PRESENTATION TO STANDING COMMITTEE ON FINANCE

17 NOVEMBER 2009

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Non – Executive Board Members

Mr. Nhlanhla Nene Chairman

Ms. Ntombifuthi Mtoba Chairman: Investment Committee

Mr. Zakhele Sithole Chairman: HR & Remuneration Committee

Mr. Veli Ntombela Member: Investment Committee and Audit and Risk Committee

Management

Mr. Brian Molefe CEO, PIC

Dr. Daniel Matjila CIO, PIC

Ms. Albertinah Kekana COO, PIC

PIC ATTENDEES

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CONTENT

Organisational Overview Overview of PIC’s performance

Review of performance of PIC Operations

Review of performance of subsidiaries

Review of performance of Assets Under Management

ORGANISATIONAL OVERVIEW

5

PIC Structure

Public Investment Corporation Limited

Advent Asset Management (Advent)

Harith Fund Managers (Harith)

Government

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PIC

PIC was established as a corporation on 1 April 2005 in accordance with the Public Investment Corporation Act, 2004.

In the four years since its corporatisation PIC has been successful in restructuring its investment activities and operations in a manner comparable to that of private sector investment managers.

Apart from pursuing FSB-compliant mandates, PIC

benchmarks its investment performance against market driven indices, enabling its clients and shareholder to compare PIC’s returns to those achieved in the marketplace.

PIC is a long-term investor that seeks consistent returns for its clients.

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Overview of PIC clients

PIC’s clients are 35 public sector pension, provident, social security, development and guardian funds in South Africa.

Collectively, the assets under PIC management as at 31 March 2009 were R739,7 billion.

GEPF is PIC’s largest client and as at 31 March 2009 had entrusted assets worth R659 billion to the Corporation.

TOP FIVE PORTFOLIO’S % Assets under

Management

GOVERNMENT EMPLOYEE PENSION FUND (GEPF) 89.2%

UNEMPLOYMENT INSURANCE FUND (UIF) 4.9%

COMPENSATION COMMISSIONER:PENSION FUND (CC:PF) 1.4%

COMPENSATION COMMISSIONER (CC) 1.3%

ASSOCIATED INSTITUTION PENSION FUND (AIPF) 1.6%

Other* 1.6%

Total 100%

* Constitutes a number of smaller clients

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ADVENT

Advent Asset Management is a property asset management subsidiary owned 100% by the PIC. It focuses on retail property investments in townships and rural areas.

During 2008 PIC Acquired 100% of Advent Asset Management, up from the original 60% shareholding.

The main business of Advent is to manage the Community Property Fund (CPF), which has invested over R2.5 billion in townships and rural areas on behalf of the GEPF and other investors.

These investments in townships and rural properties not only

contribute to socio-economic transformation in the country, but also meet the performance requirements of CPF clients.

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Growth of Assets under management

-R 100

R 200

R 500

R 800

R 1,100

R 1,400

R 1,700

R 2,000

R 2,300

R 2,600

R 2,900

R 3,200

R 3,500

Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09

Mil

lio

ns

Asset Management

Property Management

The value of assets under management increased to R2.5 billion as at 31 March 2009 from R1,96 billion as at 31 March 2008.

Increase is due to the purchase of seven retail centres in Gauteng, Mafikeng and Limpopo.

Growth of Assets under Management

Advent Asset Management

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HARITH

Harith is the inaugural fund manager appointed to manage the Pan African Infrastructure Development Fund (PAIDF).

PAIDF, was established in 2007 for investments in infrastructure development projects on the African continent.

The PAIDF was named Infrastructure fund of the year at the 2009 Africa Investor Awards.

Listed below are the investors and their commitments in PAIDF:

Investor Amount committedGEPF $ 250 mABSA Capital $ 125 mDBSA $ 100 mAfDB $ 50 mOMIGSA $ 50 mStandard Bank $ 15 mLife $ 15 mMetropolitan $ 10 mSSNIT (Ghana) $ 10 mTotal $ 625 m

REVIEW OF PERFORMANCE OF PIC OPERATIONS

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Highlights of the year

In 2008/09 PIC was named:

African Institutional Investor of the Year at the 2008 Africa Investor Awards.

Empowerment Leader of the Year at the Wits Business School/Barloworld Empowerment Leadership Awards.

Best Asset Management Trading Team at the 2009 JSE Spire Awards.

Ms. N Maila received the Rising Star award and Ms. N Radebe received the Five Star Woman award of the Women’s Property Network.

Corporate Governance - PIC together with University of Stellenbosch and other leading Corporate Governance institutions, developed a unique matrix mechanism to rate the triple bottom line performance of listed companies.

Strengthened risk management through the establishment of a unit to focus on operational risk management.

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Highlights of the year Acquired 100% of Advent Asset Management, up from the original 60%

shareholding.

Increased staff complement from 105 in 2007/8 to 160 in 2008/9.

PIC graduate/internship programme entered its 3rd year strengthened through introduction of TOPP programme

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Financial Sustainability

Revenue increased by 12% from March 08 to March 09.

Operating expenses increased by 35% (2008:34%).

driven by increased staff and IT costs.

Net profit after tax amounted to R158 million (2008: R163 million), 3% lower than in the previous period.

Going forward it is expected that the Net profit will decline as PIC builds up its operations.

PIC Advent Harith Consolidated

Revenue R254 million R36 million R100 million R390 million

Operating Expenses

R156 million R12 million R 57 million R211 million

Net profit after tax

R109 million R16 million R 36 million R158 million

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Advent Financial Sustainability

The revenue for Advent year on year remained constant.

Operating expenses increased by 41% (2008:86%).

driven by increased staff costs.

Net profit after tax amounted to R16 million (2008: R18 million), 11% lower than in the previous period.

due to increase in capacity to manage the growing portfolio

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Harith Financial Sustainability

The revenue for Harith increased by 20% (cannot be compared to prior year as Harith was established on 1 September 2007).

Operating expenses increased by 54% (cannot be compared to prior year as Harith was established on 1 September 2007).

Net profit after tax amounted to R36 million (2008: R34 million), 6% more than the previous period.

Post year end, PIC entered into a transaction to restructure its shareholding in Harith.

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Employment Equity at the PIC

PIC is one of the most transformed asset management companies in the country

72% of our employees are black and 56% are women.

Executive management is 100% black and 60% are women.

REVIEW OF PERFORMANCE OF ASSETS UNDER MANAGEMENT

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CONTENT

Growth in Assets Under Management (AUM)

Performance

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Highlights of the year Along with the rest of the asset management community, PIC had a

challenging year in the 12 months to 31 March 2009.

Assets under management declined from R786,8billion to R739,7 billion or 5,98%.

Equities tender awarded to 16 external asset managers including 4 upcoming/developing BEE managers.

Supporting economic transformation - Isibaya fund grew by 23% to R30,98 billion.

Property portfolio grew 25,64% in value ending the year at R23,4 billion.

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Growth in Assets Under Management

31-Mar-03 31-Mar-04 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09

308 377 461 598 719 786 739

  18.3% 18.2% 22.9% 16.8% 8.5% -5.98%

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Percentage of Assets Under Management

Equities accounted for more than 10% of the decline in AUM as a result of the global recession.

31 March 2008 31 March 2009 YoY CHANGE

Asset Class R' bn

% Asset Under

Management R' bn% Asset Under Management R' bn % AUM

CAPITAL MARKET 257.4 33% 270.5 37% 13.1 1.66%

EQUITY 372.1 47% 289.9 39% -82.2 -10.45%

MONEY MARKET 75.3 10% 101.2 14% 25.9 3.29%

STRUCTURED PRODUCTS 18.2 2% 7.3 1% -10.9 -1.39%

ISIBAYA 27.5 3% 31.0 4% 3.5 0.44%

CASH 19.4 2% 16.6 2% -2.8 -0.36%

PROPERTY 16.9 2% 23.4 3% 6.5 0.82%

TOTAL 786.8 100.00% 739.7 100.00% -47.1 -5.98%

PERFORMANCE

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Performance of key client portfolios

PIC’s top four clients account for 97% of the total assets under management, these clients are:

Government Employees Pension Fund (GEPF).

Unemployment Insurance Fund (UIF).

Compensation Commissioner Fund (CC).

Compensation Commissioner Pension Fund (CP).

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Market Performance as at 31 March 2009 (%)

PERFORMANCE BENCHMARKS & MARKET INDICES

60.00

70.00

80.00

90.00

100.00

110.00

120.00

130.00

Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09

SWIX SWIX40 ALL BOND CASH & MONEY MARKET Risk Frre Rate+5% CPI LISTED PROPERTY

Performance 31 Mar 2008 to 31 Mar 2009

SWIX SWIX40 ALL BOND CASH & MONEY MARKET LISTED PROPERTY Risk Free Rate+5% CPI

-25.01 -27.15 13.09 11.79 5.78 14.19 8.52

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Fund Performance GEPF

FUND Performance Fund Benchmark Residual

GEPF Composite Equities -26.32 -25.86 -0.62

Capital Markets 12.94 12.76 0.16

Cash & Money Markets 12.35 11.79 0.50

Properties Composite 8.20 13.00 -4.25

Isibaya -18.01 14.19 -28.20

Total -8.86 -8.33 -0.58

12 Months Performance as at 31 March 2009 (%)

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Fund Performance GEPF Attribution

EQUITIES

The under performance is a reflection of the global financial crisis and overweight position in the strategic portfolio.

Internally Managed tracker funds have outperformed the benchmark.

The new Externally managed equity composite has outperformed the benchmark.

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Fund Performance GEPF Attribution

FIXED INCOME

This portfolio has outperformed across all the sub classes.

ISIBAYA

The large concentration in Information and Communication Technologies (ICT) has hurt performance in the short term.

General decline in equity values.

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Fund Performance GEPF Attribution

PROPERTY

Underperformance can be attributed to:

The conservative capitalization rate used in comparison with IPD.

Concentration in high-grade properties which does not match the IPD property mix.

The overweight position in the largest and most liquid listed stocks; Growthpoint and SA Corporate.

Performance of ACSA due to capital expansion and regulatory uncertainty.

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Fund Performance UIF, CC AND CP

12 Months Ending 31 March 2009

SUMMARYFund% Benchmark%

Excess Returns%

UNEMPLOYMENT INSURANCE FUND (UIF) 11.63 10.30 1.33

COMPENSATION COMMISSIONER: (CC) 12.05 10.98 1.07COMPENSATION COMMISSIONER:PENSION FUND (CC:PF) 10.71 10.09 0.60

THANK YOU