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IP MANAGEMENT COMPANY (RF) PROPRIETARY LIMITED

ANNUAL REPORT

31 MARCH 2019

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INDEX

Page

Managing Director’s Report 3 Directors’ Statement 4 Trustees Report 5 Independent Auditor’s Report 6 Portfolios 10

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Managing Director’s Report

I am pleased to present the Annual Report for IP Management Company and the IP Collective Investment Scheme for

the year ended 31 March 2019. It is a statutory requirement that each investor receive an abridged copy of the annual

financial statements. Kindly note that performance and other figures reflect the position at the year end of the scheme

and thus may not be the most recent figures available.

The year ending March 2019 saw assets under management end the year at R15.5bn, representing improved market

growth and investor inflows, notwithstanding the ongoing challenges experienced in financial markets. We remain

optimistic for an improved trading environment based on improved political certainty now that elections are behind us.

Our ongoing objective is to provide excellent administration for investors, asset managers and advisors, and we continue

to enhance and streamline our administration processes. During the year, we migrated our investor administration to a

new strategic partner in the form of JTC Fund Solutions RSA, and are pleased to report, that notwithstanding normal

teething issues, the migration was successful, and we look forward to ongoing process improvements and a long

relationship.

Kindly note that investors can access their portfolio details and investment statements via the secure web access portal

on our website: http://www.ipmc.co.za. Please contact our client services team at [email protected] in order to

register. If you have any queries, please don’t hesitate to contact us or consult your Investment Manager or Financial

Advisor.

Thank you for your on-going support. I wish you all the best for the remainder of 2019.

BRETT PATON

MANAGING DIRECTOR

20 JUNE 2019

http://www.ipmc.co.za/

mailto:[email protected]

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SECTION ONE

IP COLLECTIVE INVESTMENT SCHEME PORTFOLIOS

Directors’ Statement

The annual financial statements are the responsibility of the directors of IP Management Company (RF) (Pty) Limited.

The fund financial statements, prepared in accordance with the accounting policies as set out on pages 10 to 13 give a

fair reflection of the Collective Investment Scheme portfolios’ financial position and the results of their operations.

The directors are satisfied that an adequate system of internal control exists and that it is maintained on a continuous

basis to ensure the completeness and the accuracy of the accounting records, to safeguard the assets and to ensure

the integrity and reliability of the financial statements with reasonable assurance. In the directors’ opinion, the Collective

Investment Scheme portfolios are financially sound and will continue to operate as going concerns.

The annual financial statements set out on pages 14 to 70 were approved by the board of directors of the management

company and are signed on their behalf by:

BRETT PATON

MANAGING DIRECTOR

20 JUNE 2019

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Report of the Trustee for the IP Collective Investment Scheme

We, the Standard Bank of South Africa Limited, in our capacity as Trustee of the IP Collective Investment Scheme (“the Scheme”) have prepared a report in terms of Section 70(1)(f) of the Collective Investment Schemes Control Act, 45 of 2002, as amended (“the Act”), for the financial year ended 31 March 2019. In support of our report we have adopted certain processes and procedures that allow us to form a reasonable conclusion on whether the Manager has administered the Scheme in accordance with the Act and the Scheme Deed. As Trustees of the Scheme we are also obliged to in terms of Section 70(3) of the Act to satisfy ourselves that every statement of comprehensive income, statement of financial position or other return prepared by the Manager of the Scheme as required by Section 90 of the Act fairly represents the assets and liabilities, as well as the income and distribution of income, of every portfolio of the Scheme. The Manager is responsible for maintaining the accounting records and preparing the annual financial statements of the Scheme in conformity with Generally Accepted Accounting Principles. This responsibility also includes appointing an external auditor to the Scheme to ensure that the financial statements are properly drawn up so as too fairly represent the financial position of every portfolio of its collective investment scheme are in accordance with Generally Accepted Accounting Principles and in the manner required by the Act. Our enquiry into the administration of the Scheme by the Manager does not cover a review of the annual financial statements and hence we do not provide an opinion thereon. Based on our records, internal processes and procedures we report that nothing has come to our attention that causes us to believe that the accompanying financial statements do not fairly represent the assets and liabilities, as well as the income and distribution of income, of every portfolio of the Scheme administered by the Manager. We confirm that according to the records available to us, no losses were suffered in the portfolios and no investor was prejudiced as a result thereof. We conclude our report by stating that we reasonably believe that the Manager has administered the Scheme in accordance with:

(i) the limitations imposed on the investment and borrowing powers of the manager by this Act;

(ii) and the provisions of this Act and the deed;

Melinda Mostert Seggie Moodley Standard Bank of South Africa Limited Standard Bank of South Africa Limited

14 June 2019

http://search.sabinet.co.za/netlawpdf/netlaw/COLLECTIVE%20INVESTMENT%20SCHEMES%20CONTROL%20ACT.htm#section90

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44003Inception

Benchmark CPI & 2% AS AT 31/03/2019Sector South African - Multi Asset - Low Equity R’000 R’000

Risk Profile Low Assets Income 13,627

Income Declaration Quarterly Non-Current Assets 220,479 Dividends 1,178Investments at Market Value 220,479 Interest 12,868

FUND COMPOSITION Source: GIRSA 31/03/2019 Current Assets 3,277 Other income 1Debtors & Income Accrued 4 Income adjustment due (420)Cash 3,273 to movement of unitsTotal Assets 223,756

Expenses 2,183Equity and Liabilities Service Fees 2,116Capital and Reserves 223,562 Audit Fees 27Current Liabilities 194 Bank Charges 40Accrued expenses 194 Performance fees 0Total Equity and Liabilities 223,756 Other expenses 0

Net Income 11,444AS AT 31/03/2019Retained earnings FUND PERFORMANCE *annualisedBalance at the beginning 3,031 Period Class A BenchmarkDistribution of opening earnings (3,031) 1 year 5.8% 6.2%

INCOME DISTRIBUTION (CPU) Net Income 11,444 3 year* 4.8% 6.8%

Jun-18 Sep-18 Dec-18 Mar-19 Income Distribution (8,716) 5 year* 5.7% 7.0%

Class A 1.62 1.70 1.76 1.72 Undistributed Income at year end 2,728 Since Inception* 12.1% 13.4%

Class B2 1.73 1.81 1.87 1.82 Source: Minimum disclosure document 31/03/2019Capital value of portfolio

PARTICIPATORY INTERESTS Balance at the beginning of year 254,874 FEE ANALYSISUnits ('000) Class A Class B2 Creation and Liquidation (36,338) Service fees (excl VAT)Balance at the beginning of year 15,638 160,346 of participatory interests Class A 1.00%

Creations 819 14,548 Capital profit / (loss) 2,298 Class B2 0.75%

Liquidations (3,811) (36,589) Balance at the end of the year 220,834

Balance at the end of the year 12,646 138,305

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STATEMENT OF CHANGES IN EQUITY

21/11/2005

IP Diversified Income Fund of Funds

STATEMENT OF FINANCIAL POSITION STATEMENT OF COMPREHENSIVE INCOMEFOR THE PERIOD ENDED 31/03/2019

Local Cash

Foreign Cash

Local Bonds

Foreign Bonds

Local Property

Foreign Property

Local Equities

Foreign Equities

44004

Inception

Benchmark CPI & 5% AS AT 31/03/2019Sector South African - Multi Asset - Flexible R’000 R’000

Risk Profile Moderate Assets Income 1,462

Income Declaration Bi-Annual Non-Current Assets 85,930 Dividends 917Investments at Market Value 85,930 Interest 654


Expenses 1,097Equity and Liabilities Service Fees 1,035Capital and Reserves 87,490 Audit Fees 18Current Liabilities 99 Bank Charges 44Accrued expenses 99 Other expenses 0Total Equity and Liabilities 87,589

Net Income 365

AS AT 31/03/2019 FUND PERFORMANCE *annualisedRetained earnings Period Class B2 BenchmarkBalance at the beginning 125 1 year 2.5% 9.4%Distribution of opening earnings (125) 3 year* 1.5% 10.1%

INCOME DISTRIBUTION (CPU) Net Income 365 5 year* 3.3% 10.3%

Sep-18 Mar-19 Income Distribution (423) Since Inception* 15.2% -

Class A1 - - Undistributed Income at year end (58) Source: Minimum disclosure document 31/03/2019

Class B2 1.58 0.23 Capital value of portfolio FEE ANALYSIS

PARTICIPATORY INTERESTS Balance at the beginning of year 105,144 Service fees (excl VAT)

Units ('000) Class A1 Class B2 Creation and Liquidation (20,161) Class A1 1.50%Balance at the beginning of year 10,312 27,494 of participatory interests Class B2 0.75%

Creations 277 2,151 Capital profit / (loss) 2,565



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IP Flexible Fund of Funds

11/02/2005 STATEMENT OF FINANCIAL POSITION STATEMENT OF COMPREHENSIVE INCOMEFOR THE PERIOD ENDED 31/03/2019

Local Cash

Foreign Cash

Local Bonds

Foreign Bonds

Local Property

Foreign Property

Local Equities

Foreign Equities

44005Inception

Benchmark CPI & 3% AS AT 31/03/2019Sector South African - Multi Asset - Medium Equity R’000 R’000

Risk Profile Low to moderate Assets Income 4,900

Income Declaration Bi-Annual Non-Current Assets 122,213 Dividends 819Investments at Market Value 122,213 Interest 4,375



Net Income 3,520

AS AT 31/03/2019 FUND PERFORMANCE *annualisedRetained earnings Period Class B2 BenchmarkBalance at the beginning 1,749 1 year 4.7% 7.3%Distribution of opening earnings (1,749) 3 year* 2.8% 7.9%

INCOME DISTRIBUTION (CPU) Net Income 3,520 5 year* - -

Sep-18 Mar-19 Income Distribution (1,830) Since Inception* 14.2% 16.1%

Class A1 2.29 2.29 Undistributed Income at year end 1,690 Source: Minimum disclosure document 31/03/2019

Class B2 3.27 3.25 Capital value of portfolio FEE ANALYSIS

PARTICIPATORY INTERESTS Balance at the beginning of year 146,818 Service fees (excl VAT)

Units ('000) Class A1 Class B2 Creation and Liquidation (27,495) Class A1 1.50%Balance at the beginning of year 10,790 56,288 of participatory interests Class B2 0.75%

Creations 306 4,469 Capital profit / (loss) 3,379



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IP Prudential Fund of Funds


Local Cash

Foreign Cash

Local Bonds

Foreign Bonds

Local Property

Foreign Property

Local Equities

Foreign Equities

Other

44006

Inception

Benchmark CPI & 6% AS AT 31/03/2019Sector Worldwide - Multi Asset - Flexible R’000 R’000

Risk Profile Moderate to High Assets Income 3,241

Income Declaration Bi-Annual Non-Current Assets 241,618 Dividends 2,063Investments at Market Value 241,618 Interest 1,285



Net Income 868AS AT 31/03/2019Retained earnings FUND PERFORMANCE *annualisedBalance at the beginning (352) Period Class B2 BenchmarkDistribution of opening earnings 0 1 year 3.6% 10.5%

INCOME DISTRIBUTION (CPU) Net Income 868 3 year* 1.8% 11.2%

Sep-18 Mar-19 Income Distribution (764) 5 year* 5.0% 11.4%

Class A1 0.02 - Undistributed Income at year end (248) Since Inception* 11.4% 15.1%

Class B2 0.70 - Source: Minimum disclosure document 31/03/2019Capital value of portfolio

PARTICIPATORY INTERESTS Balance at the beginning of year 289,010 FEE ANALYSISUnits ('000) Class A1 Class B2 Creation and Liquidation (55,016) Service fees (excl VAT)Balance at the beginning of year 5,251 124,055 of participatory interests Class A1 1.00%

Creations 140 5,509 Capital profit / (loss) 9,219 Class B2 0.75%



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IP Worldwide Flexible Fund of Funds


Local Cash

Foreign Cash

Local Bonds

Foreign Bonds

Local Property

Foreign Property

Local Equities

Foreign Equities

Other

44008

Inception

Benchmark STeFI AS AT 31/03/2019Sector South African - Interest Bearing - Short Term R’000 R’000

Risk Profile Low Assets Income 14,291

Income Declaration Quarterly Non-Current Assets 187,536 Dividends 0Investments at Market Value 187,536 Interest 14,343

FUND COMPOSITION Source: GIRSA 31/03/2019 Current Assets 2,590 Other income 0Debtors & Income Accrued 1,905 Income adjustment due (52)Cash 685 to movement of unitsTotal Assets 190,126


Net Income 13,020

AS AT 31/03/2019 FUND PERFORMANCE *annualisedRetained earnings Period Class A BenchmarkBalance at the beginning 3,154 1 year 7.6% 7.3%Distribution of opening earnings (3,154) 3 year* 8.1% 7.4%

INCOME DISTRIBUTION (CPU) Net Income 13,020 5 year* - -

Jun-18 Sep-18 Dec-18 Mar-19 Income Distribution (9,546) Since Inception* 7.1% 6.5%

Class A 1.88 1.94 1.98 1.83 Undistributed Income at year end 3,474 Source: Minimum disclosure document 31/03/2019

PARTICIPATORY INTERESTS Capital value of portfolio FEE ANALYSISUnits ('000) Class A Balance at the beginning of year 164,448 Service fees (excl VAT)

Balance at the beginning of year 163,561 Creation and Liquidation 22,411 Class A 0.60%Creations 60,264 of participatory interests

Liquidations (37,949) Capital profit / (loss) (348)

Balance at the end of the year 185,876 Balance at the end of the year 186,511

#N/A

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IP Interest Plus Fund


Local Cash

Local Bonds

Foreign Bonds

44013Inception

Benchmark 3 month US$ Libor +4% AS AT 31/03/2019Sector Global - Multi Asset - Flexible R’000 R’000

Risk Profile Moderate to High Assets Income (106)

Income Declaration Bi-Annual Non-Current Assets 70,218 Dividends 0Investments at Market Value 70,218 Interest 38

FUND COMPOSITION Source: GIRSA 31/03/2019 Current Assets 244 Other income 0Debtors & Income Accrued 1 Income adjustment due (144)Cash 243 to movement of unitsTotal Assets 70,462

Expenses 361Equity and Liabilities Service Fees 299Capital and Reserves 70,416 Audit Fees 19Current Liabilities 46 Bank Charges 43Accrued expenses 46 Other expenses 0Total Equity and Liabilities 70,462

Net Income (467)

AS AT 31/03/2019 FUND PERFORMANCE *annualisedRetained earnings Period Class A1 BenchmarkBalance at the beginning (2,936) 1 year 16.3% 30.6%Distribution of opening earnings 0 3 year* 2.3% 5.3%

INCOME DISTRIBUTION (CPU) Net Income (467) 5 year* - -

Sep-18 Mar-19 Income Distribution 0 Since Inception* 10.9% 13.6%

Class A1 - - Undistributed Income at year end (3,403) Source: Minimum disclosure document 31/03/2019

PARTICIPATORY INTERESTS Capital value of portfolio FEE ANALYSISUnits ('000) Class A1 Balance at the beginning of year 60,870 Service fees (excl VAT)

Balance at the beginning of year 22,287 Creation and Liquidation 2,832 Class A1 0.40%Creations 3,879 of participatory interests

Liquidations (2,865) Capital profit / (loss) 10,117


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01/11/2011

IP Foreign Flexible Feeder Fund


Foreign Cash

Foreign Bonds

Foreign Property

Foreign Equities

Other

44124Inception

Benchmark Average of Multi - Asset High Equity Category AS AT 31/03/2019Sector South African - Multi Asset - High Equity R’000 R’000

Risk Profile Moderate to High Assets Income 21

Income Declaration Bi-Annual Non-Current Assets 0 Dividends 0Investments at Market Value 0 Interest 21

FUND COMPOSITION Source: GIRSA 31/03/2019 Current Assets 1,014 Other income 0Debtors & Income Accrued 4 Income adjustment due 0Cash 1,010 to movement of unitsTotal Assets 1,014

Expenses 15Equity and Liabilities Service Fees 1Capital and Reserves 1,006 Audit Fees 8Current Liabilities 8 Bank Charges 6Accrued expenses 0 Performance fees 0Total Equity and Liabilities 1,014 Other expenses 0

Net Income 6AS AT 31/03/2019Retained earnings FUND PERFORMANCEBalance at the beginning 0 Not Applicable -Distribution of opening earnings 0

INCOME DISTRIBUTION (CPU) Net Income 6

Mar-19 Income Distribution 0

Class B 0 Undistributed Income at year end 6

Capital value of portfolio FEE ANALYSISPARTICIPATORY INTERESTS Balance at the beginning of year 0 Service fees (excl VAT)

Units ('000) Class B Creation and Liquidation 1,000 Class B 1.00%Balance at the beginning of year 0 of participatory interests

Creations 1,000 Capital profit / (loss) 0 Discounted Service Fees may apply

Liquidations 0 Balance at the end of the year 1,000

Balance at the end of the year 1,000

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The fund's inception date is 1 December 2018, and performance may only be published after one rolling year


IP ESG Balanced Fund


Local Cash

44019

Inception

Benchmark Capped All Share Index (J303) AS AT 31/03/2019Sector South African - Equity - General R’000 R’000

Risk Profile High Assets Income 6,592

Income Declaration Annual Non-Current Assets 142,771 Dividends 6,575Investments at Market Value 142,771 Interest 246



Net Income 5,001AS AT 31/03/2019Retained earnings FUND PERFORMANCE *annualisedBalance at the beginning 3,023 Period Class A BenchmarkDistribution of opening earnings (3,023) 1 year -6.2% 3.5%

INCOME DISTRIBUTION (CPU) Net Income 5,001 3 year* 0.3% 5.0%

Mar-19 Income Distribution (10) 5 year* n/a n/a

Class A 4.35 Undistributed Income at year end 4,991 Since Inception* 6.8% 9.5%

Class B 4.11 Source: Minimum disclosure document 31/03/2019

Class C 4.49 Capital value of portfolio

###### ###### Balance at the beginning of year 186,896 FEE ANALYSISPARTICIPATORY INTERESTS Creation and Liquidation (29,060) Service fees (excl VAT)Units ('000) Class A Class B Class C of participatory interests Class A 0.75%

Balance at the beginning of year 135,174 1 1,473 Capital profit / (loss) (15,526) Class B 1.00%

Creations 17,219 0 256 Balance at the end of the year 142,310 Class C 0.75%

Liquidations (38,656) 0 (553) Performance fees (Class A and B only)

Balance at the end of the year 113,737 1 1,176

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20% of outperformance of the benchmark capped at 1.25% p.a


05/12/2012

IP High Conviction Equity Fund


Local Cash

Local Equities

44030Inception

Benchmark AS AT 31/03/2019

R’000 R’000Sector South African - Multi Asset - High Equity Assets Income 4,906Risk Profile Moderate to High Non-Current Assets 211,946 Dividends 2,153Income Declaration Bi-Annual Investments at Market Value 211,946 Interest 2,308

Current Assets 23,320 Other Income 38

FUND COMPOSITION Source: GIRSA 31/03/2019 Debtors & Income Accrued 6,724 Rebate Income 0Cash 16,596 Income adjustment due 407

Total Assets 235,266 to movement of units

Equity and Liabilities Expenses 1,040Capital and Reserves 226,341 Service Fees 825Current Liabilities 8,925 Audit Fees 29Accrued expenses 8,925 Bank Charges 69Total Equity and Liabilities 235,266 Other expenses 19

Rebates 98

Net Income 3,866AS AT 31/03/2019Retained earnings FUND PERFORMANCE *annualisedBalance at the beginning 1,333 Period Class A BenchmarkDistribution of opening earnings (1,333) 1 year 8.4% 9.4%

Income DISTRIBUTION (CPU) Net Income 3,866 3 year* 3.9% 10.1%

Sep-18 Mar-19 Income Distribution (1,483) 5 year* 5.3% 10.3%

Class A 9.69 12.63 Undistributed Income at year end 2,383 Since Inception* 5.3% 10.5%

Source: Minimum disclosure document 31/03/2019

PARTICIPATORY INTERESTS Capital value of portfolio

Units ('000) Class A Balance at the beginning of year 157,187 FEE ANALYSISBalance at the beginning of year 14,068 Creation and Liquidation 55,474 Service fees (excl VAT)Creations 6,983 of participatory interests Class A 0.40%

Liquidations (2,202) Capital profit / (loss) 11,296


#N/A

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IP Active Beta Fund

25/02/2014 STATEMENT OF FINANCIAL POSITION STATEMENT OF COMPREHENSIVE INCOMEFOR THE PERIOD ENDED 31/03/201955% SWIX; 17% MSCI WI; 12.5% ALBI; 7.5% JSE

SA Listed Prop; 2% CWGBI; 6% 3 month JIBAR

Local Cash

Foreign Cash

Local Bonds

Local Property

Foreign Property

Local Equities

Foreign Equities

Other

44052

Inception

Benchmark CPI & 5% AS AT 31/03/2019Sector South African - Multi Asset - High Equity R’000 R’000

Risk Profile Moderate to High Assets Income 4,066

Income Declaration Bi-Annual Non-Current Assets 171,580 Dividends 2,128Investments at Market Value 171,580 Interest 2,084

FUND COMPOSITION Source: GIRSA 31/03/2019 Current Assets 3,453 Other income 17Debtors & Income Accrued 1,756 Income adjustment due (163)Cash 1,697 to movement of unitsTotal Assets 175,033

Expenses 1,454Equity and Liabilities Service Fees 1,353Capital and Reserves 173,090 Audit Fees 34Current Liabilities 1,943 Bank Charges 63Accrued expenses 1,943 Other expenses 4Total Equity and Liabilities 175,033

Net Income 2,612

AS AT 31/03/2019 FUND PERFORMANCE *annualisedRetained earnings Period Class A BenchmarkBalance at the beginning 1,165 1 year 4.3% 9.4%Distribution of opening earnings (1,165) 3 year* 3.2% 10.1%

INCOME DISTRIBUTION (CPU) Net Income 2,612 5 year* n/a n/a

Sep-18 Mar-19 Income Distribution (1,567) Since Inception* 3.4% 10.2%

Class A 1.10 0.80 Undistributed Income at year end 1,045 Source: Minimum disclosure document 31/03/2019

PARTICIPATORY INTERESTS Capital value of portfolio FEE ANALYSISUnits ('000) Class A Class B Balance at the beginning of year 192,137 Service fees (excl VAT)

Balance at the beginning of year 137,507 47,205 Creation and Liquidation (25,366) Class A 0.75%Creations 7,238 8,413 of participatory interests Class B 0.40%

Liquidations (33,871) (5,660) Capital profit / (loss) 5,274

Balance at the end of the year 110,874 49,958 Balance at the end of the year 172,045

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IP Prudential Equity Fund


Local Cash

Foreign Cash

Local Bonds

Local Property

Foreign Property

Local Equities

Foreign Equities

Other

CONTACT DETAILS

IP MANAGEMENT COMPANY

Physical: 1st Floor, Mariendahl House Newlands on Main Main Road Newlands 7700

Postal: PO Box 23271

Claremont 7735

Telephone: 021 673 1340 Fax: 086 557 4848 Email: [email protected]

MITONOPTIMAL ASSET MANAGEMENT

Physical: Great Westerford, Suite 202 2nd Floor, South Wing 240 Main Road, Rondebosch 7700

Postal: PO Box 144 Rondebosch 7701

Telephone: 021 689 3579 Fax: 021 685 6944 Email: [email protected]

Copies of the audited Annual Financial Statements of IP Management Company and all the portfolios of the IP Collective Investment Scheme are available, free of charge, on request. This abridged report only includes the abridged financial statements for the specific portfolios in which you are invested. For the latest terms and conditions applicable to your investment, kindly consult the most recent application form.



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