AFC FUND (NON–US) January 2016

Fund Category Iraq Public Equities Investment Objective Achieve long-term capital appreciation by investing in a diversified portfolio of listed Iraq Country Focus Iraq equities as well as foreign listed companies that derive the majority of their business from Iraq. Monthly at NAV (five business Subscriptions days before month end) Fund Information Monthly at NAV AFC Iraq Fund Class D shares returned −9.7% in January 2016, this was an outperformance Redemptions 90 days notice for Class D, against the Rabee RSISX USD Index (RSISUSD) which returned −13.7% in USD terms. The 180 days notice for Class E. fund has outperformed the RSISUSD by +2.6% since inception. Benchmark Rabee USD Index The Iraq Exchange (ISX)’s dismal January performance played out across the oil Fund Manager Thomas Hugger producing countries of Saudi Arabia, Kuwait, Qatar and the UAE which dived with the collapse in Oil prices in perfect harmony. Brent bottomed on 20th January, -27% for the year, Chief Investment Ahmed Tabaqchali while the markets bottomed a day later with Iraq (as measured by the RSISUSD) -15%, Kuwait Officer -12%, Dubai -16%, Qatar -15% and Saudi Arabia -21% as measured by local Asia Frontier Capital (Iraq) Ltd., Investment Manager indices. All markets recovered somewhat by month end again in-line with the recovery in oil Cayman Islands prices. Asia Frontier Investments Ltd., Investment Advisor No stock was spared during the month with all RSISUSD components contributing a share of the −13.7% decline with Investment Bank of Iraq −23.5%, Mosul Bank −16.0%, Mamoura Fund Base Currency USD Real Estate −14.6% and heavy weights Bank of Baghdad & Gulf Commercial Bank each down Minimum Investment USD 10,000 −13.7%. Relative outperformers were Baghdad Soft Drinks −7.2% and Asiacell −5.5%. The RSISUSD’s decline of −13.7% comes on the back of the declines of −22.7% in 2015 and Subsequent Investments USD 1,000 −25.4% in 2014 for a total of −50.2% over the period, putting the market in deep bear market Class D - 1.8% p.a. of NAV Management Fee territory. The declines were kicked-off by violence ahead of the parliamentary elections in Class E - 1.5% p.a. of NAV April 2014, intensified by the ISIS occupation of a third of the country in June 2014, prolonged Class D: 18% p.a. of NAV by the double whammy of the high cost of war and lower oil prices in 2015, and finally by the appreciation with high exaggerated fears that led to the oil price collapse in January 2016. Current levels are watermark Performance Fee exceptionally attractive as the market should start to discount the prospects of recovery with Class E: 15% p.a. of NAV the roll-back of ISIS, the positives of Iran’s re-connection with the world and at home appreciation with high corporate earnings reported so far for 2015 are showing promise for the strong & well placed watermark companies. Fund Domicile Cayman Islands The oil price collapse triggered fears for the health of the strained government budget with Launch Date 26 June 2015 various rumors making the rounds, from the failure of the government to make salary payments to the health of the banking system. Together they worsened the ISX liquidity strains of the last Custodian Iraq Depository Centre (IDC) few months, while net foreign inflows, as measured by proxy portfolio flows, reversed the December recovery and added to the declines of the later months of 2015. Auditor Ernst & Young, Hong Kong Within this tough environment the stronger companies continue to show the disparity between Administrator Custom House, Singapore perceived risk in Iraq, which is significantly higher than the actual risk, high as it is: For 2015 Baghdad Soft Drinks reported growth in revenues and operating profits of 14% & 60%, while Legal Advisor Ogier, Hong Kong Mansour Bank reported reported growth and pre-tax profits 14% & 18%. st Contact Information As of 31 January 2016, the AFC Iraq Fund was invested in 14 shares and held 1.2% in cash. As the fund invests in both local and foreign listed companies that have the majority of their business activities in Iraq, the countries with the largest asset allocation were Iraq (94.1%), Asia Frontier Capital Ltd. Norway (4.3%), and the UK (1.6%). The sectors with the largest allocation of assets were www.asiafrontiercapital.com financials (45.3%) and consumer staples (27.7%). The estimated weighted average trailing portfolio P/E ratio (only companies with profit) was 15.96x, the estimated weighted average Mr. Thomas Hugger P/B ratio was 1.18x, and the estimated portfolio dividend yield was 0.75%. CEO, Asia Frontier Capital Ltd. Tel: +852 3904 1015, Fax: +852 3904 1017 [email protected]

Mr. Peter de Vries Marketing Director , Asia Frontier Capital Ltd. Tel: +852 3904 1079, Fax: +852 3904 1017 [email protected]

Registered Office: c/o Elian Fiduciary Services (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman, KY1-9007, Cayman Islands

Hong Kong Office: Asia Frontier Investments Limited 1208, 12th Floor, Loon Kee Building 267-275 Des Voeux Road Central Hong Kong

AFC IRAQ FUND (NON–US) January 2016

Country Allocation Sector Allocation

100% 94.1% 50% 45.3% 90% 45% 80% 40% 70% 35% 60% 30% 27.7% 50% 25% 40% 20% 15% 30% 10.7% 9.3% 10% 20% 5.8% 10% 4.3% 5% 1.6% 1.2% 0% 0%

Monthly Performances AFC Iraq Fund (non-US) Class D Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD

2015 USD +0.00% −7.92% −5.20% −2.20% −7.00% −3.39% +0.56% −22.86% 2016 USD −9.71% −9.71%

Monthly Performances AFC Iraq Fund (non-US) Class E Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD

2015 USD +0.00% −7.89% −5.17% −2.18% −6.98% −3.37% +0.59% −22.74% 2016 USD −9.69% −9.69%

NAV as of 31st January 2016 Class D Class E NAV 696.50 697.72 Since Inception −30.35% −30.23% Inception Date 26/06/2015 26/06/2015

Security Numbers Class D Class E ISIN KYG0133A1756 KYG0133A1830 CUSIP G0133A175 G0133A183 Bloomberg AFIRNUD KY AFIRNUE KY Valoren 28570227 28881954

*The representative of the Fund in Switzerland is Hugo Fund Services SA, 6 Cours de Rive, 1204 Geneva. The distribution of Shares in Switzerland must exclusively be made to qualified . The place of performance and jurisdiction for Shares in the Fund distributed in Switzerland are at the registered office of the Representative. *Asia Frontier Capital manages funds for both US investors and non-US investors. This fund is for non-US investors only. If you are a US , please refer to the fact sheet for the fund called “AFC Iraq Fund”. By accessing information contained herein, users are deemed to be representing and warranting that they are either a Hong Kong Professional Investor or are observing the applicable laws and regulations of their relevant jurisdictions. DISCLAIMER Investments in equities in Iraq are subject to market risk, idiosyncratic risk, liquidity risk, and currency exchange rate risk. The fund may use financial derivative instruments as a part of the investment process. This document does not constitute an offer to sell, or a solicitation of an offer to buy shares in AFC Iraq Fund (non-US). We will not make such offer or solicitation prior to the delivery of an offering memorandum, the operating agreement or articles of association, a subscription booklet, and other materials relating to the matters herein. Before making an investment decision, we advise potential investors to read these materials carefully and to consult with their tax, legal, and financial advisors. The materials have not been reviewed by the regulatory authority of any jurisdiction. Investment is open only to accredited investors as defined by the relevant legal jurisdiction of residence and/or nationality. We have compiled this information from sources we believe to be reliable, but we cannot guarantee its accuracy. We present our opinions without warranty. Past performance is no guarantee of future results. © 2016 Asia Frontier Capital Limited. All rights reserved.