company to a public company and a Certificate of Conversion dated 21 January 2013, pursuant to section 268 of the Companies Act 2001, was received from the Registrar of Companies of Mauritius.
The Company forms part of the IPRO Group of companies which is an integrated financial services group providing fund and portfolio management services, stockbroking services and fund administration services through its subsidiaries. Group Structure
55% 40% 5%
The total share capital of the Company is divided into Management Shares of no par value and the non-voting redeemable participating preference Shares.
PROMOTER OF THE COMPANY
The promoter of the Company is Investment Professionals Ltd, with its registered address being 5th Floor, Ebene Skies, Rue de l’Institut, Ebene, Mauritius. Investment Professionals Ltd was incorporated as a private company on 25th August 1992 with the Registrar of Companies of the Republic of Mauritius under file number 10443 and changed its status to public company on 26th April 2007.
18 Investment Professionals Ltd is managed by a Board of Directors of 6 members and 2 appointed alternate directors as follows:
Name Address Date of Appointment Jean-Pierre Dalais King George VI Avenue, Floréal 09 September 1992 Mauritius P. Arnaud Dalais Chemin Campement, Floréal, 19 August 1992 Mauritius Stéphane Henry Royal Road, Mon Choisy, 23 March 2005 Mauritius Thierry Hugnin Casa Andiamo, Avenue des 12 January 2004 Lauriers, Pointe Aux Canonniers Mauritius Gautam Kainth 140 Shivani Appartments, 10 13 May 2011 Extension, Plot No. 63, Patparganj India Saurabh Nanavati B-3&4, 535 Meghdoot, Linking 13 May 2011 Road, Khar, Mumbai 400052, India Jérôme De 62, Domaine de Bon Espoir 30 December 2004 Chasteauneuf Piton, Mauritius Alternate Director to P. Arnaud Dalais Samila Sivaramen Azalees Street, Petit Verger 28 February 2008 Alternate Director to Pointe Aux Sables, Mauritius Thierry Hugnin
The stated capital of Investment Professionals Ltd is Rs. 10,500,000 divided into 1,050,000 no par value ordinary shares held as follows:
Shareholder No. of Shares % shareholding Ciel Investment Limited* 582,750 55.5% Religare Global Asset Management Inc. 420,000 40.0% Mr. Stéphane Henry 47,250 4.5%
* Ciel Investment Limited is a public company listed on the Development and Enterprise Market of the Stock Exchange of Mauritius Ltd.
Investment Professionals Ltd received from the Company distribution fees amounting to USD 157,532 within 2 years preceding the issue of the Listing Particulars.
SUMMARY OF THE PROVISIONS OF THE CONSTITUTION OF THE COMPANY:
Transactions with Directors
Subject to the Act and the Constitution, no Director shall be disqualified from office when contracting with the Company. Any Director contracting or interested in any transaction to be entered into with the Company shall not be liable to account to the Company for any profit realized, but the nature of his interest must be declared, at the meeting of the Board at which the question of 19 entering into the contract or arrangement is first taken into consideration.
Remuneration of Directors
The Board may, by a resolution of the Board, fix the remuneration or benefits of the Directors in respect of services to be rendered in any capacity to the Company.
The Board may in addition to such remuneration, grant special remuneration to any Director who being called upon shall perform any special or extra services to or at the request of the Company.
Borrowing powers of Directors
The Directors may exercise all the powers of the Company to borrow money (including the power to borrow for the purpose of redeeming shares) and hypothecate, mortgage, charge or pledge its undertaking, property, and assets or any part thereof, and to issue debentures, debenture stock or other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or any third party. The borrowing power is limited to an amount in aggregate equal to 5% of the Net Asset Value of any borrowing.
Retirement or non-retirement of Directors
A Director shall be capable of being appointed or re-elected a Director despite having attained the age of 60 (sixty) years old and shall not be required to retire by reason of his having attained that age.
Directors’ qualification shares
A Director need not be a shareholder of the Company but shall be entitled to receive notice of and attend all Special Meetings of the Company.
Dividend
Any Dividend declared shall be distributed at such time or times after being declared as the Board may determine, save that the distribution date shall, in the case of a final dividend, be not more than six months after the date of declaration thereof.
All unclaimed Dividends may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed.
Transfer of securities
The Board may refuse or delay the transfer of any Share to any person whether an existing Shareholder, where among others, the transfer would impose on the transferee a liability to the Company and the transferee has not signed the transfer and the Board acting in good faith decides in its sole discretion that the transfer would not be in the best interests of the Company and/or any of its Shareholders.
Changes in capital
20 The Company may increase or reduce its stated capital, divide, all or any of its share capital into shares of a larger amount or combine all or any of its share capital into shared of a smaller amount.
Transferability of shares
There shall be no restrictions on the transfer of fully paid shares in the Company and such shares may be transferred by an instrument in writing in any usual or common form in use in Mauritius or in any form approved by the Board. Section 87(1) of the Act shall apply to the Company and accordingly the form of the instrument of transfer of the shares shall be in the form as required by Section 24 of the Registration Duty Act of Mauritius, except where the shares are traded on a securities exchange. Any transfer or documents relating to or affecting the title to any share must be registered without payment of any fee.
3. TYPES OF SHARES
The share capital of the Company comprises of non-voting redeemable participating preference shares of no par value and Management Shares of no par value.
10,000 Management Shares have been issued to the Investment Manager; the latter holding all issued Management Shares and non-voting redeemable participating preference shares are offered to investors.
The Company shall not issue bearer shares.
3.1 Management Shares
Management Shares are issued only to the Investment Manager, the latter holding all issued Management Shares. No transfer of Management Shares may be executed without the prior written consent of the Board.
Management Shares shall confer upon the holder thereof a right to cast one vote for each Management Share at shareholder’s meeting of the Company.
Management Shares shall confer upon the holder thereof in a winding up the rights set out in article 43 of the Constitution and the rights attached to Management Shares shall otherwise be in accordance with the articles of the Constitution.
3.2 The Shares
The Shares are offered on a private placement basis to investors. The Board shall have no obligation to first offer the Shares to existing Shareholders in order to maintain the relative voting and distribution rights of the Shareholders.
The Shares shall confer upon the holders thereof the following rights:
a option to redeem their Shares in accordance with the Constitution; a preferential right to Distribution of capital or income of AMLFI; and upon the winding up of the Company, the right to be distributed any assets of the
21 Company in priority to the holders of Management Shares.
The Shares, designated as non-voting shares, shall not confer upon the holders thereof a right to vote at any meeting of the Company, except as provided for in Section 3.4 hereof (Modification of Rights) and Article 18 of the Constitution.
Each class of Shares shall constitute a fund within the Company. Each fund has its own features and characteristics enabling it to satisfy the demand of prospective investors as well as existing Shareholders such fund.
The Company shall not have power to issue share warrants to bearer.
No commissions, discounts, brokerage or any other special terms were granted within the 2 years immediately preceding the issue of these Listing Particulars, in connection with any issue or sale of any capital.
AMLFI, as other listed funds, is required to disclose all material information to the market, in order to ensure that investors and Shareholders are fully informed of all material information of AMLFI that may affect the NAV.
3.3 Evidence of Shareholding
The Board of the Company have decided that the Shares of the Company will be issued in a non- certificated form. The Company shall, unless its Shares have been deposited under a system conducted by a central depository and settlement company approved under the Securities (central Depository, Clearing and Settlement) Act 1996, within 28 days after the issue or registration of a transfer of Shares in the Company, as the case may be, send a share certificate to every holder of those Shares in accordance with Section 97 of the Act. A seal or a facsimile thereof, which shall be affixed with the authority of the Board.
The ownership of Shares is evidenced by an entry of the Shareholder’s name in the Register and the issue of a trade confirmation certificate. As per the frequency specified by the applicant in the Application Documents, a statement of shareholding will be issued by the Registrar and Transfer Agent. Following an initial application, each Shareholder will be advised of a shareholder account number by the Registry. This number should be quoted in all further communications with the Company or any of its functionaries.
3.4 Modifications of Class Rights
Subject to the Law, all or any of the special rights for the time being attached to any Shares may from time to time be altered or abrogated with the consent in writing of the holders of AMLFI Non- Voting Redeemable Participating Preference Shares detaining not less than three-fourths of the issued Shares , or with the sanction of a special resolution passed at a separate meeting of the Shareholders . To any such separate meeting all the provisions of the Constitution as to meetings of shareholders of the Company shall mutatis mutandis apply, except that (i) the necessary quorum shall be two Shareholders holding or representing by proxy not less than one-third of the issued Shares of the class or (but so that if at any adjourned meeting of such Shareholders a quorum as above defined is not present, those Shareholders of the class who are present shall be a quorum), and (ii) every Shareholder shall be entitled on a poll to one vote for every such Share held by him and that any
22 Shareholder present in person or by proxy may demand a poll.
The special rights attached to any of the Shares having preferential rights shall (unless otherwise expressly provided by the conditions of issue of such Shares) be deemed not to be varied by:-
(i) the creation, or issue of further Shares ranking pari passu therewith; or (ii) by the creation, or issue of Management Shares; or (iii) by the creation, issue or redemption of Shares.
4. GENERAL OBJECTS AND POWERS
The purpose of the Company, amongst others, is mainly to carry on its business as an investment company. To that extent the Company’s activities consist of but are not limited to the following:
a) to hold and manage, sell and dispose of securities or any other property of any kind and description for the purpose of making revenue and profit; and
a) to do all such things that are incidental or conducive to the attainment of the above object.
The Company is duly authorized by the Commission to act as a Feeder Collective Investment Scheme and may therefore invest all of its assets in a single collective investment scheme.
5. DESCRIPTION OF AMLF I
5.1 Investment Objectives AMLFI aims to achieve long term capital growth by primarily investing in the most liquid Sub- Saharan African equities that in our opinion are or are expected to be future leaders in their industry and industry segment.
5.2 Investment Restrictions
The Company (including its Funds) is not allowed under the Constitution to:
(i) invest in a security of any class in any company or body if any Director or officer of the Investment Manager owns more than fifteen per cent (15%) of the total nominal amount of all the issued securities of that class or if the Board and officers of the Investment Manager collectively own more than fifteen per cent (15%) of those securities; or (ii) purchase a security of an issuer where, immediately after the purchase, the Company would hold more than 10% of a class of securities of that issuer; (iii) purchase an illiquid asset if, immediately after the purchase more than 10% of the net assets of AMLFI, taken at market value at the time of the purchase, would consist of illiquid assets; (iii) invest in futures contracts (other than futures contracts entered into for hedging purposes); (v) purchase real estate; (vi) purchase a mortgage; (vii) purchase a security for the purpose of exercising control or management of the issuer of the security; or (viii) purchase or sell a physical commodity, including precious metals (vix) make any investment which would involve the assumption of unlimited liability.
23
The above investment restrictions are also applicable to AMLFI.
5.3 Investment Practices
The Company shall not:
(i) borrow money or provide for the creation of any encumbrance on its assets except in the two following situations:
(a) the transaction is a temporary measure to accommodate requests for the redemption of Shares while the Company effects an orderly liquidation of its assets, and, after giving effect to the transaction, the outstanding amount of all borrowings of the Company does not exceed 5% of the net assets of the Company taken at market value at the time of the borrowing;
(b) the encumbrance secures a claim for the fees and expenses of the custodian or a sub- custodian for services rendered in that capacity;
(ii) subscribe for securities offered by a company under formation; (iii) engage in the business of underwriting or marketing securities of any other issuer; (iv) make any loan out of the Company's assets or guarantee securities or obligations of another person; (v) purchase or sell securities other than through market facilities where these securities are normally bought and sold unless the transaction price approximates the prevailing market price or is negotiated on an arm’s length basis; (vi) purchase a security from, or sell a security to, one of the following persons:
the Investment Manager or the Custodian; an officer of the Investment Manager or the Custodian; an affiliate of the Investment Manager or the Custodian unless the purchase from or sale to the affiliateis carried out at arm’s length.
The above investment practices are also applicable to AMLFI.
5.4 Investment Strategy
The Investment Strategy of AMLFI is centered around:
(i) value through thorough ‘on-the-ground’ and technical research capabilities of the Company and of the Investment Manager; (ii) high dividend yield (optimized through the exposure to an in-house developed fundamental dividend yield tracker). This strategy has historically supported alpha generation in relatively young and illiquid markets (Cap drag); (iii) investments in high quality African/multicultural companies which derive a significant portion of their earnings from the African continent and so enabling it to participate in the performance of these high growth frontier markets; (iv) ‘ investability criteria of an investee company’ which is highly geared towards most tradable stocks found on the African continent; 24 (v) outperforming (before fees and expenses) the performance of the 1-month USD LIBOR + a spread of 4% over a 3-5 year period; and (vi) enabling investors to participate in the economic transformation of African Countries at a relatively cheap cost and will provide a diversified and less concentrated exposure than the existing popular African indices.
6. SUBSCRIPTION OF SHARES
6.1 Eligible Investors
Each potential investor must represent and warrant to the Company that, amongst other things, such investor is able to acquire Shares without violating applicable Laws or the laws of the country of residence (if different) or if a body corporate the laws of the jurisdiction in which it is incorporated or established of such investor. The Company will not knowingly offer or sell Shares to any potential investor to whom such offer or sale would be unlawful, or to any potential investor who, by investing in the Company, would commit a breach of the laws relating to the prevention of money laundering in his jurisdiction of such investor or in Mauritius.
Pursuant to the Laws relating to the prevention of money laundering, the Company must ascertain the identity of the potential investor by requiring documents as listed in the “Application Documents”. If the said Application Documents have been channeled through a financial intermediary (other than the Distributor), that Person shall properly certify the identity as well as the proof of address of the applicant by completing an Eligible Introducer Certificate or in any other manner prescribed by Laws.
Such information shall be collected for compliance reasons only and shall not be disclosed to unauthorized Persons. In case of refusal by a potential investor to provide the documents required, the application for subscription will not be accepted unless the potential investor has good reasons and produces any such other documentation that will satisfy the customer due diligence standards of the Company.
The Company shall not be bound to register more than four persons as joint holders of any Share. Shares may be transferred to persons under the age of 18.
6.2 Minimum Subscription and Minimum Holding
6.2.1 Minimum subscription
The minimum initial subscription and additional subscriptions per investor shall be US Dollars 1,000,000.
6.2.2 Minimum holding The Board may from time to time determine the minimum amount in value or number of any holding of Shares.
If a redemption results in a Shareholder’s total holding falling below the minimum amount in value or number the Shareholder’s entire holding may be compulsorily redeemed at the Board’ discretion.
6.3 Subscription Price 25 Shares are available for subscription on each Dealing Day at a subscription price (the ‘Subscription Price’) exclusive of any Placing Fee being a sum ascertained by:
(i) assessing the Net Asset Value as at the Valuation Day; (ii) adding such sum as the Administrator considers represents the appropriate allowance for Fiscal and Purchase Charges; (iii) dividing the amount calculated under paragraph (i) by the number of Shares of then in issue or deemed to be in issue; and (iv) rounding the resultant amount downward to the nearest cent.
6.4 Procedure for Application
Subscriptions for Shares should be made on the Application Documents which should be received and accepted by the Registrar and the Transfer Agent by 5.00 p.m. Mauritian time five Business Days prior to the Dealing Day in respect of which subscription is sought (being referred to as “Subscription Notice Day”). If the Application documents are received on a day which is not a Business Day, the Subscription Notice Day shall be the next Business Day.
Settlement may be made by cheque, bank drafts or bank transfers.
Cheques and bank drafts should be made payable to "IPRO Funds Ltd" and in the currency of denomination of AMLFI in which the applicant wishes to invest. Cheques drawn in currency other than that of AMLFI in which the applicant wishes to invest will only be considered once converted into the appropriate currency of AMLFI. For the purposes of facilitating bank transfers, a bank instruction letter (“BIL”) is provided with the Application Documents for the convenience of applicants.
Cleared subscription monies of an applicant must reach the relevant subscription monies bank account held by the Company for value on or before the Subscription Notice Day. If the Subscription Notice Day is not a Business Day, cleared monies must be received on the next Business Day.
If either the Application Documents or cleared subscription monies of an applicant are received after the Subscription Notice Day, the investment shall be deferred to the next Dealing Day at the Subscription Price applicable on that Dealing Day.
Applications for subscriptions shall be irrevocable. Applicants shall not therefore be entitled to withdraw subscription requests once accepted by the Registrar and Transfer Agent.
Applicants will be informed in writing by the Registrar and Transfer Agent once their applications have been accepted and their subscription monies received in the relevant subscription monies bank account held by the Company. Applicants will be advised by email of the number of Shares which have been issued to them and of their personal account number by a trade confirmation certificate within 21 days from the Subscription Notice Day. The certificate will also give confirmation on the date and price of the Shares purchased.
Application monies that are received prior to the issue of the Shares will not bear any interest for the benefit of the investor.
26 The Company reserves the right to reject any application, in which event subscription monies received by the Registrar and Transfer Agent will be returned to the applicant without interest. Especially, the Company may reject an application for Shares if that will cause the Company to exceed any limit for subscription of Shares fixed by the Board from time to time.
A Placing Fee of up to 4% of the subscription monies may be payable by the investors to the Distributor on the issue of Shares.
6.5 Irrevocable Loans
6.5.1 Use of subscription monies before issue of Shares
This Section is only relevant should AMLFI invest, from time to time in collective investment schemes, wherein the subscription monies are required to be received by those schemes prior to the issue of shares
The underlying fund(s) in which AMLFI may substantially invest its assets may deal infrequently in their shares with lengthy intervals between Dealing Days and may release their share prices only after those underlying funds have, in turn, received valuations of their underlying investments.
This means that the Company, when valuing the net assets of AMLFI in order to determine the Subscription Price and thus the number of Shares to be issued to an investor, must either base those valuations on historical prices or continue to hold applicants’ subscription monies in the Company’s subscription account until current prices become available.
The Board wishes to ensure that the performance of AMLFI track as closely as possible the performance of its underlying funds and that applicants' monies are invested as promptly as possible, so that the investors receive the benefit (if any) of the performance of the underlying funds as quickly as possible. Accordingly, the Board has rejected the option of using historical prices. However, the Board is reluctant to leave the subscription monies of applicants in the Company’s subscription account while the current prices become available as this may have the effect that AMLFI misses opportunities to invest in underlying funds. The Board wishes to have subscription monies invested as soon as possible. Therefore, the Company may use the subscription monies for investment purposes before the Subscription Prices of Shares are determined (based on the share price of the underlying funds) and Shares are actually allotted.
In these circumstances, applicants shall be deemed to have made IRREVOCABLE LOANS OF THEIR SUBSCRIPTION MONIES (this procedure will be referred to as the “Loan(s)”) to the Company for investment purposes only. As soon as the Subscription Price is determined as at the relevant Valuation Day, the Company will redeem the Loans and apply the proceeds to issue of the appropriate number of Shares to which their original subscription monies entitle them. Applicants shall not receive any interest on the Loans, but shall instead be considered as participating in the profits of AMLFI (if any) from the relevant Dealing Day on which they have been issued Shares. 6.5.2 Procedure in case of winding up of the Company
In the event that the Company is wound up before applicants have been issued Shares and before the subscription monies of an applicant have been used by the Company, the claims if such
27 applicant against the Company under the Loan shall rank pari passu with the claims of other unsecured creditors.
If the Company is wound up before the applicant has been issued Shares but after the subscription monies have been used by the Company for investment purposes, the subscription process shall continue and the sole entitlement of such applicants shall be to the redemption values of Shares issued or deemed to have been issued. The Distribution procedure is provided for in the Constitution of the Company, the Shareholders ranking first on the Distribution list will receive their money on a pro rata basis according to the number of Shares that they have been issued posterior to the subscription process.
7. REDEMPTION OF SHARES
Redemptions at the option of the Shareholders
Shares may be redeemed at the option of the Shareholders in accordance with the Constitution PROVIDED that such redemption shall not be made during any Restricted Redemption Period except as for such circumstances as detailed hereunder.
Consistent with the objective of AMLFI to seek long term capital appreciation and keeping in mind the illiquid nature of most African Stock markets, the Board, in the interest of all Shareholders, have decided to impose a lock-in period of three months whereby the Shareholder will not be allowed to redeem their Shares, save as detailed below.
The lock-in period shall apply distinctly as from the date and each and every subscription in AMLFI and shall also apply distinctly to each and every additional investment in AMLFI made by an existing Shareholder. Notwithstanding the foregoing, the Board may, at their discretion, permit the redemption of Shares on any Dealing Day within the said lock-in period. However the total amount of such redemption shall be limited, to the extent of the total amount of such redemptions shall be limited, to the extent of the total amount of new subscriptions on that Dealing Day. Such redemption shall bear an Exit Fee of 1% of the amount invested.
The Exit fee shall be applied to the value of the Shareholder’s Shares redeemed on the relevant Dealing Day. For Shareholders who have multiple subscriptions, the Exit fee shall be applied in such manner that results in the Exit fee being imposed at the lowest possible rate.
Therefore a first-in first out approach shall be adopted whereby those Shares purchased earliest shall be deemed to have been redeemed first. In case the total amount of all redemption requests exceeds the total amount of new subscriptions on a particular Dealing Day, then the redemptions request would be treated as a first come- first served basis and the remaining redemptions would be carried forward to the next Dealing Day by default, unless otherwise cancelled in the meantime.
7.1 Redemption Price
Shares will be redeemed in currency denomination of AMLFI, being US dollars at the redemption price (the ‘Redemption Price’) calculated in respect of the Dealing Day at which the redemption is sought. The Redemption Price for each Share is calculated by:
28 (i) ascertaining the Net Asset Value as at the Valuation Day; (ii) deducting therefrom such sum as the Administrator considers represents the appropriate allowance for Fiscal and Sale Charges; (iii) dividing the resulting sum by the number of Shares then in issue or deemed to be in issue; and (iv) rounding the resultant amount downward to the nearest cent.
7.2 Redemption Proceeds
The redemption proceeds will be paid in denomination of AMLFI, being US dollars by way of bank transfers. Redemption proceeds shall be paid, subject to the Company satisfying the solvency test as defined under the Act, in US dollars within ten Business Days after the date upon which the redemption price applicable at the relevant Valuation day has been determined. As from the date on which a Shareholder’s Share are redeemed, the former Shareholder shall rank as an unsecured creditor of the Company for the sum payable as redemption proceeds until such time as the redemption proceeds are debited from the redemption bank account held by the Company.
7.3 Redemption Procedures
Subject to the provisions of the Constitution, the Company shall, on receipt of a redemption request sent to the Registrar and Transfer Agent by a Shareholder, redeem all or part of the Shares subject to any minimum holding as determined by the Board from time to time.
Redemption requests to redeem Shares must be received and accepted by the Registrar and Transfer Agent by 5.00 p.m. Mauritian time five Business Days prior to the Dealing Day in respect of which redemption is sought (being referred to as “Redemption Notice Day”). If the redemption request is received on a day which is not a Business Day; the Redemption Notice Day shall be the next Business Day.
Redemption requests received after the specified Redemption Notice Day shall be deferred until the following Dealing Day at the Redemption Price applicable on that day.
A redemption request will not be treated as valid unless it is in respect of Shares for which the Subscription Price has been fully paid.
Redemption requests will be irrevocable except in the event of a suspension of redemption as explained in Section 6.5 below.
The Company's obligation to redeem Shares is subject to postponement in the event that requests for redemptions received in respect of any one Dealing Day represents more than 5 per cent of the issued Shares of AMLFI. In such an event, the Company shall not be under the obligation to redeem Shares representing more than 5 per cent of the Shares in issue and , the Company may reduce all but not some of such redemption requests pro rata so that they cover no more than the relevant percentage of the Shares issued. Any part of a redemption request to which remains unexecuted by reason of the exercise of this power by the Company shall be treated as if the request had been made in respect of the next Dealing Day and all following Dealing Days (in relation to which the Company has the same power) until the original request has been satisfied in full.
29 Redemption proceeds may be subject to an Exit Fee as detailed out below.
Exit Fees For redemptions within 3-month Lock In (Restricted Redemption) Period 1.0%
For redemptions (after the 3-month Lock-In (Restricted Redemption) Period but within: One year of investment 0.75% Two years of investment 0.50%
For redemptions more than two years after investment NIL
Note The Exit Fee shall be applied to the value of a Shareholder’s Shares at the relevant Dealing Day. For Shareholders who have made multiple subscriptions, the Exit Fee shall be applied in such manner that results in the Exit Fee being imposed at the lowest possible rate.
Therefore, a first-in, first out (FIFO) approach shall be adopted whereby those Shares purchased earliest shall be deemed to have redeemed first. The rate of exit fee shall take into account the anniversary of each subscription.
7.4 Compulsory Redemption
If the Board in their absolute discretion consider that any Shares that have been acquired or owned or held directly or indirectly by any Person in circumstances which, in their opinion, might result in AMLFI and/or the Company incurring any liability to taxation or suffering any other pecuniary disadvantage which AMLFI and/or the Company might not otherwise have incurred, the Board may require the redemption or transfer of such Shares.
To require the redemption or transfer of Shares in the Company, the Board will serve on the Shareholder a notice requiring him to transfer his Shares to a Person eligible to hold the same or to give a redemption request in respect of such Shares. If any such Person upon whom such a notice is served as aforesaid does not, within 30 days after such notice, transfer such Shares or give a redemption request in respect thereof, he shall be deemed forthwith upon the expiration of such 30 day period to have given a redemption request in respect of all his Shares and the Board shall be entitled to appoint any Person to sign on his behalf such documents as may be required for the purposes of the redemption.
If any Shares are compulsorily redeemed pursuant to this Section, the Board shall deposit in a separate bank account the redemption proceeds. Upon such deposit, the Person whose Shares have been so redeemed shall have no interest in or claim against the Company or its assets except the right to receive the redemption proceeds deposited (without interest) upon surrender of any document(s) that are required for the purposes of redemption or settlement.
Where the aggregate Net Asset Value of the Company over a period of four consecutive months falls below USD 10,000,000 or currency equivalent, the Company may, by giving four weeks notice to all Shareholders, redeem on the Dealing Day specified in such notice, all of the outstanding Shares of the Company.
a) Redemption due to ineligibility
Shares in the Company may not be offered, sold or held by or for the benefit of any Person in any 30 jurisdiction:-
(i) in which authorisation for such offer or solicitation is required but is not obtained; or (ii) in which the Person making such offer or solicitation is not qualified to do so; or (iii) to any Person to whom it is unlawful to make such offer or solicitation.
Further ownership restrictions may become necessary to reflect changes in the applicable Laws and regulations of any other jurisdiction whose laws may be applicable to the Company.
The Distributor, in the first instance, and, by default, the Investment Manager have the exclusive right to determine conclusively whether any Person or entity is an ineligible investor and any such determination may be made at any time. If it is determined that Shares are beneficially owned by a Person who is not eligible, either alone or in conjunction with any other Person, the Company will, redeem such Shares held by that Person alone or in conjunction with any other Person in AMLFI at the relevant Redemption Price.
b) Redemption in the interests of Shareholders
Where as a result of any enactment, legislation or otherwise, the Board consider it advisable or prudent in the interests of Shareholders to redeem the Shares as a result of any enactment, legislation or otherwise, the Company may, in any such case, at its option, cause all Shares then outstanding to be redeemed, by giving four weeks’ notice to all Shareholders. The redemption will be effected on such Dealing Day as specified in such notice.
c) Redemption for closure
The Board may decide to close AMLFI if such solution is in the best interest of existing Shareholders in the Company. If such a situation occurs, the Board may compulsorily redeem or transfer the outstanding Shares in AMLFI. To require such redemption or transfer, the Board will serve on the Shareholders a notice requiring them to transfer their Shares into another Class Fund or to give redemption requests in respect of such Shares. If the notified Shareholders do not, within 30 days after such notice, transfer their Shares or provide redemption requests in respect thereof, the Shareholders shall be deemed forthwith upon the expiration of such 30 days period to have given proper redemption requests in respect of all their Shares and the Board shall be entitled to appoint any Person to sign on their behalf such documents as may be required for the purposes of such redemptions.
As provided for above, the redemption proceeds of such compulsory redemption will be retained in the redemption account of the Company until the Shareholders concerned have surrendered such documents required for the purposes of redemption or settlement.
7.5 Temporary Suspension of Redemption
The Board or any nominated Person are empowered, subject to all relevant regulatory approval, including the approval of the FSC and the approval of the Listing Executive Committee of the SEM, to temporarily suspend the redemption of Shares at any time for a period not exceeding 30 days and may do so if they have good and sufficient reason to believe that it is in the interests of the Shareholders. This may include that occurrence of any of the following events: (i) when one or more stock exchanges or other markets which provide the basis for valuing any
31 assets of AMLFI are closed other than for or during holidays, or if dealings therein are restricted or suspended or where trading is restricted or suspended in respect of securities forming a substantial part of the AMLFI’s assets;
(ii) when, as a result of political, economic, military or monetary events or any circumstances outside the control, responsibility and power of the Company, disposal of the assets of AMLFI is not reasonably practicable without this being seriously detrimental to the interests of Shareholders, or if, in the opinion of the Board, a fair price cannot be calculated for the assets of AMLFI;
(iii) in the case of a breakdown of the means of communication normally used for the valuing of any asset of AMLFI or if for any reason the value of any asset of AMLFI which is material in relation to the Net Asset Value may not be determined as rapidly and accurately as required; or
(iv) if, as a result of exchange restrictions or other restrictions affecting the transfer of funds, transactions on behalf of AMLFI are rendered impracticable, or if purchases, sales, deposits and withdrawals of any assets of AMLFI cannot be effected at the normal rates of exchange, as determined by the Board.
No issue or redemption of Shares in AMLFI will take place during any period when the calculation of the Net Asset Value is suspended. Payment of redemption proceeds to such Shareholders whose Shares have been redeemed may be withheld prior to such suspension until after the suspension is lifted, such right to be exercised in circumstances where the Board believe that to make such payment during the period of suspension would materially and adversely affect and prejudice the interests of the remaining Shareholders in AMLFI affected by the suspension.
8. TRANSFER AND TRANSMISSION OF SHARES
8.1 Transfer of Shares
(a) All transfers of Shares shall be effected by transfer in writing in any usual or common form in use in Mauritius or in any other form approved by the Board and every form of transfer shall state the full name and address of the transferor and transferee.
(b) The instrument of transfer of Shares shall be signed by or on behalf (provided that an evidence of the authority given to the person signing on behalf of the transferor is submitted to and accepted by the Board) of the transferor. The transferor shall be deemed to remain the holder of the Share until the name is entered in the Register in respect thereof.
(c) Section 87(1) of the Act shall apply to the Company and accordingly the form of the instrument of transfer of the Shares shall be in the form as required by section 24 of the Registration Duty Act of Mauritius, except where the Shares are traded on a securities exchange. Any transfer or documents relating to or affecting the title to any share must be registered without payment of any fee.
(d) The Board may refuse or delay the transfer of any Share to any person whether an existing Shareholder or not, where –
32 (i) The transfer would impose on the transferee a liability to the Company and the transferee has not signed the transfer;
(ii) A holder of any such Share has failed to pay on the due date any amount payable thereon either in terms of the issue thereof or in accordance with the Constitution (including any call made thereon);
(iii) The transferee is a minor or a person of unsound mind;
(iv) The transfer is not accompanied by such proof as the Board reasonably requires of the right of the transferor to make the transfer;
(v) The Board acting in good faith decides in its sole discretion that the transfer would not be in the best interests of the Company and/or any of its Shareholders.
The fully paid Shares shall be free from any restriction on the right of transfer and from all lien. Partly paid Shares which are listed may be subject to restrictions provided that the restrictions are not such as to prevent dealings in the Shares from taking on an open and proper basis.
(e) The Board may, by notice to a Shareholder, at any time request the latter to furnish a declaration as to his residence, in a form satisfactory to the Board
8.2 Transmission of Shares
In the event of the death, insolvency or legal disability of a Shareholder who holds Shares jointly with other Shareholders, the Company will consider the other Shareholder(s) as having title to the interest in the Shares of the deceased, insolvent or disabled Shareholder. The Company shall consider that it is the sole responsibility of the other Shareholder(s) for making good of all moneys payable in respect of the Shares to any third party or rightful claimant(s) who, by Law upon the occurrence of any such event(s) above, has/have legal right(s) in the Shares which were jointly held by the deceased, insolvent or disabled Shareholder.
9. SWITCHES
Shareholders shall be permitted to switch out from AMLFI to other funds. However, the sale and purchase sides of switches shall respectively be considered as redemptions and subscriptions and the conditions and the procedures for redemptions and subscriptions shall apply. Accordingly, the sale and purchase sides of switches may not take place on the same Dealing Day and there may be a lengthy delay between the day on which the switch instruction is received and the day on which the sale proceeds are ultimately invested in the selected Class Fund(s). Once accepted by the Company, switch instructions shall be irrevocable. Shareholders shall not therefore be entitled to withdraw switch instructions once given except at the discretion of the Board or the Investment Manager.
10. DIVIDEND POLICY
(a) A Dividend may be authorised and declared by the Board at such time and such amount (subject to the Solvency Test) as it thinks fit.
33 (b) Dividends may be payable to the holders of the Shares provided the Board shall so determine.
(c) Dividends shall be payable to the holders of Shares in accordance with the following:-
i) The Company in Annual Meeting may from time to time declare Dividends on the Shares (but so that no dividend shall exceed the amount recommended by the Board) and the Board may from time to time if they think fit pay such interim dividends on Shares as appear to the Board to be justified by the profits of the Company.
ii) No Dividend shall be payable except out of such funds as may be lawfully distributed as dividends. The distribution as dividend of surpluses arising from the realisation of investments must be prohibited. iii) The rate of Dividend on the Shares in respect of any financial year of the Company shall be a sum which the Board deem advisable for distribution as divided by the number of Shares entitled to the dividend.
iv) Any Dividend declared shall be distributed at such time or times after being declared as the Board may determine, save that the distribution date shall, in the case of a final dividend, be not more than six months after the date of declaration thereof
(d) No Dividend shall be payable to the holders of Management Shares.
(e) Subject to the rights of Persons, if any Person, entitled to Shares with special rights as to Dividends, all Dividends shall be declared and paid according to the amount paid up on the Shares in respect whereof the Dividend is paid, but no amount paid up on a Share in advance of calls shall be treated for the purpose of this Section as paid up on the Share. All Dividends shall be apportioned and paid proportionately to the amount paid on the Shares in respect of which the Dividend is paid during any part or parts of the period in respect of which the Dividend is paid PROVIDED THAT if any Share is issued on terms providing that it shall rank for Dividend as from or after a particular date, or to a particular extent, such share shall rank for Dividend accordingly. Notwithstanding the above, where applicable, any amount paid up in advance of calls on any Share may carry interest but shall not entitle the holder of the Share to participate in respect thereof in a dividend subsequently declared.
(f) All unclaimed Dividends may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. No Dividend shall bear interest against the Company. The payment by the Board of any unclaimed Dividend or other monies payable on or in respect of a Share into a separate account shall not constitute the Company a trustee in respect thereof and any Dividend unclaimed after a period of six years from the date of declaration of such Dividend, or such period as may be required under the Laws, shall be forfeited and shall revert to the Company.
(g) The Board may deduct from any monies payable to any Shareholder on or in respect of a Share all sums of money (if any) presently payable by him to the Company in relation to the Shares of the Company.
(h) Save as provided to the contrary herein any monies payable on or in respect of a Share shall be expressed in the currency in which such Shares are designated and payment shall be 34 made in such currency, or such other currency as the Board shall determine either generally or in relation to a particular sub-class of Shares or in any specific case.
(i) If several persons are registered as joint holders of any Shares, any one of them may give effectual receipts for any monies payable on or in respect of the Shares.
11. FEES, CHARGES AND EXPENSES
Shareholders must note that the fees, charges and expenses payable by AMLFI may vary from time to time. Prior to any such variation, a four weeks’ notice will be served on the Shareholders detailing the variation and explaining the reason for such variation, and the date on which it comes into effect.
Below is a summary and overview of the costs, charges and expenses that may be incurred by AMLFI.
Directors’ remuneration
(a) The Directors may receive a fixed annual fee for serving in such capacity. The fee will be in accordance with reasonable and customary directors’ fees. The Directors shall be entitled to reimbursement from the Company for all reasonable out of-pocket expenses incurred by them on behalf of the Company. (b) Any Director may also act in a professional capacity as provided for by law and he or his firm will be entitled to be remunerated for such services. (c) There are no service contracts in existence between the Company and any of its Directors in their personal capacity, nor are any such contracts proposed.
Fees of the Administrators
For performing and supervising the performance of corporate and administrative services necessary for the operation and administration of the Company and for acting as Registrar and Transfer Agent, the Administrator will receive a fee in respect of each Class. This fee will be paid at such interval and at such rate as may be agreed between the Registrar and Transfer Agent, the Administrator and the Company from time to time.
The Administrator will also be reimbursed for all reasonable out-of-pocket expenses agreed to in advance with the Company.
Fees of the Investment Manager
For providing investment management services to the Company, the Investment Manager will receive a fee in respect of each Class Fund. This fee will be at such interval and at such rate as may be agreed between the Investment Manager and the Company from time to time.
The Investment Manager will also be reimbursed for all reasonable out-of-pocket expenses agreed to in advance with the Company.
Fees of the Company Secretary For providing the services as a Company Secretary to the Company, the Company Secretary will 35 receive a fee in accordance with the Service Agreement between the Company and the Company Secretary.
The Company Secretary will also be reimbursed for all reasonable out-of-pocket expenses agreed to in advance with the Company.
Fees of the Custodian
For providing the services as a custodian to the Company, the Custodian will receive a fee in respect of each Class Fund. This fee will be paid at such interval or at such rate as may be agreed between the Custodian and the Company from time to time.
Fees and Expenses for Listing
The fees, costs and expenses relating to the listing of AMLF on the SEM are estimated to be a maximum of USD 8,000 as detailed out below:
USD Fees payable to SEM 1,500 Legal Fees: - Drafting of the Listing Particulars and amendment of Constitution 4,000 2,500 - Reviewing of the Listing Particulars and Constitution
Total 8,000
Other Fees and Operating Expenses
The Company bears all other expenses incidental to its operations and business, including (i) fees and charges of custodians, (ii) interest and commitment fees on loans and debit balances, (iii) income taxes, withholding taxes, transfer taxes and other governmental charges and duties, (iv) fees of the Company’s Administrator, legal advisers and independent auditors, (v) Board’ fees and expenses, (vi) the cost of maintaining the Company’s registered office, (vii) the cost of printing and distributing the PPM, these Listing Particulars, any other marketing cost and any subsequent information memorandum or other literature concerning the Company and subscription materials and any reports and notices to Shareholders, (viii) consultant and other services provider expenses deemed desirable in the sole discretion of the Board, (ix) the costs incurred in connection with any listing of the Shares, if such listing is deemed desirable by the Shareholders, (x) the cost of insurance premiums (if any), including, without limitation, the cost of director and officer liability insurance policies, (xi) the Company’s annual Government fees; and (xii) all similar ongoing operational expenses. Each Director of the Company who is not an officer or employee of the Administrator or related companies may receive fees from the Company for serving in such capacity. All Board will receive reimbursement of reasonable travel (provided such travel is undertaken at the request of the Company for the purposes of AMLFI and the costs are agreed in advance with the Company) and other reasonable costs incurred in connection with their services. The other fees and operating expenses referred to above that are identifiable with AMLFI will be charged against AMLFI in computation of its Net Asset Value. Other fees and expenses will be apportioned in such manner as the Board in their discretion deem just and equitable.
36 12. CALCULATION OF NET ASSET VALUE
The Net Asset Value for AMLFI shall be determined on Valuation Days by dividing the value of the total assets of the Company properly allocated AMLFI less the liabilities of the Company properly allocable to AMLFI by the total number of Shares of AMLFI outstanding on any Valuation Day.
The assets of AMLF (or allocated by the Company to AMLFI) as described above shall be deemed to include:
(i) all cash in hand, on loan or on deposit, or on call attributable to AMLFI including any interest accrued thereon;
(ii) all bills, demand notes, promissory notes and accounts receivable;
(iii) all bonds, time notes, shares, stock, debentures, debenture stock subscription rights, warrants, options and other investments and securities owned or contracted for by AMLFI, other than rights and securities issued by it ;
(iv) all stock and cash dividends and cash distributions to be received by AMLFI and not yet received by it but declared payable to stockholders of record on a date on or before the day as of which the Net Asset Value is being determined;
(v) all interest accrued on any interest-bearing securities on behalf of AMLFI except to the extent that the same is included or reflected in the principal value of such security;
(vi) all other investments made on behalf of AMLFI;
(vii) the expenses attributable to AMLFI in so far as the same have not been written off; and
(viii) all other assets attributable to AMLFI of every kind and nature including prepaid expenses as valued and defined from time to time by the Board.
The assets of AMLFI shall be valued by such method of valuation as the Board consider as being appropriate to reflect the fair value of the assets, and without prejudice to the generality of the foregoing, the assets of AMLFI shall be valued as follows:
(i) securities traded on a stock exchange or other regulated market are to be valued generally at the last traded price quoted on the relevant exchange or market;
(ii) unlisted equity securities will be valued initially at cost and thereafter with any reduction or increase in value (as the case may be) as the Board shall in their absolute discretion deem appropriate in the light of the circumstances;
(iii) unlisted securities (other than equities) for which there is an ascertainable market value are to be valued generally at the last known price dealt on the market on which the securities are traded;
(iv) unlisted securities (other than equities) for which there is no ascertainable market value will
37 be valued at cost plus interest (if any) accrued from purchase to (but excluding) the Valuation Day plus or minus the premium or discount (if any) from par value written off over the life of the security;
(v) any value otherwise than in a foreign currency of AMLFI shall be converted into the currency of AMLFI at the market rate (whether official or otherwise) which the Board shall in their absolute discretion deem appropriate to the circumstances having regard inter alia to any premium or discount which they consider may be relevant and to the costs of exchange;
(vi) the value of any cash in hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends and interest accrued and not yet received shall be deemed to be the full amount thereof, unless it is unlikely to be paid or received in full, in which case the value thereof shall be obtained after making such deduction or discount as the Board may consider appropriate to reflect the true value thereof;
(vii) the value of units or shares or other security in any unit trust, mutual fund, investment corporation, or other similar investment vehicle or collective investment scheme shall be derived from the last prices published by the managers thereof, less any exit fees or charges payable upon the sale of units or shares;
(viii) for the purpose of valuing the assets attributable to AMLFI as aforesaid the Board may rely upon the opinions of any persons who appear to them to be competent to value assets of AMLFI by reason of any appropriate professional qualification or of experience of any relevant market.
Notwithstanding the foregoing, where at the time of valuation, any asset of AMLFI has been contracted to be realized the net amount receivable by AMLFI in respect thereof shall be accounted as assets. If such amount is not then known exactly then its value shall be the net amount estimated by the Board as receivable by AMLFI. However, if the estimated amount is not received by AMLF within such time as may be determined by the Board, the latter may make such allowance as they consider appropriate.
The liabilities of AMLFI shall be deemed to include all its liabilities and such provisions and allowances for contingencies (including tax) payable by for the account of AMLFI but not liabilities represented by Shares in AMLFI. In determining the amount of such liabilities the Board may calculate any liabilities of regular or recurring nature on an estimated figure for yearly or other periods in advance and accrue the same in equal proportions over any such period.
The Net Asset Value per share of AMLFI shall be calculated by dividing the Net Asset Value of AMLFI by the number of shares in issue and adjusting the resultant amount downwards to the nearest cent. Any calculations made pursuant to these presents shall be made by or on behalf of the Board and shall (except in the case of manifest error) be binding on all Persons.
For the purposes of this Section:
(i) Subscription monies relating to subscription of shares of AMLFI less any Fiscal and Purchase/Sale Charges (net of any fees and commission) in connection with the issuance of such shares of AMLFI and less any initial charge(s) levied shall be deemed to be an asset of
38 AMLFI as from the date on which such shares are first deemed to be in issue; and
(ii) Redemption proceeds relating to any redemption of shares in AMLFI (or in respect of which the issue is to be cancelled) payable by AMLFI shall from the date on which such shares are deemed to cease to be in issue in accordance with the Constitution, cease to be deemed a liability of AMLFI.
13. TAXATION AND EXCHANGE CONTROL IN MAURITIUS
13.1 Taxation
The taxation of income and capital gains of the Company and of Shareholders is subject to the fiscal laws and practices of Mauritius, countries where investments are envisaged by AMLFI and of the jurisdiction in which Shareholders are resident or otherwise subject to tax. The provisions under any applicable double taxation treaty may also be relevant. The following summary of certain relevant tax provisions is based on current law and practice and does not constitute legal or tax advice. The relevant tax provisions are subject to change.
Prospective investors should consult their own professional advisers on the relevant taxation considerations applicable to acquisition, holding and disposal of Participating Shares and the receipt of distributions. The Company, its Directors, Administrator, the Investment manager, any Investment Advisor, and their advisers accept no responsibility for any loss suffered by any investor as a result of current, or changes in, taxation law and practice.
The Company holds a Category 1 Global Business Licence and as a tax resident is governed by the Income Tax Act 1995 and as per current tax laws shall be taxed at 15% in Mauritius on its net chargeable income. However, the Company will be allowed a credit for foreign tax on its foreign source income against its tax liability. If no written evidence is presented to the Director General of the Mauritius Revenue Authority (MRA) showing the amount of foreign tax charged, the amount of foreign tax will nevertheless be conclusively presumed to be equal to 80 percent of the Mauritius Tax chargeable with respect to that income.
Currently, no capital gains tax is payable in Mauritius in respect of the Company's realised investments. Dividends and redemption proceeds paid by the Company to the Shareholders would be exempt in Mauritius from any withholding tax.
Shareholders
Shareholders will not be subject to any form of Mauritian tax on redemption of Shares and payment of dividend by the Company.
13.2 Exchange Control
Exchange control laws and regulations have been suspended in Mauritius. AMLFI being classes of Shares in a company holding a Category 1 Global Business are not subject to any exchange control restrictions in Mauritius. Any payments made to or by the Company are therefore not restricted by the exchange control regulations.
14. MANAGEMENT AND ADMINISTRATION
39 The management of the business of the Company remains with the Board, which undertakes same in accordance with the provisions of the Act, the Constitution and generally accepted standards of good business practice and corporate governance.
This has brought about the establishment of an Audit, Risk and Corporate Governance Committee, to which the Board has delegated certain of its powers pursuant to the terms of the Constitution. The Board has also delegated powers to a network of service providers as listed above in the Corporate Directory. The role and obligations of each service provider are described in the Listing Particulars.
However for the benefits of the Shareholders of AMLFI, the Investment Manager has appointed an Investment Advisor to ensure that the specific investment objectives of AMLFI are reached.
14.1 Directors
The Board is composed of Directors coming from different sectors of our economy. Every Director has drawn from his professional background and expertise in positively contributing to the Board’s activities. The Board is currently made up of 6 non-executive Directors out of whom 1 is independent as follows:
NAME ADDRESS CATEGORY DATE OF APPOINTMENT Kim Foong 7, Salamat Khan, Chady Independent (Roger) Leung Street, Roches Brunes, 01 June 2007 Shin Cheung Beau Bassin, Mauritius Thierry Hugnin Valandre Street, Coastal Non-Executive Road, Cap Malheureux, 10 April 2008 Mauritius Stephane Henry Campement Non-Executive D’Espagnac, Route 10 April 2008 Royale, Mon Choisy, Triolet, Mauritius Arnaud Leclezio Coastal Road, Opposite Non-Executive Tour Martello, La 10 April 2008 Preneuse, Riviere Noire, Mauritius Christine Sauzier 4, Residence le Non-Executive Belvedere, La Hausse de 25 March 2010 la Louviere Street, Floreal Bishwarnath Royal Road, Roche Non-Executive Bachun Terre, 12 January 2012 Grand Gaube, Mauritius
Mr Henry and Mr Leclézio are also executive directors of IPRO Fund Management Limited, the CIS Manager.
Board Charter
40 The Board is responsible for directing the affairs of the Company in the best interests of its shareholders and in conformity with the applicable legal and regulatory framework and consistent with its Constitution and best governance practices.
Directors’ profile
Mr. Kim Foong (Roger) Leung Shin Cheung Mr. Kim Foong (Roger) Leung Shin Cheung was appointed as Director of the Company on 1 June 2007 and is the Chairman of Audit and Risk Committee of the Company. Mr. Leung is a director of Bank One Limited, The Mauritius Development Investment Trust Limited, Vivo Energy Mauritius Limited and Dolberg Assets Finance Limited.
Mr. Thierry Hugnin Mr. Thierry Hugnin was appointed as Director of the Company on 10 April 2008 and as Chairman on 10 December 2009. After qualifying as Chartered Accountant in England and Wales in 1993, Mr. Hugnin worked in investment banking, both in London and Mauritius. He later joined Blakeney Management, a London-based investment boutique focusing in Africa and the Middle East. Since his return to Mauritius in 2003, he is the Chief Investment Officer of Ciel Investment Limited and Ciel Capital Limited. He is a Director of Sun Resorts Limited.
Mr. Stéphane Henry Mr. Stéphane Henry was appointed as Director on 10 April 2008. Mr. Henry holds a Master in Wealth Management from the University of Clermont-Ferrand (France). Until 2004, Mr. Henry acted as consultant and manager of institutional and private portfolios. He is currently the Managing Director of Investment Professionals Ltd, a leading asset management company in Mauritius.
Mr. Arnaud Leclézio Mr. Arnaud Leclézio was appointed as Director on 10 April 2008. Mr. Leclézio records 24 years of brokerage, administration and fund management experience. He previously worked in Portfolio Administration at Silver Chain Foundation, Australia and was the Assistant Office Manager of Eyres Reed McIntosh Ltd (a brokerage company subsequently bought by CIBC World Markets). He is currently the Chief Operating Officer at Investment Professionals Ltd.
Mrs. Christine Sauzier Mrs. Christine Sauzier was appointed as Director, as a member of the Corporate Governance, Nomination and Remuneration Committee on 25 March 2010 and following the dissolution of the Committee, was appointed as a member of the Audit and Risk Committee on 7 December 2010. Mrs. Sauzier has been practising as an Attorney-at-Law since 1995. She has a Licence en Droit Privé and a LLB. Before joining the CIEL Group in November 2006, she was a partner in a well known local law firm: Etude Lagesse Sauzier, where she acquired a wide experience in civil, commercial and company law matters, advised and represented a number of companies and was involved in many litigation cases in Mauritius. Within the CIEL Group, she has specialised more in corporate and company law and has been involved in several deals as regards investments made by the Group.
Mr. Bishwarnath Bachun Mr. Bishwarnath Bachun was appointed as Director and member of the Audit, Risk and Corporate Governance Committee on 12 January 2012. Mr. Bachun was the co-founder and Managing
41 Director of Halifax since 2005. He is a Fellow of the Chartered Association of Certified Accountants, UK. He has 25 years of experience in banking, auditing and management of companies including administration and set up of Funds. He previously held senior positions at Deutsche Bank in Mauritius and International Financial Services Limited. He is also an Associate Member of the Society of Trust and Estate Practitioners. He is a member of the executive committee of the Association of Trust and Management Companies.
Directorships in listed companies
Director Listed Company
Kim Foong (Roger) Leung Shin The Mauritius Development Investment Cheung Trust Company Limited
Thierry Hugnin Sun Resorts Limited
The Directors are responsible for the management and administration of the Company and for its overall investment policy. They have delegated part of these functions to Service Providers such as the Investment Manager, Administrator, Transfer Agent, Distributor, Company Secretary and Custodian.
Directors Interest in Shares and Share dealings by Directors during the Year 2012/2013
Number of Number of Holdings shares shares Directors Class Fund Direct purchased purchased directly indirectly Kim Foong (Roger) - - - - Leung Shin Cheung Thierry Hugnin - - - - Stéphane Henry IPRO German Property 66.939 (C1) Fund (USD) Arnaud Leclézio - - - - Christine Sauzier IPRO MANAGED (P1) 78.923 - - Bishwarnath Bachun - - - -
None of the directors indirectly holds shares in the Company.
All Directors are entitled to remuneration however, for the year ended 30 June 2012, Messrs. Thierry Hugnin, Stéphane Henry and Arnaud Leclézio waived their entitlement to remuneration as they are representatives of the CIS Manager, CIS Administrator and Distributor. Mrs Christine Sauzier waived her entitlement to remuneration.
14.2 Investment Manager
IPRO Fund Management Ltd. is a public domestic company limited by shares, incorporated under the laws of Mauritius and licensed to act as investment manager as per the provisions of the Securities Act 2005 and Financial Services Act 2007. It was incorporated on 21 May 1997. The 42 share capital of the company is composed of 100,000 (one hundred thousand) no par value ordinary shares.
The registered office of the Investment Manager is at Ciel Corporate Services Ltd, 5th Floor, Ebene Skies, Rue de l’Institut, Ebene, Mauritius.
The Investment Manager's business address is 3rd Floor, Ebene Skies, Rue de l’Institut, Ebene, Mauritius. IPRO Fund Management Ltd. (formerly known as Cirne International Ltd and A.I.M. Offshore Limited) has been appointed to act as Investment Manager to the Company pursuant to the Investment Management Agreement. Under the terms of this agreement, and subject to the overall supervision of the Directors, the Investment Manager will manage Investments of the Company’s assets.
The Investment Manager will implement the investment strategy of AMLFI and will:
(i) identify, analyse and evaluate investment projects; (ii) negotiate the terms and conditions of equity participation, exit strategies and disinvestment; (iii) implement investment and exit decisions; (iv) monitor performance of investments; (v) actively negotiate the terms of acquiring and redeeming holdings in the Company; (vi) prepare periodic reports and statements on the financial performance of the Company; (vii) liaise with the Board and transmit to the Board periodic reports for each Investment;
Mr. Philippe Koch, Head of Fund Management of the Investment Manager, is entitled to take the investment decisions for and on behalf the Investment Manager, subject to the approval of the Board. Mr. Philippe Koch joined IFML in August 2013 as Head of Fund Management. Mr. Koch has over 14 years of experience in the Financial Services Industry. He worked mostly in Sales and Sales- Trading positions for Fixed Income, FX and Derivatives in Germany and Mauritius for banks such as Standard Chartered, JP Morgan and Deutsche Bank. Mr. Koch is a holder of the CFA charter and the FRM designation. He further holds a German Master degree in Business Administration from the University of Applied Sciences, Essen/Germany and has completed a 2 year banking apprenticeship in Germany.
The Investment Manager’s general power to invest assets of AMLFI’s in underlying funds is subject to such general investment objectives, restrictions and practices provided for in sections 4.1, 4.2 and 4.3 above.
The Board of Directors of the Investment Manager is managed by 2 members as follows:
Name Address Date of Appointment Thierry Hugnin Casa Andiamo, Avenue des Lauriers, 26 November 2012 Pointe Aux Canonniers Mauritius Stéphane Henry Royal Road, Mon Choisy, Mauritius 23 March 2005
Even though the directors of the Investment Manager form part of the Board of Directors of the 43 Company, for proper governance, all strategic decisions in the Company are referred to the Audit, Risk and Corporate Governance Committee for approval and subsequently approved by all Board Members of the Company. The Audit, Risk and Corporate Governance Committee consist of 2 Non-Executive Directors and 1 Independent Director.
The Investment Management Agreement may be terminated as of the close of any calendar month upon not less than ninety (90) days' prior written notice by either party.
The Investment Management Agreement contains provisions indemnifying the Investment Manager from liability unless such liability arose, inter alia, from its fraud, negligence or willful default.
14.3 The Investment Advisor
As per the terms of an Investment Advisory Agreement, the Investment Manager has appointed IPRO Botswana (Proprietary) Limited (“IPRO Botswana”) as its Investment Advisor, for the specific purpose of providing additional expertise for the better management of AMLFI.
IPRO Botswana is a Botswana incorporated private company is a subsidiary of Investment Professionals Ltd.
Board composition and role of the Investment Advisor
The Board of Directors of IPRO Botswana is composed as follows:
Directors Capacity Nationality
Mr. Stéphane Henry Non-executive Director. French citizen Mr. Thierry Hugnin Non-executive Director. Mauritian citizen Mr. Amit Bakhirta Executive Director Mauritian citizen Mr. Baatlhodi Molatlegi Non-executive Director Botswana citizen
Under the terms of the Investment Advisory Agreement, the Investment Advisor will provide detailed information to the Investment Manager on the following:
Macro-economic research on sub-Saharan African countries; Analysis of companies in in sub-Saharan African countries; Investment opportunities.
Mr. Amit Bakhirta, is Managing Director of IPRO Botswana and also sits on the investment committee of AMLFI.
Mr. Amit Bakhirta has more 6 years of experience in finance and Investment Banking in the UK, Mauritius and Africa. Amit was previously the fund manager of IPRO growth fund, a diversified Mauritius listed investment fund primarily invested in the Indian Ocean, Asian and African regions. He now heads the Botswana office of the group with an aim to grow IPRO’s presence in the Sub- Saharan Africa region. He has previously been with Afrasia Bank, Mauritius and Lloyds TSB in London, UK and is a holder of an MBA in Finance from UWIC, UK.
14.4 Administrator, Transfer Agent and Registrar 44 Galileo Portfolio Services Limited has been appointed to act as Administrator, Transfer Agent and Registrar of the Company pursuant to the Administration and Transfer Agent Agreements. Under the terms of these agreements, Galileo Portfolio Services Limited will maintain the books and records of the Company's accounts, compute the Net Asset Value and the Net Asset Value per Share and serve as issue and redemption agent. Galileo Portfolio Services Limited is also in charge of maintaining the Register of the Company.
Galileo Portfolio Services Limited has the same registered address and business address as the Investment Manager.
14.5 Distributor
Investment Professionals Ltd (formerly known as Cirne Financial Services Ltd) is licensed under section 14 of the Financial Services Act 2007 to act as Distributor of financial products.
Investment Professionals Ltd has been appointed as Distributor of the Company. The agreement provides that the Distributor shall place on a private placement basis the Shares to local and foreign high net worth individuals or institutional clients. Investment Professionals has the same registered address and business address as the Investment Manager and Administrator/Transfer Agent. Investment Professionals Ltd. holds 100 % (hundred per cent) of the capital of the Investment Manager and Administrator/Transfer Agent.
14.6 Management Company and Secretary
Mauritius International Trust Company Limited has been appointed to act as a management company for and provide secretarial services to the Company. Services include the preparation and filing of reports with respect to the reporting requirements of the Company and AMLFI. Mauritius International Trust Company Limited is licensed by the Financial Services Commission to, inter alia, provide management services to entities holding global business licences.
14.7 Cash Custodian
The Standard Chartered Bank (Mauritius) Limited whose registered office is at 2nd Floor, Ebene House, Left Wing, 33 Cybercity, Ebene, Mauritius (the "Bank") has been appointed to act as Cash Custodian to the Company pursuant to the Cash Custody Agreement (the "Agreement") dated 08 September 2010 between the Bank and the Company. Under the terms of that Agreement, the Bank has been duly appointed and authorized to perform all or any of the following services on behalf of the Company namely:
(i) to hold or arrange for cash to be held;
(ii) to provide such other services as the Bank and the Company may from time to time agree.
In providing such services, the Bank shall:
(i) maintain cash accounts and debit and credit such accounts in accordance with the instructions from such persons who may be authorized by the Company to give such
45 instructions; and
(ii) maintain records which identify such accounts. The Bank is authorized at its discretion, to take such steps as it may consider expedient to enable it to provide the above services and to exercise its powers under the Agreement, including the right to:
(i) comply with any law, regulation, order, directive, notice or request of any government agency (whether or not having the force of law) requiring the Bank to take or refrain from action;
(ii) on behalf of the Company, to withhold and/or make payment of any taxes or duties properly payable on or in respect of the cash.
In performing the above services, the Bank shall exercise the same degree of care as it exercises in respect of its own property except to such extent as may otherwise be provided in the Agreement.
Upon the written request of the Company, the Bank may maintain one or more cash accounts, each such account being designated in such manner so as to distinguish it as a separate account. Upon such additional accounts being established, the Bank shall provide services in relation thereto pursuant to the provisions of the Agreement.
14.8 Custodian
The Standard Chartered Bank (Mauritius) Limited and Standard Chartered bank Limited (Mumbai Branch) of Crescenzo, 3rd Floor, C-38/39, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai 400051, India (both collectively referred to as the ‘Custodians’) have been appointed to act as the Custodian to the Company pursuant to the Novation Agreement dated 08th September 2010 and Global Custody Agreement (the "GC Agreement") dated 10th August 2011 respectively. Under the terms of the said Agreements, the Custodians have been duly appointed and are willing to act as administrative custodian for the Company in relation to certain securities subject to and on the terms set out in the Agreements.
The Company is also entering into a custody agreement with Sarasin Bank & Co. Limited of Elisabethenstrasse 62, 4002 Basel, Switzerland as per the following clauses:
Sarasin Bank & Co. Limited (‘the Custodian’) will not provide advisory services or asset management services nor will it monitor investment management activities or management strategies of the Company. The Custodian will not supervise or control the activities of any investment manager, trustee (or corresponding hierarchical level) or the Administrator of the Company.
The Custodian does neither check nor warrant the contents of the relevant fund-documentation nor will it be involved in the management, administration or net asset value calculation of the Company. The Custodian shall also not be responsible for (i) determining whether a transaction or service is suitable for the Company, (ii) for determining whether a transaction or service is consistent with the Company’s objectives or investment restrictions and is appropriate in light of the Company’s financial circumstances, (iii) for determining the appropriate frequency of transactions executed on the Company’s behalf, (iv) for determining whether a transaction has been authorized by the Company or (v) for disclosing the risks involved in entering into a transaction. Therefore, the
46 Company acknowledges that the Custodian will not be monitoring the Accounts for the purposes of evaluating their composition or the Company’s performance and will not be aware of or monitoring the Company’s overall financial position, investment objectives or investment restrictions.
The Custodian will act as the depository for the Safe Custody Assets to the Company, and therefore, the Custodian does not assume any liability for negligent or willful misconduct of the Company’s Investment Manager, Trustee (or corresponding hierarchical level) or Administrator and potential investors should not rely upon the Custodian in deciding whether or not to invest in the Company.
14.9 Conflict of Interest
The Investment Manager, the Administrator, the Transfer Agent, the Distributor, the Cash and Global Custodian, the Investment Advisor and the Company Secretary have each agreed that they will not, nor will any of their Connected Persons, deal with the Company as beneficial owner on the sale or purchase of Investments to or from the Company, except on a basis approved by the Board from time to time, or without the consent of the Board otherwise deal with the Company as principal. Notwithstanding the foregoing, the Investment Manager, the Administrator, the Transfer Agent, the Distributor, the Cash and Global Custodian, the Investment Advisor and the Company Secretary or any of their Connected Persons may buy, hold and deal in any Investments upon their individual account notwithstanding that similar Investments may be held by the Company, may become the owner of Shares or other securities of the Company (and its Funds) and may hold, dispose or otherwise deal with the same as they think fit and may deal with the Company as agent provided that any such dealings are on terms no less favorable to the Company than could reasonably have been obtained had the dealing been effected with an independent third party and may charge and retain a commission or fee in respect of any such dealing such fee or commission is not in excess of rates commonly payable of such dealings.
The services of the Investment Manager, the Administrator, the Transfer Agent, the Distributor, the Cash Custodian and Custodians, the Investment Advisor and the Company Secretary are not exclusive and each such party is free to render similar services to others so long as the services to be performed by it are not impaired thereby and to retain for its own use and benefit all fees or moneys payable thereby.
14.10 Anti Money Laundering
To ensure compliance with the Financial Intelligence and Anti-Money Laundering Act 2002 and the Code on the Prevention of Money Laundering and Terrorist Financing (“Code”) issued by the FSC, the Administrator will require an applicant for Shares to provide certain information and documents for the purpose of verifying the identity of the applicant, the source of funds and obtain confirmation that the application monies do not represent directly or indirectly, the proceeds of any crime. The request for information may be reduced where an applicant is a regulated financial services business based in Mauritius or in an equivalent jurisdiction (i.e. subject to the supervision of a public authority) or in the case of public companies listed on recognized stock exchanges, as set out in the Code.
In the event of delay or failure by the applicant to produce any information required for verification purposes, the Administrator may refuse to accept the application and the subscription monies relating thereto or may refuse to process a redemption request until proper information has been provided. Investors should note specifically that the Administrator reserves the right to request such
47 information as may be necessary in order to verify the identity of the investor and the owner of the account to which the redemption proceeds will be paid. Redemption proceeds will not be paid to a third party account.
Each applicant for Shares acknowledges that the Administrator shall be held harmless against loss arising as a result of a failure to process or delay in processing an application for Participating Shares or redemption request if such information and documentation as requested by the Administrator has not been provided in full with sufficient detail by the applicant.
The Administrator may, at any time, request such additional information as may be required to comply with the Company’s reporting obligations in Mauritius.
15. ACCOUNTS AND INFORMATION
The Company's financial year ends on 30th June.
Copies of the latest annual report and latest audited accounts of the Company shall be available for inspection by Shareholders on any Business Day during normal office hours (i.e. from 8.00 a.m. to 5.00 p.m.) at the Company’s registered address or at the offices of the Investment Manager and Distributor and such annual reports may be sent to Shareholders upon written request.
The latest half-yearly audited financial statements of the Company approved by the Board on 26 March 2013 is annexed as Appendix 1 to these Listing Particulars
16. CLASS FUND PARTICULARS
Class Fund Particulars form part of the offering documents of the Company (the “Offering Documents”) in respect to a subscription by an applicant for Shares in the Company. The Class Fund Particulars set forth the details of each Class Fund. The details mentioned in the document may change from time to time. Such changes can be done at the discretion of the Board but will not vary any rights applicable to an applicant at the moment of its subscription for Shares in a particular Class Fund. The PPM and Constitution must always be read by the Applicant in conjunction with a Class Fund Particulars prior to subscription for Shares.
17. APPLICATION DOCUMENTS
A set of document, which associated with the PPM and Class Fund Particulars complete the set of Offering Documents given to a prospective investor by the Distributor in order for the prospective investor to proceed with a fully informed placement of the Shares. The prospective investor will be requested to read and complete the Application Documents and produce the required identification and source of funds documentation for registration purposed and processing of his subscription.
18. MATERIAL CONTRACTS
The Company has entered into the following contracts with its service providers:
(i) Service Agreement dated 01st September 2009 with Halifax Management Limited (now Mauritius International Trust Company Limited); (ii)Administration Agreement dated 11th April 2003 with Galileo Portfolio Services Ltd;
48 (iii) Transfer Agent Agreement dated 11th April 2003 with Galileo Portfolio Services Ltd; (iv) Amendment to Transfer Agent Agreement with Galileo Portfolio Services Ltd dated 10th December 2009; (v)Investment Management Agreement dated 20th September 1999 with IPRO Fund Management Ltd; (vi) Amendment to Investment Management Agreement with IPRO Fund Management Ltd dated 10th December 2009; and (vii)Compliance Services Agreement dated 02nd March 2009 with Abax Corporate Services Ltd.; and (viii) First Amendment Agreement with Abax Corporate Services Ltd. dated 10th December 2009; and (ix) Second Amendment Agreement with Abax Corporate Services Ltd. dated 26th March 2010.
19. DOCUMENTS AVAILABLE FOR INSPECTION
All the below documents & the Listing Particulars will be available for inspection at registered address of the Company during the business hours:
(a)the Constitution; (b)the PPM of the Company; (c)the Class Fund Particulars for AMLFI; (d)the application forms in connection with the subscription of Shares; (e)all material contracts set out in Section 18 of these Listing Particulars; and (f) copies of the latest annual reports and the latest audited accounts of the Company.
49 APPENDIX 1 IPRO FUNDS LTD STATEMENT OF FINANCIAL POSITION - SIX MONTHS ENDED DECEMBER 31, 2012
December 31,2012 June 30,2012 Total Management Funds shares Total Total USD USD USD USD ASSETS 5,798,66 5,808,6 Cash and cash equivalents 1 61 4,905,316 55,794,61 55,794,6 Investments in financial assets 0 10 51,223,428 169,02 169,0 Accounts receivable 8 - 28 104,994
61,772,2 Total assets 61,762,299 10,000 99 56,233,738
EQUITY 10,0 Share capital - 10,000 00 10,000
LIABILITIES 277,69 277,6 Accounts payable 2 - 92 355,064
Net assets attributable to holders of 61,484,60 61,484,6 redeemable shares 7 07 55,868,674
61,762,29 61,762,2 Total liabilities 9 - 99 56,223,738
Total equity and liabilities 61,762,299 61,772,299 56,233,738
50 IPRO FUNDS LTD STATEMENT OF COMPREHENSIVE INCOME - SIX MONTHS ENDED DECEMBER 31, 2012
Year Six months ended ended June December 31, 30, 2012 2012 USD USD INVESTMENT INCOME Interest income 55,550 68,953 Dividend income 337,576 442,571 Total investment income 393,126 511,524
EXPENSES Loss on disposal of investments in financial assets (594,519) (4,224,453) Impairment on avaialble-for-sale investments (2,613,652) Management fees (153,791) (232,194) Custodian and administration fees (80,968) (120,004) Auditors' fees (4,000) (6,900) Other operating expenses (90,233) (192,378) Total operating expenses (3,537,163) (4,775,929)
FINANCE COSTS
Gain/(loss) on foreign exchange 99,459 (384,963)
Decrease in net assets attributable to holders of redeemable shares (3,044,578) (4,649,368)
51 IPRO FUNDS LTD STATEMENT OF FINANCIAL POSITION BY CLASS FUNDS AS AT DECEMBER 31, 2012
2012 African African Market African Market Leaders Class (R1) Leaders (I2) Master FUND ASSETS USD USD USD Non-current asset Available-for-sale securities
African Market Leaders - Master USD 8,928,583 5,907,763 242,43 Alteo Limited 4 424,47 Athi River Mining 9 148,92 Bamburi Cement Ltd 7 540,21 Bank of Kigali Ltd 1 158,51 Barclays Bank Kenya 6 301,98 BAT Kenya 2 600,85 Bralirwa RWF 5 834,29 Dangote Cement Ltd 4 732,73 Dangote Sugar 5 72,00 DELTA 0 454,93 East African Breweries 6 758,98 Ecobank Ghana Ltd 6 343,37 Econet wireless 7 425,46 Equity Bank 8 373,47 ETI Nigeria 2 838,02 First Bank of Nigeria 9 455,10 Guaranty Trust Bank 0 147,00 Guinness Nigeria 7 174,74 Kenya Commercial Bank 2 693,92 Letshego Micro Provident Botswana - BWP 8 239,08 MTN Group LTD 4 52 448,68 Mumias Sugar Company Ltd 0 266,93 Nigerian Breweries 1 180,83 Oando 3 945,34 SAPH 1 608,43 Sonatel 8 460,92 Terra Mauricia Ltd 5 263,15 Tullow Oil PLC 5 168,02 UAC of Nigeria Plc 1 714,25 Zambeef Products Plc - ZMK 3 216,66 Zambia Sugar Plc 4 501,08 Zenith Bank Plc 9 13,734,89 8,928,583 2 5,907,763 Current asset 1,684,43 Cash at bank - 2 55,953 17,66 Accounts Receivable 13,365 2 - 1,702,09 13,365 4 55,953
Total assets 8,941,948 15,436,986 5,963,716
LIABILITIES Accounts Payable 45,469 - 2,186
Net assets attributable to holders of redeemable shares 8,896,479 15,436,986 5,961,530
Total liabilities 8,941,948 15,436,986 5,963,716
Net asset value per share, December 31, 2012 USD 135.71 153.79 121.94 130.5 Net asset value per share, June 30, 2012 USD 116.38 1 105.13
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